High Court Of Gujarat
DCIT vs. Madhusudan Industries Ltd.
Section 115J, 234B
Asst. Year 1989-90
K.A. Puj & R.H. Shukla, JJ.
Tax Appeal No. 145 of 2001
18th July, 2008
Counsel appeared :
Mrs. Mauna M. Bhatt, for the Appellant : R.K. Patel, for the Respondent
JUDGMENT
K.A. Puj, J. :
The Revenue has filed this tax appeal under s. 260A of the IT Act, 1961 for asst. yr. 1989-90. The appeal was admitted by this Court on 18th June, 2001 and following substantial question of law was formulated by the Court :
“Whether the Tribunal is right in law and on facts in holding that interest under s. 234B is not chargeable when income is computed under s. 115J of the Act ?”
Heard Mrs. Mauna M. Bhatt, learned standing counsel appearing for the Revenue and Mr. R.K. Patel, learned advocate appearing for the assessee. Though the Court has directed this tax appeal to be heard along with Tax Appeal No. 390 of 1999, since there are several other issues involved in the said tax appeal, we are taking up this tax appeal for final hearing separately. While allowing this issue in favour of the assessee, the Tribunal has followed the decision of the Karnataka High Court in the case of Kwality Biscuits Ltd. vs. CIT (2000) 159 CTR (Kar) 316 : (2000) 243 ITR 519 (Kar). An appeal filed against this judgment by the Revenue before the apex Court has been dismissed and the said decision is reported in CIT vs. Kwality Biscuits Ltd. (2006) 205 CTR (SC) 122 : (2006) 284 ITR 434 (SC). It is reported therein that from the decision of the Karnataka High Court to the effect, inter alia, that interest is not leviable under ss. 234B and 234C of the IT Act, 1961, in the case of an assessment of a company on the basis of book profits under s. 115J, since the entire exercise of computing income under s. 115J can only be done at the end of the financial year, and the provisions of ss. 207, 208, 209 and 210 cannot be made applicable until and unless the accounts are audited and the balance sheet prepared. The Department preferred appeals to the Hon’ble Supreme Court and the Hon’ble Supreme Court dismissed the appeals.
Since the Tribunal has followed the judgment of the Karnataka High Court and the said decision has beenapproved by the Hon’ble Supreme Court, we decide this question in favour of the assessee and against the Revenue. We are of the view that the Tribunal has correctly decided the issue and held that interest under s. 234B is not chargeable when income is computed under s. 115J of the Act.
This appeal is accordingly dismissed. After the above order is dictated, Sheristedar has pointed out that in this matter, appearance of one of us (Coram : K. A. Puj, J.) was filed way back on 21st July, 2001. Thereafter, appearance of Mr. R.K. Patel is filed. This Bench was not inclined to take up the matter. However, the learned advocate appearing for the assessee as well as learned standing counsel appearing for the Revenue submit that since this Bench is not deciding any fresh issue and only the judgment of the Hon’ble Supreme Court is followed in the matter, there would not be objection for taking up this matter by this Bench. Accordingly, this Bench has thought it fit not to change the decision taken by the Court.
[Citation : 322 ITR 438]
