Canara Bank Vs DCIT (ITAT Bangalore)
ITAT Bangalore held that section 115JB(2)(b) of the Income Tax Act are not applicable to the banks constituted as ‘corresponding new bank’ in terms of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and therefore provisions of section 115JB cannot be applied to such banks.
Facts- The case of the assessee was selected for scrutiny and accordingly the assessment order u/s. 143(3) was passed on 09.02.2015 by AO by making various additions / disallowances and assessed the total income at Rs.3217,90,18,430/-, and computed the Book Profit of Rs. 3797,21,59,420/- under the provisions of section 115JB of the Act.
CIT(A) partly allowed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Section 2(17) of the income Tax Act r.w.s. 2(26) which defines „company‟ to mean a company formed and registered under the Companies Act, 1956, does not meet the requirement of being a company in the case of assessee bank, because the Indian company has to be formed and registered under the Companies Act. Notwithstanding that Section 11 of the Acquisition Act deems assessee bank to be a company for the purpose of Income Tax Act, but that does not lead to an inference that merely regarded as a company for the purpose of the Income Tax Act it is also Company registered under the Companies Act. The fiction created by Section 11 of the Acquisition Act, does not imply that the assessee bank would also become a company for the purpose of the Companies Act for which Clause (b) of Sub-Section 2 of Section 115JB is applicable.
