Assessee liable to pay interest under s 234B and 234C on the tax payable on book profits computed under s 115J, notwithstanding the fact that it was a deemed profit

Bee Pee Jay Finance Ltd. Vs CIT and Anr (Calcutta High Court)- By virtue of Section 11 5JA a legal fiction has been created by which if total income is found to be less than 30% of the book profit, the total income should be deemed to be 30% of the profit and in such a case, if charge ability of interest under Sections 234B and 234C are held applicable only in view of sub-Section (4) of Section 11 5JA, it would amount to adding another legal fiction to an existing legal fiction of Section 11 5JA( 1). According to Mr. Sen in case of a legal fiction, which has to be interpreted for giving its full logical coverage, another legal fiction cannot be added to the same and for the aforesaid proposition.

Bee Pee Jay Finance Ltd.
Vs
Commissioner of Income Tax, Central- II & Anr.

I.T.A. No. 289 of 2003

Calcutta High Court

Date of Judgement on: August 12, 2011.

Bhaskar Bhattacharya, J.:

This appeal under Section 260A of the Income-tax (“Act”), 1961 is at the instance of an assessee and is directed against an order dated 16^th July, 2003, passed by the Income-tax Appellate Tribunal, “A” Bench, Kolkata, in ITA No. 2567/Kol of 2002 for the Assessment Year 1999-2000.