Case Law Details
Case Name : Rain Commodities Vs. DCIT (ITAT Hyderabad)
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All ITAT ITAT Hyderabad
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Rain Commodities Vs. DCIT (ITAT Hyderabad Special Bench)
The assessee credited its P&L A/c with an amount of Rs. 149.77 crores being the profit on sale of assets to its wholly owned subsidiary. As the said profits were not chargeable to tax u/s 47(iv), the assessee took the view that the same had also to be reduced from the “book profits” u/s 115JB. The Special Bench had to consider whether exempt income could be excluded from the computation of “book profits” u/s 115JB. HELD deciding against the assessee:
(i) The AO can alter the “book profit” only in two circumstances (a) if...
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Income like Agricultural Income, Dividend income which are exempt from Income Tax, then how the MAT applicable on such Income.
Law is made on the basis of some concepts.
The introduction of section 115JB was made when it was seen that despite earning “regular profits” by the companies; no income-tax is paid by them.
The introduction of section 47(iv) is there because government seeks to make the industrial units cost competitive and that is why profits earned on amalgamation and mergers were not made taxable as these are not regarded as transfer.
The other provisions of section 47 are on the same line.
There being no transfer; how one will compute capital gains under Income-Tax Act ?
Whether one would be required to pay MAT if there is agricultural income and/or Dividend income shown in the Profit and Loss Account ?
Can legislature impose taxes in this way on Agricultural Income just because this income has to be shown in Profit and Loss Account ? Whether the same is applicable if dividend in included in Profit and Loss Account ?
Can one again levy tax the Dividend even though dividend distribution tax has already been paid ?
In my opinion; this was not the intention of the legilation to tax those income which were never to be taxed.
The matter is under litigation just because Section 115JB (1) starts with : Notwithstanding anything contained in any other provision of this Act,……..
But one should go into the history why this section was introduced.