Law:

Section:

Section 115J of the Income-tax Act, 1961 - Zero-tax companies - Assessment year 1990-91 - Whether for purposes of section 115J, what assessee prepares is a profit and loss account and not a balance sheet showing transactions of relevant previous year and such amount be in conformity with Parts II and III of Schedule VI to Companies Act - Held, yes - Whether net profit, if any, arrived at after making such computation is to be increased by amounts set out in sub-clauses (a) to (ha) under Explanation to section 115J(1A) and reduced by amounts mentioned in clauses (i) to (iv) in that section - Held, yes - Whether assessee, while computing book profit under section 115J, was not entitled to deduct disputed amount of customs duty payable and funded interest payable to Bank, which related to earlier years, as no payment was made and assessee did not accept liability and that liability also had not become final by reason of litigation that was pending - Held, yes K. Subramanian for the Applicant. P.P.S. Janarthana Raja for the Respondent. JUDGMENT R. Jayasimha Babu, J. - The question referred to us for consideration is: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the disputed customs duty payable and funded interest payable to the bank, which liabilities pertain to the earlier years, can be allowed as a deduction in computing the profit under section 115J of the Act ?" The assessment year is 1990-91. 2. In the profit and loss account prepared by the assessee for this assessment year, under the heading "Notes" were mentioned, inter alia,two items which are relevant here. Note 5 reads thus : "Bank guarantee to the extent of Rs. 17.24 lakhs have been given to the Customs Department towards differential duty on import of staple fibre under dispute pending before the Supreme Court and not provided for in the accounts." Item 12 under the notes reads thus : "Funded interest term loan amounting to Rs. 43.57 lakhs being overdue, interest on L/C arrears in respect of earlier years has been granted by the Bank of India for repayment as per agreed schedule. The balance outstanding as above amounting to Rs. 43.57…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492