23 August 2010
BUT AS FAR AS I REMEMBER THERE WAS A CASE LAW IN OF LAST 2 YEARS WHERE IN THE INTEREST WAS NOT CHARGED. CAN U GET THE CASE-LAW FOR THE SAME IF POSSIBLE
23 August 2010
Yes the case law was of kwality biscuits as mentioned below: In case of section 115J cases - Interest is not leviable under sections 234B and 234C in the case of assessment of a company on the basis of book profits under section 115J - CIT v. Kwality Biscuits Ltd. [2006] 155 Taxman 658 (SC).
Also there was a case of Bombay High Court in Snowcem India Ltd. where the matter of discussion was Section 115JA.
But the same was for Section 115J and 115JB and currently book profits is calculated u/s 115JB.
CBDT Circular No. 13/2001 was issued on 9-11-2001 clarifying that all companies are liable for payment of advance tax under the new MAT provisions of S. 115JB of the Act. It is abundantly made clear in the said Circular that the new provisions of S. 115JB as introduced by the Finance Act, 2000 are a self-contained Code. Ss.(1) lays down the manner in which income-tax payable is to be computed. Ss.(2) provides for computation of ‘book profit’. Ss.(5) specifies that save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company mentioned in that section. The Circular clarifies that except for substitution of tax payable and the manner of computation of book profits, all the provisions relating to charge, definitions, recoveries, payment, assessment, etc., would apply in respect of the provisions of this Section.
The Circular further goes on to explain the scheme of the Income-tax Act. S. 4 of the Act charges to tax the income at any rate or rates which may be prescribed by the Finance Act every year. S. 207 deals with liability for payment of advance tax and S. 209 deals with its computation based on the rates in force for the financial year, as are contained in the Finance Act. The first proviso to S. 2(8) of the Finance Act, 2001 provides that tax would be payable by way of advance tax in respect of income chargeable u/s.115JB as introduced by Finance Act, 2000. The Circular clarifies that consequently the provisions of S. 234B and S. 234C for interest on default in payment of advance tax and deferment of advance tax would also be applicable.
This was the view taken by the Karnataka High Court in the case of Jindal Thermal Power Co. Ltd. 286 ITR 182 in the context of S. 115JB. This view has also been taken by the Mumbai Tribunal in Madaus Pharmaceuticals P. Ltd. 24 SOT 180 following Karnataka High Court in Jindal Thermal Power Co. Ltd.
23 August 2010
Interest u/s. 234B is chargeable though computation of income is made under s. 115JB, a difficulty or impossibility as pleaded by the assessee cannot be accepted only because it is a liability under the provisions of s. 115JB. Brindavan Beverages Ltd. (2010) 228 CTR 1 (Kar).
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