G. Santhanam. Accountant Member - (1.) THIS is an appeal by the assessee. The dispute is about the computation of 'net profit' for purpose of Section 115J of the Income-tax Act, 1961.
(2.) The previous year of the assessee, a manufacturer of tyres and tubes, ended on 31st October, 1987 relevant to the assessment year 1988-89. The profit and loss account of the assessee is as follows :- JUDGEMENT_8448_TLIT0_19920.htm Schedule 12 contains Notes on accounts and against Serial Number 7, the following observations are found :- Depreciation for the year has been provided in the accounts in accordance with the provisions of Section 205(2)(b) of the Companies Act, 1956 taking into consideration extra shift allowances, where applicable. Consequent on the above, a sum of Rs. 1,366.39 Lacs being additional depreciation for the earlier years has been debited to the Profit & Loss Account. Had the company followed the practice as in the previous year the Profit for the year would have been higher by Rs. 120.44 Lacs.
(3.) THE appellant computed the book profits for purpose of 80J, as follows :- JUDGEMENT_8448_TLIT0_19921.htm ;