KOPRAN PHARMACEUTICALS LIMITED Vs. DY COMMISSIONER OF INCOME TAX
INCOME TAX APPELLATE TRIBUNAL
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O.K. Narayanan, Accountant Member -
(1.) THIS is an appeal filed by the Assessee. The relevant assessment year is 2001-2002. The appeal is directed against the order of the CIT(A) Central - IV at Mumbai, dated 10.1.2005. The appeal arises out of the assessment completed Under Section 143(3) of the Income-tax Act, 1961.
(2.) The assessee had filed a return of income for the impugned assessment year declaring a total income of Rs. 26,43,060, after adjusting the brought forward losses under the normal provisions of the Income-tax Act. So also, the assessee also returned an income of Rs. 1,41,55,773 Under Section 115JB of the Act. Initially, the return was processed Under Section 143(1). Thereafter, the assessment was completed Under Section 143(3).
The assessee had sold during the relevant previous year, a factory gala at Saki Naka, for a consideration of Rs. 32,00,000. The cost price of the gala as Rs. 4,44,930 as reflected in the Balance Sheet of the Company. As per the generally accepted accounting practice followed by the assessee-company, the excess of net sale consideration over the original cost price of the property was transferred to the capital reserve account. Further, the difference between the original cost and the written down value was treated as profit on sale of factory gala and credited in the Profit & Loss account as other income. In the above computation, the excess amount transferred by the assessee-company to its capital reserve account was Rs. 27,01,670.
(3.) THE Assessing Officer held that the above amount of Rs. 27,01,670 should form part of the book profit of the assessee-company, and accordingly, added back the same for the purpose of assessment Under Section 115JB. In first appeal, this adjustment has been upheld by the CIT(A). THErefore, the second appeal before us.;
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