- (1.) IN this matter an interesting question has arisen for which this appeal has been admitted on the ground as follows : "Whether on a true and proper interpretation of the relevant provisions of the , the provisions relating to payment of advance tax are applicable in case where the total income is deemed to be 30 per cent of the book profit under s. 115JA and the Tribunal was justified in law in upholding the charging of interest under ss. 234B and 234C in the appellant's case for the asst. yrs. 1999 -2000 and 2000 -01 -
(2.) IN this case we are concerned with s. 115JA. It provides, amongst others, for computation of fictional income for the purpose of levying taxes. We are, therefore, appropriately quoting s. 115JA which is part of Chapter XII -B. "115JA. (1) Notwithstanding anything contained in any other provisions of this Act, where in the case of an assessee, being a company, the total income, as computed under this Act in respect of any previous year relevant to the this section referred to as the relevant previous year) is less than thirty per cent of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent of such book profit. (2) Every assessee, being a company, shall, for the purposes of this section prepare its P&L a/c for the relevant previous year in accordance with the provisions of Parts II and III of Sch. VI to the Companies Act, 1956 (1 to 1956) : Provided that while preparing P&L a/c, the depreciation shall be calculated on the same method and rates which have been adopted for calculating the depreciation for the purpose of preparing the P&L a/c laid before the company at its annual general meeting in accordance with the provisions of s. 210 of the Companies Act, 1956 (1 of 1956) : Provided further that where a company has adopted or adopts the financial year under the Companies Act, 1956 (1 of 1956), which is different from the previous year under the Act, the method and rates for calculation of depreciation shall correspond to the method and rates which have been adopted for calculating the depreciation for such financial year or part of such financial year falling within the relevant previous year. (3) Nothing contained in sub -s. (1) shall affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions of sub -s. (2) of s. 32 or sub -s. (3) of s. 32A or cl. (ii) of sub -s. (1) of s. 72 or s. 73 or s. 74 or sub -s. (3) of s. 74A. (4) Save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company, mentioned in this section."
(3.) IT was the contention of the assessee that the payment of advance tax is not attractable in cases of the fictional income as mentioned above. Therefore, logically payment of interest under s. 234B and also interest on deferment of payment of interest under s. 234C do not apply. This contention of the appellant did not find favour of the AO who held that the aforesaid fictional income is attracted for payment of advance tax as provided under ss. 207 and 208 of the IT Act, 1961. Secondly, interest amount on both the counts is to be paid. So, the said amount of interest was levied. On appeal being taken, the CIT allowed the appeal and deleted the aforesaid levy of interest as imposed by the AO. On appeal being preferred by the Department, the learned Tribunal by the impugned judgment and order has restored the order of the AO and set aside the order of the CIT(A).;