INCOME TAX ACT, 1961

--MAT--Book profit under section 115JAdditional depreciation claimed because of change in the method of depreciation--Assessee changed the method of providing depreciation from Straight Line Method (SLM) to Written Down Value (WDV) Method which had resulted in a shortfall in the depreciation provided as per the old method as compared to the new method and the shortfall was charged to the Profit and Loss Account for the current assessment year 1989-90. AO disallowed the claim of assessee on the ground that section 205 of the Companies Act, 1956 read with section 35D of the said Act did not entitle the assessee to claim depreciation for the earlier years. Commissioner (Appeals) and Tribunal deleted the addition on the ground that the change in method adopted by assessee was one which was permitted by the Accounting Standards prescribed and was not barred by the provisions of the Companies Act or by the provisions of section 115J of IT Act. Held: Tribunal was right in law in upholding the deletion of addition of Rs. 20,77,946 made by AO to the book profit on account of additional depreciation debited in the books for the earlier years because of change in the method of providing depreciation retrospectively. [Para 9]

Income Tax Act, 1961, Section 115J

INCOME TAX ACT, 1961

--Interest under sections 234B and 234C--Chargeability Assessment completed under section 115J--AO charged interest under sections 234B and 234C. Commissioner (Appeals) and Tribunal directed AO, not to charge interest under sections 234B and 234C since the total income was determined under section 115J. Held: Was justified.

Income Tax Act, 1961, Section 234B

Income Tax Act, 1961, Section 234C

IN THE GUJARAT HIGH COURT

AHMEDABAD HARSHA DEVANI & BELA TRIVEDI, JJ

Dy. CIT v. Farmson Pharmaceuticals Guj Ltd

Tax Appeal No.390 of 1999

7 April 2011

Appellant Rep by : K.M. Parikh

Respondent Rep by : J.P. Shah

Harsha Devani