ROCKLINE DEVELOPERS PVT. LTD., MUMBAI V. ITO 13(3)(2), MUMBAI

ITA 5125/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5822 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 11-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Keywords: Depreciation; Search and seizure; Deemed to accrue or arise in india; Capital receipt
• Section: 80C; 72(1); 80HHC; 234B; 115JB; 80IB; 263; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 5125/MUM/2016 (ASSESSMENT YEAR: 2012-13) M/S. ROCKLINE DEVELOPERS P. LTD. 801, HUBTOWN SOLARIS N.S. PHADKE MARG, OFF. TELI GALI ANDHERI (E), MUMBAI 400069 VS. INCOME TAX OFFICER - 13(3)(2) MUMBAI PAN AAACR4467F APPELLANT RESPONDENT APPELLANT BY: SHRI VIMAL PUNAMIYA RESPONDENT BY: MS. S. PADMAJA DATE OF HEARING: 13.06.2018 DATE OF PRONOUNCEMENT: 06.07.2018 O R D E R PER B.R. BASKARAN, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 20.06.2016 PASSED BY THE LEARNED CIT(A)-21, MUMBAI AND IT RELATES TO A.Y. 2012-13. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION RENDERED BY THE LEARNED CIT(A) IN HOLDING THAT THE DEDUCTION U/S 80IB(10) O F THE ACT IS NOT ALLOWABLE WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE INCOME TAX ACT (HEREINAFTER THE ACT) AND ALSO IN HOLDING THAT THE INTEREST UNDER SECTIONS 234B AND 234C OF THE ACT IS CHARGEABLE ON THE BOOK PROFIT. 3. FACTS RELATING TO THE ISSUE ARE STATED IN BRIEF. T HE ASSESSEE IS ENGAGED IN CONSTRUCTION AND SALE OF BUILDINGS. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT TO THE TUNE ` 2057.30 LAKHS WHILE COMPUTING TOTAL INCOME UNDER THE NORMAL PROVI SIONS OF THE ACT. THE SAME WAS ALLOWED BY THE AO AND ACCORDINGLY THE TOTA L INCOME WAS COMPUTED AT ` 4,96,803/-. HOWEVER, THE AO COMPUTED THE BOOK PROFI T ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 2 UNDER SECTION 115JB OF THE ACT AT ` 2062.19 LAKHS. SINCE THE BOOK PROFIT WAS MORE THAN THE TOTAL INCOME COMPUTED UNDER NORMA L PROVISIONS OF THE ACT, THE AO TREATED THE BOOK PROFIT AS TOTAL INCOME IN TERMS OF SEC 115JB OF THE ACT. WHILE COMPUTING BOOK PROFIT, THE ASSESSEE DID NOT ALLOW DEDUCTION U/S 80IB(10) OF THE ACT. 4. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT THE AO SHOULD HAVE ALLOWED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. THE LEARNED CIT(A) NOTICED THAT IDENTICAL ISSUE WAS CONSIDERED BY THE HON'BLE KARNA TAKA HIGH COURT IN THE CASE OF SANKHLA POLYMERS P. LTD. VS. ITO 257 CTR 18 5 WHEREIN IT WAS HELD THAT DEDUCTION AVAILABLE UNDER SECTION 80IB OF THE ACT WHILE COMPUTING THE TOTAL INCOME UNDER THE NORMAL PROVISIONS OF THE ACT CANNOT BE ALLOWED TO BE DEDUCTED WHILE COMPUTING BOOK PROFIT UNDER SECTI ON 115JB OF THE ACT. THE LEARNED CIT(A) ALSO NOTICED THAT IDENTICAL VIEW HAS BEEN EXPRESSED BY THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF GANESH HOUSING CORPORATION LTD. VS. ACIT (2009) 32 SOT 207. ACCORD INGLY THE LEARNED CIT(A) REJECTED THE CLAIM OF THE ASSESSEE. 5. THE ASSESSEE ALSO CONTENDED BEFORE LD CIT(A) THAT T HE INTEREST UNDER SECTIONS 234B AND 234C OF THE ACT SHOULD NOT BE LEV IED ON THE INCOME TAX CHARGED ON BOOK PROFIT. THE LEARNED CIT(A) REJECTED THE SAME BY FOLLOWING THE DECISION RENDERED BY THE HON'BLE BOMBAY HIGH CO URT IN THE CASE OF CIT VS. KOTAK MAHINDRA FINANCE LTD. (2003) 183 CTR 491. THE ASSESSEE IS AGGRIEVED BY THE DECISION RENDERED BY THE LEARNED C IT(A) ON BOTH THE ISSUES, REFERRED ABOVE. 6. THE FIRST ISSUE RELATES TO THE CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT, WHILE COMPUTING BOOK PROFIT U/S 115JB OF THE A CT. THE LEARNED A.R. SUBMITTED THAT PROVISIONS OF SECTION 115JB(5) OF TH E ACT, WHICH READS AS UNDER:- SAVE AS OTHERWISE PROVIDED IN THIS SECTION, ALL OT HER PROVISIONS OF THIS ACT SHALL APPLY TO EVERY ASSESSEE, BEING A COM PANY MENTIONED IN THIS SECTION. ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 3 HE SUBMITTED THAT THE HON'BLE SUPREME COURT IN THE CASE OF ROLTA INDIA LTD. 330 ITR 470 HAS INTERPRETED SECTION 115JB(5) O F THE ACT AND HAS HELD THAT ALL OTHER PROVISIONS OF THE ACT SHALL APPLY. A CCORDINGLY THE LEARNED A.R. CONTENDED THAT PROVISIONS OF SECTION 80IB SHOULD AL SO APPLY FOR COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. 7. THE LEARNED A.R. FURTHER SUBMITTED THAT DEDUCTION P RESCRIBED UNDER SECTION 80HHC OF THE ACT HAS BEEN ALLOWED IN THE CA SE OF CIT VS. INDIAN PETROCHEMICALS CORPORATION LTD. (2016) 74 TAXMANN.C OM 163 (GUJ). HE FURTHER SUBMITTED THAT THE RECEIPTS WHICH ARE NOT I N THE NATURE OF INCOME CANNOT BE TAXED UNDER SECTION 115JB OF THE ACT AS P ER THE DECISION RENDERED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF INCOME TAX OFFICER VS. FRIGSALES (INDIA) LTD. (2005) 4 SOT 376 . HE ALSO SUBMITTED THAT THE CAPITAL RECEIPTS WHICH DO NOT CONSTITUTE INCOME OF THE ASSESSEE CANNOT BE BROUGHT TO TAX NET BY EMPLOYING THE MECHANISM OF SECTION 115JB OF THE ACT, AS HELD IN THE CASE OF ITO VS. SURAJ JEWELLERY (INDIA) LTD. (2008) 21 SOT 79 (MUM). THE LEARNED A.R. FURTHER SUBMITTED TH AT PROVISIONS OF SECTION 115JB WERE INTRODUCED TO BRING CERTAIN COMP ANIES WITHIN THE TAX NET, SINCE THEY WERE SHOWING BOOK PROFIT, BUT NOT P AYING ANY TAX BY AVAILING VARIOUS EXEMPTIONS AND DEDUCTIONS. HE SUBM ITTED THAT THE ASSESSEE HEREIN DOES NOT FALL IN THE CATEGORY OF C ERTAIN COMPANIES, REFERRED TO IN THE OBJECTIVE OF INTRODUCING SEC. 11 5JB OF THE ACT AND HENCE THE PROVISIONS OF SECTION 115JB SHOULD NOT BE APPLI ED TO THE ASSESSEE. HE FURTHER SUBMITTED THE EXEMPTION GIVEN TO THE COMPAN Y UNDER SECTION 80IB(10) OF THE ACT SHALL REPRESENT THE INCOME WHIC H IS NOT TAXABLE AND HENCE THE SAME SHOULD BE DEDUCTED WHILE COMPUTING B OOK PROFIT. IN THIS REGARD THE LEARNED A.R. TOOK SUPPORT OF THE DECISIO N RENDERED BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. D.P. S ANDHU BROTHERS 273 ITR 1 WHEREIN IT WAS HELD THAT RECEIPTS WHICH ARE N OT TAXABLE CANNOT BE BROUGHT TO TAX NET UNDER ANY OTHER SECTION. ACCORDI NGLY THE LEARNED A.R. SUBMITTED THAT THE ASSESSEE SHOULD BE ALLOWED DEDUC TION UNDER SECTION 80IB(10) OF THE ACT WHILE COMPUTING BOOK PROFIT. HE SUBMITTED THAT THE MUMBAI BENCH OF THE TRIBUNAL HAS CONSIDERED IDENTIC AL ISSUE IN THE CASE ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 4 OF NEHA HOME BUILDERS P. LTD. VS. CIT (2018) 92 TAX MANN.COM 102 AND HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION UN DER SECTION 80IB(10) OF THE ACT WHILE COMPUTING BOOK PROFIT UNDER SECTION 1 15JB OF THE ACT. 8. ON THE CONTRARY, THE LEARNED D.R. SUBMITTED THE PRO VISIONS OF SECTION 115JB OF THE ACT IS APPLICABLE TO ALL COMPA NIES MENTIONED THEREIN AND HENCE THE CONTENTIONS OF THE LEARNED A.R. THAT IT WOULD COVER ONLY CERTAIN COMPANIES IS NOT IN ACCORDANCE WITH THE M ANDATE OF THE PROVISIONS. SHE FURTHER SUBMITTED THAT PROVISIONS O F SECTION 115JB IS AN ALTERNATE TAX MECHANISM BROUGHT INTO STATUTE TO COL LECT TAX FROM COMPANIES COVERED BY THE SECTION AND THE INCOME TAX SO PAID CAN BE ADJUSTED BY THE ASSESSEE FROM THE LIABILITY TO PAY INCOME TAX IN SUBSEQUENT YEARS UNDER NORMAL PROVISIONS OF THE ACT. SHE FURTH ER SUBMITTED THAT PROVISIONS OF SECTION 115JB PRESCRIBE THE METHOD OF COMPUTATION OF BOOK PROFIT. AS PER THE METHOD SO PRESCRIBED, CERTAIN IT EMS OF EXPENDITURE DEBITED TO THE PROFIT & LOSS ACCOUNT HAS TO BE ADDE D TO THE NET PROFIT AND CERTAIN TYPES OF INCOME CREDITED TO THE PROFIT & LO SS ACCOUNT HAS TO BE REDUCED FROM THE NET PROFIT. EXCEPT THE ADJUSTMENTS SO PROVIDED, THE ASSESSEE IS NOT ENTITLED TO CLAIM ANY OTHER DEDUCTI ON. 9. THE LD D.R SUBMITTED THAT THE PROVISIONS OF SECTION 115JB(5) PROVIDES THAT ALL OTHER PROVISIONS OF SEC.115JB SHA LL APPLY TO THE COMPANIES SPECIFIED IN THAT SECTION EXCEPT FOR THE ITEMS SPECIFICALLY PROVIDED IN SEC. 115JB OF THE ACT. SHE FURTHER SUB MITTED THAT THE METHOD OF COMPUTATION OF BOOK PROFIT IS PROVIDED IN SEC. 115JB OF THE ACT ONLY AND NOT IN ANOTHER PROVISIONS. HENCE FOR DETERMINI NG THE BOOK PROFIT, ONE HAS TO LOOK INTO THE PROVISIONS OF SEC. 115JB O NLY AND NOT ELSEWHERE. 10. THE LEARNED D.R. FURTHER SUBMITTED THAT PROVISIONS OF SECTION 115JA PREVAILED BEFORE THE INTRODUCTION OF SEC. 115JB OF THE ACT. THE PROVISIONS OF SEC. 115JB SPECIFICALLY PROVIDED FOR DEDUCTION U NDER SECTION 80HHC OF THE ACT AND HENCE THE SAME WAS DISCUSSED IN THE CAS E OF INDIAN PETROCHEMICALS CORPORATION LTD. (SUPRA). THE DECISI ON IN THE CASE OF FRIGSALES (INDIA) LTD. DISCUSSED ABOUT THE RECEIPTS , WHICH ARE NOT IN THE ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 5 NATURE OF INCOME. SIMILARLY IN THE CASE OF SURAJ JE WELLERY (INDIA) LTD. (SUPRA) THE ISSUE CONSIDERED WAS ABOUT CAPITAL RECE IPTS. THE LEARNED D.R. SUBMITTED THAT THE ABOVE SAID DECISIONS DO NOT APPL Y TO THE FACTS OF THE PRESENT CASE. SINCE THE ISSUE CONTESTED BY THE ASSE SSEE RELATES TO THE CLAIM FOR DEDUCTION UNDER SECTION 80IB(10) OF THE A CT WHILE COMPUTING BOOK PROFIT. THE LEARNED D.R. SUBMITTED THAT THE PR OVISIONS OF SECTION 115JB DOES NOT PROVIDE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AND HENCE THE SAME COULD NOT BE ALLOWED. THE LEARNE D D.R. FURTHER SUBMITTED THAT AN IDENTICAL ISSUE WAS CONSIDERED EX TENSIVELY BY HON'BLE KARNATAKA HIGH COURT IN THE CASE OF SANKHLA POLYMER S P. LTD. (SUPRA) AND HE HON'BLE HIGH COURT HAS HELD THAT PROVISIONS OF S ECTION 115JB WOULD APPLY TO THE ASSESSEE WHO IS CLAIMING DEDUCTION UND ER SECTION 80IB OF THE ACT AND DEDUCTION UNDER SECTION 80IB(10) OF THE ACT CANNOT BE ALLOWED WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. THE LEARNED D.R. FURTHER SUBMITTED THAT AN IDENTICAL VIEW HAS B EEN EXPRESSED BY THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF GANE SH HOUSING CORPORATION LTD. (SUPRA). THE LEARNED D.R. FURTHER SUBMITTED THAT THE DECISION IN THE CASE OF D.P. SANDHU BROTHERS (SUPRA ) WAS RENDERED BY THE HON'BLE SUPREME COURT IN THE CONTEXT OF COMPUTATION OF CAPITAL GAINS AND HENCE THE OBSERVATIONS MADE THEREIN CANNOT BE TAKEN SUPPORT BY THE ASSESSEE WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. 11. WE HAVE HEARD THE PARTIES ON THIS ISSUE AND PERUSED THE RECORD. AS SUBMITTED BY THE LEARNED D.R., PROVISIONS OF SECTIO N 115JB PRESCRIBE THE METHODOLOGY TO COLLECT MINIMUM AMOUNT OF TAX AND HE NCE THE TAX SO COLLECTED WAS CALLED MINIMUM ALTERNATE TAX. THIS PR OVISION IS SUCCESSOR TO SEC. 115JA AND SEC. 115J, WHICH WERE BROUGHT INTO T HE STATUTE BY THE PARLIAMENT ON NOTICING THAT CERTAIN COMPANIES ARE D ECLARING HUGE BOOK PROFITS, BUT ARE NOT PAYING INCOME TAX UNDER THE NO RMAL PROVISIONS OF THE ACT BY AVAILING VARIOUS DEDUCTIONS AND EXEMPTIONS. THE MINIMUM ALTERNATIVE TAX IS LEVIED ON THE AMOUNT OF BOOK PR OFIT COMPUTED AS PER THE PROVISIONS OF SECTION 115JB OF THE ACT. THIS S ECTION PRESCRIBES A METHODOLOGY TO COMPUTE BOOK PROFIT AS PER WHICH T HE FINANCIAL ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 6 STATEMENTS HAS TO BE PREPARED IN ACCORDANCE WITH TH E PROVISIONS OF COMPANIES ACT AND THE NET PROFIT SHOULD BE ARRIVED AT. THEREAFTER CERTAIN ITEMS OF EXPENDITURE DEBITED TO PROFIT & LOSS ACCOU NT HAS TO BE ADDED TO THE NET PROFIT AND CERTAIN ITEMS OF INCOME CREDITS TO THE PROFIT & LOSS ACCOUNT HAS TO BE REDUCED, MEANING THEREBY, THE BO OK PROFIT HAS TO BE COMPUTED IN ACCORDANCE WITH THE METHODOLOGY PROVIDE D IN SECTION 115JB OF THE ACT. ADMITTEDLY, THE DEDUCTION UNDER SECTIO N 80IB(10) OF THE ACT WAS NOT LISTED AS A PERMISSIBLE DEDUCTION FROM THE NET PROFIT WHILE COMPUTING BOOK PROFIT. 12. WE HAVE NOTICED THAT THE LEARNED A.R. HAS PLACED RE LIANCE ON VARIOUS CASE LAWS. WE NOTICE THAT THOSE CASE LAWS HAVE BEEN RIGHTLY DISTINGUISHED BY THE LEARNED D.R. AND HENCE WE ARE OF THE VIEW TH AT THE ASSESSEE CANNOT TAKE SUPPORT OF THOSE CASE LAWS. THE LEARNED A.R. P LACED HEAVY RELIANCE ON PROVISIONS OF SECTION 115JB(5) OF THE ACT WHICH STA TES THAT SAVE AS OTHERWISE PROVIDED IN THE SECTION ALL OTHER PROVISI ONS OF THE ACT SHALL APPLY. THE LD A.R PLACED EMPHASIS ON THE EXPRESSIO N ALL OTHER PROVISIONS OF THE ACT SHALL APPLY AND STATED THAT THE PROVISI ONS OF SEC. 80IB(10) ALSO SHALL APPLY WHILE COMPUTING BOOK PROFIT U/S 115JB O F THE ACT. ADMITTEDLY, THE LD A.R MISSED OUT THE EXPRESSION SAVE OTHERWIS E PROVIDED IN THIS SECTION OCCURRING IN FIRST PART OF SEC. 115JB OF T HE ACT. 13. WE HAVE NOTICED THAT THE PROVISIONS OF SEC. 115J/1 15JA/115JB WERE INTRODUCED IN THE INCOME TAX ACT TO BRING CERT AIN COMPANIES POPULARLY CALLED ZERO TAX COMPANIES INTO TAX NET BY DEVISING AN ALTERNATIVE MECHANISM OF COLLECTION OF TAX. THESE COMPANIES WERE NOT PAYING TAX BY AVAILING VARIOUS EXEMPTIONS AND DEDUC TIONS. UNDER THESE PROVISIONS, BOOK PROFIT OF THE COMPANY IS COMPUTE D AS PER THE METHODOLOGY PROVIDED IN SEC.115JB OF THE ACT. THE INCOME TAX PAYABLE AS PER SEC. 115JB IS MORE THAN THE TAX PAYABLE UNDER N ORMAL PROVISIONS OF THE ACT, THEN THE BOOK PROFIT COMPUTED U/S 115JB OF THE ACT IS TAKEN AS TOTAL INCOME AND TAX SHALL BE LEVIED THEREON AS PER THE PROVISIONS OF SEC.115JB OF THE ACT. IT IS PERTINENT TO NOTE THAT THE METHODOLOGY TO COMPUTE BOOK PROFIT IS PRESCRIBED IN SEC. 115JB O F THE ACT. IN OUR VIEW, ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 7 THE PROVISIONS OF SEC.115JB(5) PROTECTS THE METHODO LOGY OF COMPUTING BOOK PROFIT PRESCRIBED IN SEC. 115JB OF THE ACT A ND HENCE THE IT BEGINS WITH THE EXPRESSION SAVE AS OTHERWISE PROVIDED IN THIS SECTION, I.E., EXCEPT FOR THE PROVISIONS SPECIFICALLY PROVIDED IN SEC. 11 5JB OF THE ACT, ALL OTHER PROVISIONS OF THE ACT SHALL APPLY. IN OUR VIEW, TH IS IS THE PROPER INTERPRETATION OF SEC. 115JB(5) OF THE ACT. WE NOT ICE THAT SEC.115JB(5) OF THE ACT WAS INTERPRETED BY THE HON'BLE SUPREME COUR T IN THE CASE OF ROLTA INDIA LTD.(SUPRA) IN THE CONTEXT OF CHARGING OF INT EREST U/S 234B OF THE ACT. ADMITTEDLY PROVISIONS OF SECTION 115JB DOES NOT PRO VIDE FOR CHARGING INTEREST CORRESPONDING TO SEC. 234B AND HENCE THE HONBLE SUPREME COURT HELD THAT THE PROVISIONS OF SEC. 234B SHALL APPLY T O THE TAX PAYABLE ON THE BOOK PROFIT COMPUTED U/S 115JB OF THE ACT, SINCE SE C. 115JB(5) STATES THAT ALL OTHER PROVISIONS THE ACT SHALL APPLY. THERE WAS NO OCCASION FOR THE HONBLE SUPREME COURT TO INTERPRET THE FIRST PORTIO N OF SEC. 115JB(5), WHICH STATES THAT SAVE AS OTHERWISE PROVIDED IN TH IS SECTION. ADMITTEDLY THE METHODOLOGY FOR COMPUTING BOOK PROFIT IS PROVID ED ONLY IN SECTION 115JB OF THE ACT AND IS SAVED BY THE PROVISIONS OF SECTION 115JB(5) OF THE ACT. 14. THERE SHOULD NOT BE ANY DISPUTE THAT THE METHODOLO GY PROVIDED IN SEC. 115JB FOR COMPUTING BOOK PROFIT DID NOT PRE SCRIBE FOR REDUCING THE AMOUNT ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE A CT FROM THE NET PROFIT. 15. WE ALSO NOTICE THAT THE ASSESSEE HAS CONSIDERED S EC. 80IB(10) OF THE ACT AS AN EXEMPTION PROVISION. IT IS WELL SETTLE D PROPOSITION THAT THE DEDUCTIONS PRESCRIBED IN CHAPTER VIA ARE DEDUCTION S PROVISION AND THEY SHALL BE ALLOWED ONLY IF THE GROSS TOTAL INCOME IS IN POSITIVE FIGURE. A DEDUCTION FOR A PARTICULAR TYPE OF INCOME IS AVAILA BLE ONLY IF IT FORMS PART OF GROSS TOTAL INCOME. THUS, THE CONCERNED INCOME IS TAKEN AS PART OF GROSS TOTAL INCOME AND THEREAFTER, DEDUCTIONS ARE ALLOWED UNDER CHAPTER VIA OF THE ACT. CERTAIN INCOMES ARE TOTALLY EXEMPT FROM T AX AND SUCH TYPE OF INCOME DOES NOT ENTER INTO THE GROSS TOTAL INCOME AT ALL. HENCE THE DEDUCTION ALLOWED U/S 80IB(10) FALLS UNDER THE CATE GORY OF DEDUCTION PROVISION AND NOT EXEMPTION PROVISION AS CONTENDED BY THE ASSESSEE. THE ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 8 PROVISIONS OF SEC. 115JB PRESCRIBES EXCLUSION OF CE RTAIN EXEMPTED INCOME AND DO NOT PROVIDE DEDUCTION GIVEN U/S 80IB(10) OF THE ACT. THE HONBLE KARNATAKA HIGH COURT HAS MADE THIS POINT VERY CLEAR IN THE CASE OF IN THE CASE OF SANKHLA POLYMERS P. LTD. (SUPRA), WHEREIN T HE HON'BLE HIGH COURT HAS HELD THAT PROVISIONS OF SECTION 115JB WOULD APP LY TO THE ASSESSEE WHO IS CLAIMING DEDUCTION UNDER SECTION 80IB OF THE ACT AND DEDUCTION UNDER SECTION 80IB(10) OF THE ACT CANNOT BE ALLOWED WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. IDENTICAL VIEW HAS BEEN EXPRESSED BY THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF GANE SH HOUSING CORPORATION LTD. (SUPRA). 16. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW TH E RELEVANT OBSERVATIONS MADE BY HONBLE KARNATAKA HIGH COURT I N THE CASE OF SANKHLA POLYMERS P LTD (SUPRA):- 26. SECTION 115JB IS IN THE NATURE OF A SPECIAL PROVISION, A CHARGIN G PROVISION, AND CREATING LIABILITY IN RESPECT OF AN ASSESSEE WHICH IS A COMPANY AND WHOSE TAXES AS DETERMINED ON THE RETURN S FILED IN THE NORMAL MANNER FALLS SHORT OF THE STIPULATED AMOUNT AND A CHARGE IS CREATED FOR MAKING THE DIFFERENCE I.E. THE OBJECT O F THE LEGISLATION IS TO ENSURE A MINIMUM TAX OF 7% ON THE BOOK PROFIT AS A SCERTAINED UNDER SECTION 115JB IS LEVIED AND COLLECTED FROM THE COMPANIES WHOSE PAYMENT OF TAX ALWAYS WITHOUT THE APPLICATION OF THIS PROVISION FALLS SHORT OF THIS AMOUNT OF TAX. 27. THOUGH SRI SHANKAR, LEARNED COUNSEL FOR THE APP ELLANT HAS CALLED IN AID NOT ONLY THE BUDGET SPEECH BUT ALSO THE CIRC ULAR ISSUED BY THE BOARD AND THE PRINCIPLES OF PROMISSORY ESTOPPEL AND LEGITIMATE EXPECTATION ETC., WE ARE AFRAID NONE OF THESE PRINC IPLES ARE ATTRACTED FOR THE SIMPLE REASON THAT A BUDGET SPEECH BEING ON LY AN INTRODUCTORY TO THE BILL IN THE PARLIAMENT AND THAT IN ITSELF IS NOT AN END. 28. THOUGH MANY DECISIONS ARE ROPED IN FOR INTERPRE TING THIS, WE FIND THERE IS NO SCOPE FOR INTERPRETATION IN THE PRESENT SITUATION, AS THE PROVISION OF THE STATUTE SHOULD BE GIVEN EFFECT TO, AS IT OCCURS AND IF THERE IS ONLY ANY AMBIGUITY IN UNDERSTANDING THE ST ATUTE THEN ONLY THE TOOL OF INTERPRETATION SHOULD BE CALLED IN AID. WE DO NOT FIND ANY COMPETING OR DEROGATORY PROVISION IN SECTION 115JB VIS-- VIS SECTION 80-IB OF THE ACT IS CONCERNED. 29. SECTION 80-IB OPERATES IN A PARTICULAR SPHERE AND SECTION 115JB IS OPERATIVE IN A TOTALLY DIFFERENT SPHERE. IT IS NOT THE CASE OF THE APPELLANT-ASSESSEE THAT SECTION 80- IB IS NOT O PERATED OR GIVEN EFFECT TO. GRIEVANCE OF THE ASSESSEE IS THAT BECAUS E OF THE OPERATION OF SECTION 115JB , THE BENEFIT OF SECTION 80-IB IS TAKEN AWAY. SECTION ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 9 115JB OCCURRING IN A TAXING STATUTE IS IN THE NATURE OF A CHARGING SECTION AND THAT TOO A SPECIAL CHARGING SECTION, EX EMPTION OR CONCESSION OR ANY OTHER BENEFIT SOUGHT SHOULD COME FROM WITHIN THE PROVISIONS OF SECTION 115JB ITSELF, WHICH OCCURS IN CHAPTER XII-B OF THE ACT. SECTION 80-IB IS A PROVISION WHICH OCCURS IN CHAPTER VI-A OF THE ACT AND A CHAPTER WHICH CONTAINS CERTAIN INCENT IVES AND CONCESSIONS GIVEN TO AN ASSESSEE ON FULFILLING THE REQUIREMENT SPECIFIED IN EACH SECTION MENTIONED THEREIN. 30. SECTION 80-IB IN THE FIRST INSTANCE IS NOT AN EXEMPTION PROVISION AND IT IS ONLY A PROVISION PROVIDING CERT AIN CONCESSIONS OR BENEFIT TO AN ASSESSEE AND IT DOES FACTOR WHILE COMPUTING THE TOTAL TAXABLE INCOME OF THE ASSESSEE, AS CHARGED UNDER SECTION 4 OF THE ACT. 31. WHILE THIS IS NOT IN ANY WAY DENIED TO AN ASSES SEE, SECTION 115JB IS A SPECIAL CHARGING SECTION FOR REGULATING TAX L IABILITY OF COMPANIES IN GENERAL AND MADE APPLICABLE IN PARTICU LAR AND IS CONFINED TO THE ASSESSEE COMPANIES WHOSE TAX LIABIL ITY, WHEN COMPUTED IN THE NORMAL MANNER FALLS SHORT OF THE LI ABILITY AS COMPUTED UNDER THIS PROVISION. THEREFORE, WE ARE OF THE VIEW THAT THERE IS ABSOLUTELY NO QUESTION OF SECTION 80-IB HAVING ANY BEARING OR EFFECT OR CONTROL OVER THE PROVISIONS OF SECTION 11 5JB OF THE ACT. IT IS TO BE NOTICED THAT SECTION 80-IB CONCESSION IS IN RESPECT OF THOSE ASSESSEES WHO QUALIFY FOR THAT AND SECTION 11 5JB LEVY IS CONFINED TO COMPANIES AND SUCH COMPANIES WHICH ARE ROPED IN WITHIN THE SCOPE OF THIS SECTION. IT IS BECAUSE OF THIS PO SITION, WE ARE OF THE VIEW THAT THERE IS NO OCCASION FOR THE INTERPRETATI ON OR EXAMINATION OF THE PRINCIPLES OF PROMISSORY ESTOPPEL OR DOCTRINE O F LEGITIMATE EXPECTATION. THE BENEFIT UNDER SECTION 80-IB IS NOT DENIED, IT WORKS AS IT IS. IT IS ONLY BECAUSE THE ASSESSEE HAPPENS TO B E A COMPANY TO WHICH THE PROVISIONS OF SECTION 115JB IS ALSO ATTRACTED, LEVY AS INDICATED THEREIN BECOMES OPERATIVE. THEREFORE, WE DO NOT FIND THE APPLICABILITY OF THE DECISIONS RELIED UPON BY THE L EARNED COUNSEL FOR THE APPELLANT-ASSESSEE ON THIS ASPECT OF THE MATTER , IN THE PRESENT SITUATION. 32. IN SO FAR AS THE RELIANCE PLACED ON THE JUDGMEN T OF THIS COURT IN THE CASE OF M/S UNITED BREWERIES LTD [SUPRA] IS CONCERN ED, WHILE THAT WAS WITH REFERENCE TO THE PROVISIONS OF SECTION 115 JA AND WE ARE NOW EXAMINING THE LIABILITY UNDER SECTION 115JB OF THE ACT. THE SCHEME OF CHARGING UNDER SECTION 115JB BEING TOTALLY DIFFERENT AND NOT WITH REFERENCE TO GENERAL RATE, BUT WITH REFERE NCE TO A SPECIFIED RATE AS INDICATED IN SECTION 115JB ITSELF I.E. 7% OF DEEMED INCOME FOR THE PURPOSE OF SECTION 115JB , WE ARE AFRAID THE JUDGMENT WILL NOT ADVANCE THE CASE OF THE ASSESSEE IN THE PRESENT SIT UATION. 33. A BUDGETARY SPEECH WHILE WILL HAVE SOME SIGNIFI CANCE FOR UNDERSTANDING A PROVISION IF THERE IS ANY AMBIGUITY , IN THE WAKE OF CLEAR LANGUAGE OF THE SECTION 115JB , IN THE FIRST INSTANCE THERE IS NO AMBIGUITY, IN THE SECOND INSTANCE, THE AMBIGUITY SO UGHT TO BE ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 10 INTRODUCED ON CERTAIN PREMISE WHICH IS NOT APPARENT AND IS ONLY ON A LIMITED READING OF THE BUDGET SPEECH, AT ANY RATE A BUDGET SPEECH IN ITSELF CANNOT REGULATE OR CONTROL THE STATUTORY PRO VISION, MORE SO A CHARGING SECTION IN A REVENUE YIELDING STATUTE, WE ARE OF THE CLEAR OPINION THAT THE PROVISIONS OF SECTION 115JB SHOULD BE GIVEN FULL EFFECT TO WITHOUT BEING INFLUENCED OR GUIDED OR REGULATED BY THE BUDGET SPEECH OF THE FINANCE MINISTER. THE BOARD CIRCULAR BEING IN THE CONTEXT OF THE EARLIER PROVISIONS, BUT, NEVERTHELESS MORE B Y WAY OF EXTRACTION OF THE BUDGET SPEECH, THAT BY ITSELF CANNOT HAVE AN Y SPECIAL SIGNIFICANCE, AS THE BOARD CIRCULAR DOES NOT IN ANY WAY SEEKS TO CLARIFY THE LEVY AND RATE OF LEVY AS PROVIDED IN SE CTION 115JB OF THE ACT. LEVY AND RATE OF TAX ALONE IS WHAT MATTERS FOR THE PURPOSE OF SECTION 115JB OF THE ACT. 34. ARGUMENTS ARE ADVANCED BY SRI SHANKAR, LEARNED COUNSEL FOR APPELLANT-ASSESSEE BASED ON PRINCIPLE OF INTERPRETA TION THAT SECTION 115JB SHOULD BE SO INTERPRETED OR UNDERSTOOD AS TO ENSUR E THAT THE BENEFIT GIVEN TO THE APPELLANT-ASSESSEE UNDER SECTI ON 80-IB OF THE ACT IS NOT TAKEN AWAY AND THE INTERPRETATION SUGGESTED BY SRI SHANKAR FAILS FOR MORE THAN ONE REASON EVEN ON APPLYING THE PRINCIPLE OF INTERPRETATION. THOUGH THERE IS NO NEED FOR INTERPR ETING THE PROVISION AND EXAMINATION CAN ONLY BE IN THE CONTEXT OF UNDER STANDING THE SCOPE OF SECTION 115JB OF THE ACT, NEVERTHELESS, IF IT IS SOUGHT TO BE INTERPRETED AS CONTENDED BY SRI SHANKAR IN THE BACK DROP OF SECTION 80- IB OF THE ACT, THE PRINCIPLE OF HARMONIOUS CONS TRUCTION OF A STATUTE WILL HAVE TO BE KEPT IN MIND. IT IS A WELL SETTLED PRINCIPLE THAT NO PROVISION OF AN ENACTMENT SHOULD BE SO INTERPRETED OR UNDERSTOOD AS TO RENDER OTIOSE OR INEFFECTIVE ANY OTHER PROVISION OF THE SAME ENACTMENT. THEREFORE, SECTION 80-IB CANNOT BE INTERPRETED SO AS TO RENDER THE PROVISION OF SECTION 115JB OF THE ACT NUGATORY OR OTIOSE OR INEFFECTIVE OR DOES NOT ACHIEVE THE PURPOSE FOR WHI CH IT IS ENACTED. 35. SECTION 115JB , IN FACT, IN NO WAY EITHER DENIES THE BENEFIT GIVE N UNDER SECTION 80-IB OR REDUCES THE SAME. WHILE THE APPELLANT- ASSESSEE CAN CLAIM THE BENEFIT UNDER SECTION 80-IB OF THE ACT AND IT IS NOT DENIED PER SE TO THE APPELLANT-ASSESSEE, IN THE GIVEN CASE, THE PROVISIONS OF SECTION 115JB MAY BE ATTRACTED OR MAY NOT BE ATTRACTED DEPENDING UPON THE NATURE OR LEGAL COMPOSITION OF T HE ASSESSEE. 36. IN FACT, THE MINIMUM ALTERNATE TAX IS SOUGHT TO BE LEVIED EARLIER UNDER SECTION 115JA AND NOW UNDER SECTION 115JB OF THE ACT, ONLY IN RESPECT OF SUCH COMPANIES WHICH, B Y AVAILING VARIOUS CONCESSIONS GIVEN IN CHAPTER VI-A OF THE AC T, ARE ABLE TO SHOW EITHER A NIL TAXABLE INCOME OR MUCH REDUCED TAXABLE INCOME. CONCESSION GIVEN UNDER SECTION 80-IB IS ALSO ONE SUCH AND THEREFORE NO EXCEPTION CAN BE TAKEN. ONLY IN RESPECT OF THE AVAILABILITY OF A CONCESSION UNDER SECTION 80-IB AND TO MAKE IT IMMUNE FROM THE APPLICABILITY OF THE PROVISIONS OF SECTION 115JB OF THE ACT. BOTH PROVISIONS OPERATE IN THEIR OWN RESPE CTIVE SPHERES AND HAVE TO BE GIVEN EFFECT. ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 11 37. SECONDLY AND MORE IMPORTANTLY, NO PROVISION OF A STATUTE CAN BE SO INTERPRETED AS TO RENDER IT UNCONSTITUTIONAL. IF THE ARGUMENT OF SRI SHANKAR, LEARNED COUNSEL FOR THE APPELLANT, IS TO B E ACCEPTED, THEN IT WILL RESULT IN A DISCRIMINATION AGAINST SUCH ASSESS EE- COMPANIES WHO HAVE TO PAY TAX UNDER SECTION 115JB OF THE ACT, BUT HAVE NO CONCESSION AVAILABLE UNDER SECTION 80-IB , WHEREAS THE TAX LIABILITY OF THE PERSON UNDER SECTION 115JB OF THE ACT, WHO CAN CLAIM CONCESSION UNDER SECTION 80-IB OF THE ACT GETS REDUCED FOR THE PURPOSE OF SECTION 115JB OF THE ACT. IT IS, THEREFORE, TO AVOID SECTION 115 JB BEING RENDERED DISCRIMINATORY AND UNCONSTITUTIONAL BEING VIOLATIVE OF ARTICLE 14 OF THE CONSTITUTION OF INDIA, THE CONTENTION OF SR I SHANKAR FOR READING DOWN OR READING UP THE PROVISIONS OF SECTIO N 115JB OF THE ACT, PARTICULARLY BY ADDING TO DIFFERENT SITUATIONS MENTIONED IN THE EXPLANATION, TO BE EXPANDED BY INCLUDING REFERENCE TO SECTION 80-IB OF THE ACT CANNOT BE ACCEPTED. A STATUTORY PROVISION C ANNOT BE SO READ DOWN TO RENDER IT UNCONSTITUTIONAL, BUT READING DOW N A STATUTORY PROVISION IS TO MAKE IT CONSTITUTIONAL AND NOT OTHE RWISE. THEREFORE, THE ARGUMENTS FAIL. 17. THE AHMEDABAD BENCH OF TRIBUNAL ALSO CONSI DERED AN IDENTICAL ISSUE IN THE CASE OF GANESH HOUSING CORPORATION LTD VS. ACIT (2009)(32 SOT 207), WHEREIN IT WAS HELD AS UNDER:- 8. FROM THE PERUSAL OF AFORESAID SECTION, IT IS APPAR ENT THAT IF IN THE CASE OF AN ASSESSEE BEING A COMPANY THE INCOME-TAX COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME-TAX AC T COMES TO LESS THAN 10 PER CENT OF THE BOOK PROFIT, SUCH BOOK PROF IT SHALL BE DEEMED TO BE THE TOTAL INCOME OF THE ASSESSEE AND THE TAX PAYABLE BY THE ASSESSEE ON SUCH TOTAL INCOME, I.E., BOOK PROFIT WI LL BE COMPUTED AT THE RATE OF 10 PER CENT. IN SUCH A SITUATION, NO OTHER PROVISIONS CONTAINED IN THE INCOME-TAX ACT WILL BE APPLICABLE. SUB-SECTI ON (2) STIPULATES THAT FOR THE PURPOSE OF THIS SECTION, THE PROFIT AND LOS S ACCOUNT FOR THE RELEVANT PREVIOUS YEAR SHALL BE PREPARED IN ACCORDA NCE WITH THE PROVISIONS OF PARTS II AND III OF SCHEDULE VI TO TH E COMPANIES ACT, 1956. IT HAS FURTHER BEEN LAID DOWN THAT WHILE PREP ARING THE ANNUAL ACCOUNTS INCLUDING THE PROFIT AND LOSS ACCOUNT, THE ACCOUNTING POLICIES, ACCOUNTING STANDARDS, THE METHODS AND RATES ADOPTED FOR CALCULATING THE DEPRECIATION SHALL BE THE SAME AS HAS BEEN ADOP TED FOR THE PURPOSE OF PREPARING SUCH ACCOUNTS INCLUDING THE PR OFIT AND LOSS ACCOUNT AND LAID BEFORE THE COMPANY AT THE ANNUAL G ENERAL MEETING IN ACCORDANCE WITH THE PROVISIONS OF SECTION 210 OF THE COMPANIES ACT, 1956. EXPLANATION 1 DEFINES BOOK PROFIT FOR THE PURPOSE OF SECTION 115JB TO MEAN THE NET PROFIT AS SHOWN IN TH E PROFIT AND LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR AS PREPARED UNDER SUB-SECTION (2) AND INCREASED WITH THE ITEMS AS HAS BEEN STIPUL ATED UNDER CLAUSES (A) TO (H ) OF EXPLANATION 1 AND HAS TO BE REDUCED BY THE ITEMS AS STIPULATED UNDER CLAUSES (I) TO (VIII). THUS, TH E BOOK PROFIT WILL BE THE NET PROFIT AS SHOWN IN THE PROFIT AND LOSS ACCOUNT AS HAS BEEN LAID ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 12 BEFORE THE COMPANY AT ITS ANNUAL GENERAL MEETING IN ACCORDANCE WITH THE PROVISIONS OF SECTION 210 OF THE COMPANIES ACT, 1956 AND AS HAS BEEN ARRIVED AT BY FOLLOWING THE ACCOUNTING POLICIE S, ACCOUNTING STANDARDS AND THE METHODS AND RATES ADOPTED FOR CAL CULATING THE DEPRECIATION AS HAS BEEN ADOPTED FOR PREPARING THE PROFIT AND LOSS ACCOUNT AS LAID BEFORE THE ANNUAL GENERAL MEETING. THUS, THE NET PROFIT AS SHOWN IN THE PROFIT AND LOSS ACCOUNT LAID BEFORE THE ANNUAL GENERAL MEETING WILL BE THE BOOK PROFIT BUT THIS BO OK PROFIT IS SUBJECT TO THE ADJUSTMENT AS LAID DOWN UNDER EXPLANATION 1, CLAUSES (A) TO (H ) AND CLAUSES (I) TO ( VIII). CLAUSES (IV), (V) AND (VI ) NO DOUBT STATE THAT THE PROFIT HAS TO BE REDUCED BY THE AMOUNT OF PROFI T ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC, UNDER SECTION 80HHE AND UNDER SECTION 80HHF, RESPECTIVELY. CLAUSES (I) TO (VIII) UNDER EXPLANATION 1 NOWHERE PROVIDES FOR THE REDUCTION OF THE DEDUCTION ALLOWABLE UNDER SECTION 80-IB OUT OF THE BOOK PROFIT. SUB-SECTION ( 3) STATES THAT THE PROVISIONS OF SECTION 115JB(1) WILL NOT AFFECT THE DETERMINATION OF THE AMOUNTS IN RELATION TO THE RELEVANT PREVIOUS YEARS TO BE CARRIED FORWARD TO THE SUBSEQUENT YEAR OR YEARS UNDER SECTI ON 32(2) OR 32A(3) OR 72(1) OR 73 OR 74A(3). SECTION 115JB(4) MAKES IT MANDATORY ON THE PART OF THE ASSESSEE-COMPANY TO WHOM SECTION 115JB IS APPLICABLE TO FURNISH A REPORT IN THE PRESCRIBED FORM FROM THE CH ARTERED ACCOUNTANT CERTIFYING THAT THE BOOK PROFIT HAS BEEN COMPUTED I N ACCORDANCE WITH THE PROVISIONS OF THIS SECTION AND SUCH REPORT SHOU LD BE FURNISHED ALONG WITH THE RETURN OF INCOME FILED UNDER SECTION 139(1) OR IN RESPONSE TO A NOTICE UNDER SECTION 142(1)(I). SUB-SECTION (5) PROVIDES THAT ALL THE PROVISIONS OF THIS ACT SHALL APPLY TO EVERY ASSESSEE BEING A COMPANY EXCEPT TO THE EXTENT OTHERWISE PROV IDED IN THIS SECTION. THE CRUX OF THE ARGUMENTS OF THE LEARNED AR IS ON THIS SUB-SECTION AND, THEREFORE, HE PLEADED THAT THE DED UCTION AVAILABLE UNDER SECTION 80-IB SINCE FALLS UNDER CHAPTER VI-A AND HAS TO BE ALLOWED TO THE ASSESSEE EVEN A COMPANY WHILE COMPUT ING THE TOTAL TAXABLE INCOME, THEREFORE, IN VIEW OF SUB-SECTION ( 5) OF SECTION 115JB, THE ASSESSEE SHOULD BE ALLOWED THE DEDUCTION IN RES PECT OF THE INCOME ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB WHILE CO MPUTING THE BOOK PROFIT UNDER THIS SECTION. WE DO NOT AGREE WITH THE CONTENTION OF THE LEARNED AR BECAUSE THE DEDUCTION UNDER SECTION 80-I B IF WE READ THE LANGUAGE OF SECTION 80-IB IS AVAILABLE OUT OF THE G ROSS TOTAL INCOME PROVIDED THE GROSS TOTAL INCOME OF AN ASSESSEE INCL UDES ANY PROFITS AND GAINS DERIVED FROM THE ELIGIBLE BUSINESS. SECTI ON 115JB IS CONCERNED WITH THE COMPUTATION OF BOOK PROFIT, AND NOT THE TOTAL INCOME. THE TERMS 'BOOK PROFIT' AND 'TOTAL INCOME' BOTH ARE HAVING DIFFERENT MEANINGS. 'BOOK PROFIT' IS DEFINED UNDER EXPLANATION 1 AS POINTED OUT BY US EARLIER UNDER SE CTION 115JB WHILE THE 'TOTAL INCOME' IS DEFINED UNDER SECTION 6 6. UNDER SECTION 115JB, WE ARE CONCERNED WITH THE DETERMINAT ION OF THE BOOK PROFIT, AND NOT THE TOTAL INCOME OR THE GROSS TOTAL INCOME. 9. CHARGE OF INCOME-TAX AS PER SECTION 4 OF THE INCOM E-TAX ACT IS ON THE TOTAL INCOME OF THE PREVIOUS YEAR OF EVERY PERS ON. THE SCOPE OF THE TOTAL INCOME IS DEFINED UNDER SECTION 5 OF THE INCO ME-TAX ACT WHICH IS ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 13 DIFFERENT IN THE CASE OF RESIDENTS AND NON-RESIDENT S. THE RESIDENT IN INDIA OR NON-RESIDENT HAS TO BE DETERMINED IN ACCOR DANCE WITH THE PROVISIONS OF SECTION 6 OF THE INCOME-TAX ACT. SECT IONS 10 TO 13A DEAL WITH THE INCOME, WHICH DO NOT FORM PART OF THE TOTA L INCOME. SECTION 14 DEALS WITH THE PROVISIONS HOW THE TOTAL INCOME IS T O BE COMPUTED UNDER DIFFERENT HEADS OF INCOME, VIZ., SALARIES, INCOME FROM HOUSE PROPERTY, PROFITS AND GAINS OF BUSINESS OR PROFESS ION, CAPITAL GAINS AND INCOME FROM OTHER SOURCES. AFTER COMPUTING TH E INCOME UNDER THE DIFFERENT HEADS AS PER THE PROVISIONS OF SECTIO NS 14 TO 59, THERE ARE CERTAIN INCOME OF OTHER PERSONS WHICH ARE TO BE INCLUDED IN ASSESSEES TOTAL INCOME. THEY ARE BEING DEALT WITH UNDER SECTIONS 60 TO 65 OF THE ACT. SECTION 66 LAYS DOWN THAT IN COMP UTING THE TOTAL INCOME OF THE ASSESSEE THERE SHALL BE INCLUDED ALL THE INCOME ON WHICH NO INCOME-TAX IS PAYABLE UNDER CHAPTER VII. S ECTIONS 67 TO 79 FALLING UNDER CHAPTER VII DEAL WITH THE AGGREGATION OF THE INCOME AND SET-OFF AND CARRY-FORWARD OF THE LOSSES WHILE COMPU TING THE TOTAL INCOME OF THE ASSESSEE. HOWEVER, CHAPTER VI-A DEALS WITH VARIOUS PROVISIONS RELATING TO THE DEDUCTIONS TO BE MADE IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. THESE DEDUCTIONS ARE TO BE MADE OUT OF THE GROSS TOTAL INCOME. GROSS TOTAL INCOME IS DEFINED U NDER SECTION 80B(5) TO MEAN THE TOTAL INCOME COMPUTED IN ACCORDANCE WIT H THE PROVISIONS OF THE INCOME-TAX ACT BEFORE MAKING ANY DEDUCTION U NDER CHAPTER VI- A. THE DEDUCTION UNDER SECTION 80-IB IS ALLOWABLE T O THE ASSESSEE ON THE PROFITS OF THE ELIGIBLE BUSINESS INCLUDED IN TH E GROSS TOTAL INCOME OUT OF THE GROSS TOTAL INCOME AND FALLS UNDER CHAPT ER VI-A. SECTION 80A(1) PROVIDES IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE, THERE SHALL BE ALLOWED FROM HIS GROSS TOTAL INCOME IN ACC ORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS ACT, THE DEDUCTIO N SPECIFIED IN SECTIONS 80C TO 80U. THUS, THE INCOME COMPUTED PRIOR TO THE DEDUCTION UNDER CHAPTER VI-A HAS TO BE REGARDED TO BE THE GROSS TOT AL INCOME AND ONCE THE DEDUCTIONS UNDER CHAPTER VI-A ARE ALLOWED, THE TOTAL INCOME IS ARRIVED AT. ON THIS TOTAL INCOME, THE TAX IS COMPUT ED SUBJECT TO THE PROVISIONS CONTAINED IN CHAPTERS VII AND VIII OF TH E INCOME-TAX ACT. SECTION 115JB AS HAS BEEN REPRODUCED HEREINABOVE IT SELF DISTINGUISHES IN THE TERMS TOTAL INCOME AND BOOK PROFIT. IT CLEARLY STATES THAT FIRSTLY, THE TOTAL INCOME OF THE ASSESS EE HAS TO BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE I NCOME-TAX ACT. SECONDLY, THE INCOME-TAX PAYABLE ON THE TOTAL INCOM E SO COMPUTED HAS TO BE DETERMINED. THIRDLY, THE BOOK PROFIT HAS TO BE WORKED OUT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 115JB. FO URTHLY, THE INCOME-TAX PAYABLE ON THE TOTAL INCOME HAS TO BE CO MPARED WITH THE BOOK PROFIT AND ON COMPARISON, IF IT IS FOUND THAT THE INCOME-TAX PAYABLE IS LESS THAN 10 PER CENT OF THE BOOK PROFIT , THE BOOK PROFIT SO WORKED OUT SHALL BE DEEMED TO BE THE TOTAL INCOME O F THE ASSESSEE AND THE TAX PAYABLE BY THE ASSESSEE ON SUCH BOOK PR OFIT SHALL BE THE AMOUNT OF INCOME-TAX AT THE RATE OF 10 PER CENT. TH US, THE BOOK PROFIT AND TOTAL INCOME HAS TO BE COMPUTED INDEPENDENTLY . THEREFORE, IN OUR OPINION, THE ASSESSEE COULD NOT BE ALLOWED DEDU CTION UNDER SECTION 80-IB WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JB. ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 14 18. THE ABOVE SAID DECISIONS CLEARLY BRING OUT T HAT THE TERM TOTAL INCOME AND BOOK PROFIT ARE CLEARLY DISTINGUISHED UNDER T HE ACT. THE BOOK PROFIT IS REQUIRED TO BE COMPUTED IN ACCORDANCE WITH THE PROV ISIONS OF SEC. 115JB OF THE ACT, WHILE THE TOTAL INCOME IS REQUIRED TO BE C OMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. WHILE COMPUTING THE TOT AL INCOME, THE DEDUCTION U/S 80IB(10) IS ALLOWED. HOWEVER, THE BOOK PROFIT IS REQUIRED TO BE COMPUTED STRICTLY IN ACCORDANCE WITH SEC.115JB OF THE ACT, W HICH DOES NOT SPECIFY AMOUNT COMPUTED U/S 80IB(10) AS A PERMISSIBLE DEDU CTION. 19. THE LD A.R PLACED HEAVY RELIANCE ON THE DECI SION RENDERED BY THE CO- ORDINATE BENCH IN THE CASE OF NEHA HOME BUILDERS (P ) LTD VS. CIT (2018)(92 TAXMANN.COM 102), WHEREIN IT WAS HELD THAT THE ASSE SSEE IS ENTITLED FOR DEDUCTION U/S 80IB(10) OF THE ACT WHILE COMPUTING B OOK PROFIT U/S 115JB OF THE ACT. ON A CAREFUL PERUSAL OF THE ORDER PASS ED IN THE CASE OF NEHA HOME BUILDERS (P) LTD (SUPRA), WE NOTICE THAT THE S AME IS RELATED TO THE APPEAL PREFERRED AGAINST THE REVISION ORDER PASSED BY LD CIT U/S 263 OF THE ACT. IN THE ABOVE SAID CASE, THE AO HAD ACCEPT ED THE CLAIM OF THE ASSESSEE FOR GRANTING DEDUCTION U/S 80IB(10) OF THE ACT FROM THE NET PROFIT, WHILE COMPUTING BOOK PROFIT U/S 115JB OF THE ACT. THE LD CIT FOLLOWED THE DECISION RENDERED BY HONBLE KARNATAKA HIGH COU RT AND AHMEDABAD BENCH OF TRIBUNAL (BOTH THE CASES REFERRED ABOVE) A ND HELD THAT THE ASSESSEE CANNOT CLAIM DEDUCTION U/S 80IB(10) OF THE ACT WHILE COMPUTING BOOK PROFIT. THE TRIBUNAL TOOK THE VIEW THAT THE A O HAS TAKEN A POSSIBLE VIEW AND ACCORDINGLY SET ASIDE THE REVISION ORDER. THE TRIBUNAL HAS TAKEN THE VIEW THAT THE DECISION RENDERED BY NON-JURISDIC TIONAL HIGH COURT CANNOT TRIGGER REVISION PROCEEDINGS U/S 263 OF THE ACT. SINCE THE DECISION HAS BEEN RENDERED BY THE TRIBUNAL IN THE CONTEXT OF PROVISIONS OF SEC.263 OF THE ACT, WE ARE OF THE VIEW THAT THE ASSESSEE CA NNOT PLACE RELIANCE ON THIS DECISION RENDERED BY THE CO-ORDINATE BENCH. 20. IN VIEW OF THE FOREGOING DISCUSSIONS, IN OUR CONSIDERED VIEW, THE CONTENTION OF THE LEARNED A.R. THAT PROVISIONS OF S ECTION 80IB(10) WOULD FALL UNDER THE CATEGORY OF ALL OTHER PROVISIONS OF THE ACT AS MENTIONED IN SECTION 115JB(5) IS LIABLE TO BE REJECTED. ACCORD INGLY WE HOLD THAT THE ITA NO. 5125/MUM/2016 M/S. ROCKLINE DEVELOPERS P. LTD. 15 ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION U/S 80I B(10) OF THE ACT FROM THE NET PROFIT FOR THE PURPOSE OF COMPUTING BOOK PROFI T U/S 115JB OF THE ACT. ACCORDINGLY WE CONFIRM THE ORDER PASSED BY LD CIT(A ) ON THIS ISSUE. 21. THE NEXT ISSUE URGED BY THE ASSESSEE RELATES TO THE INTEREST CHARGED U/S 234B AND 234C OF THE ACT. AT THE TIME OF HEARING, THE LD A.R SUBMITTED THAT THIS GROUND HAS TO BE DECIDED AGAINST THE ASSESSEE IN VIEW OF THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF RO LTA INDIA LTD (SUPRA). HE SUBMITTED THAT THE INTEREST U/S 234C IS CHARGED ON THE RETURNED INCOME AND ACCORDINGLY PRAYED THAT THE AO MAY BE DIRECTED ACCO RDINGLY. 22. WE HEARD LD D.R ON THIS ISSUE. THERE IS NO DISPUTE THAT INTEREST U/S 234B AND 234C IS CHARGEABLE ON THE TAX PAYABLE U/S 115JB OF THE ACT. ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE INTEREST U/S 234C IS CHARGED ON THE RETURNED INCOME AS PER THE PROVISIONS OF SEC. 2 34C OF THE ACT. WE FIND MERIT IN THE SAID SUBMISSIONS. ACCORDINGLY WE REST ORE THIS ISSUE RELATING TO CHARGING OF INTEREST U/S 234C OF THE ACT TO THE FIL E OF THE AO. 21. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JULY, 2018. SD/ - SD/ - (PAWAN SINGH) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 6 TH JULY, 2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -21, MUMBAI 4. THE PR. CIT - 13, MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.