Societe Generale v. Dy. DIT (IT) (2013) 21 ITR 606(Mum.) (Trib.)

S.115JB: Company-Book profit-Bank-Profit and loss account-Not to be altered -Net interest earned by assessee

from placement of funds with head office or other overseas branches is not covered by any of clauses (i) to (ix)

of Explanation to section 115JA hence Includible in computing "book profit". Foreign bank whether governed

by section 115JB-Contention raised for first time-Matter remanded. (S.115A )

For the purposes of section 115JA, the amount of net profit according to the profit and loss account is immune from alteration irrespective of whether the alteration is ventured by the Assessing Officer or the assessee. Just as the Assessing Officer has no authority to go beyond the profit and loss account prepared by the assessee and tinker with the figure of profit so disclosed, this is equally true for the assessee as well. Once an amount as shown to the credit side of the profit and loss account of the assessee and it is not covered by any of the clauses (i) to (ix) of the Explanation to section 115JA, it cannot be reduced.

Accordingly the Tribunal held that that the interest earned by the assessee from its head office or overseas branches was part and parcel of the credit side of the profit and loss account of the assessee. This amount was not covered by any of the clauses from (i) to (ix) of the Explanation. The net interest earned by the assessee from placement of funds with the head office or other overseas branches amounting was includible in computing the "book profit" for the purposes of section 115JA of the Act. Appeal of assessee was dismissed. Before the Tribunal for the first time on the basis of Judgment of Tribunal in Krung Thai Bank PCL (2012) 49 SOT 70 (Mum) (URO) the assessee has raised the issue stating that the assessee being foreign bank is it is not required to draw its profit and loss account as per Companies Act very applicability of provision of section 115JAis not valid. As the issue was raised for the first time the matter was directed to the Assessing Officer to decide accordance with law. (A.Y. 2000-2001) (1998-1999 to 2003-2004)