SIDCUL INDUSTRIAL ASSOCIATION Vs. STATE OF UTTARAKHAND

JUDGEMENT

(1.) Chapter II of the Income-tax Act, 1961 (hereinafter referred to as the "the Act") provides the basis of charge. Section 4, contained therein, is the charging section. The said section, amongst others, prescribes that income-tax shall be charged in accordance with and subject to the provisions of the Act, in respect of total income. Section 5, also contained in Chapter II, defines the scope of total income.

(2.) Chapter III of the Act brings forth such incomes, which do not form part of total income. Chapter IV, while defines the nature of different heads of income, prescribes computation of total income under those heads, individually as well as collectively. One of the heads of income is "Profits and gains of business or profession". Chapter VI-A prescribes the deductions to be made in computing total income.

(3.) Chapter XII-B contains special provisions relating to certain companies. Section 115JB is contained in Chapter XII-B. The said section was inserted by the Finance Act, 2000, with effect from April 1, 2001. In terms thereof, notwithstanding anything contained in any other provision of the Act, if the Assessee is a company and the income-tax payable by it on the total income, as computed under the Act, in respect of any previous year relevant to the assessment year commencing on or after April 1, 2007, is less than 10 per cent. of its book profit, such book profit shall be deemed to be the total income of the Assessee and tax payable by the Assessee, on such total income, shall be at the rate of 10 per cent. The section, therefore, contains a non obstinate clause as well as a deeming clause.