BHILAI WIRES LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the Income-tax Act, 1961, wherein two questions have been referred at the instance of the Revenue/Department and one at the instance of the assessee which read as under :

(2.) THE assessee-company carried on the business in manufacturing and sale of wire drawings (steel, etc.). For the assessment year 1988-89, the assessee furnished computation of income along with the return of income, under Section 115J of the Income-tax Act (hereinafter referred to as the "Act") showing the book profit of Rs. 2,20,688 and tax payable under Section 115J of the Act as nil. During the course of assessment proceedings, a revised computation under Section 115J of the Act was filed by the assessee computing the book profit of Rs. 8,30,178 and declared the income at 30 per cent. amounting to Rs. 2,49,053 which is liable to tax and declared the income and liability to tax at the rate of 55 per cent. at Rs. 1,36,979. THE Assessing Officer did not accept the above computation and determined the assessee's book profit at Rs. 23,54,501 and determined the tax at Rs. 7,06,150 under Section 115 of the Act.

(3.) WE have heard learned counsel for both the parties and perused the record.