Dismissing the appeal of the revenue the Court held that ,Banking, Insurance and Electricity company are not company bound by provisions of Companies Act. (Pre amendment by Finance Act, 2012) Provision is not applicable to a banking company (also insurance & electricity cos).The mechanism provided for computing book profit in terms of S. 115JB(2) is wholly unworkable for a banking company. When the machinery provision fails, the charging section also fails- The anomaly was removed by the Finance Act, 2012-However, the amendments are neither declaratory nor clarificatory but make substantive and significant legislative changes which are applicable prospectively.( Followed Kerala State Electricity Board v.Dy CIT ( 20110) 329 ITR 91 (Ker)(HC) ) .( ITA No. 1196 of 2013 and 1175 of 2013, dt. 16.04.2019)
CIT v. Union Bank of India ( 2019) 177 DTR 305/ 308 CTR 797/ 263 Taxman 685 (Bom)(HC).www.itatonline.orgEditorial: SLP is granted to the revenue PCIT v. Union Bank of India ( 2019) 418 ITR 9 (St) (SC)/ ( 2020) 269 Taxman 487 (SC)
S. 115JB : Book profit – Banking – Insurance – Electricity company- Are not company bound by provisions of Companies Act – (Pre amendment by Finance Act, 2012)-Provision is not applicable to a banking company , insurance & electricity cos- The mechanism provided for computing book profit in terms of S. 115JB(2) is wholly unworkable for a banking company- When the machinery provision fails, the charging section also fails-Provision is not applicable -The anomaly was removed by the Finance Act, 2012-However, the amendments are neither declaratory nor clarificatory but make substantive and significant legislative changes which are applicable prospectively.