JUDGMENT Santosh Hegde, J.-These appeals arise out of a common judgment delivered by a Division Bench of the Kerala High Court in ITR Nos. 70/1994 and 43/1997. 2. Civil Appeal No. 6100/1998 is preferred by the assessee company and Civil Appeal Nos. 2518-19/1999 are preferred by the C.I.T., Ernakulam. 3. Though a number of questions came up for consideration before the High Court, in these appeals, based on the arguments addressed before us, we are mainly concerned with the following three questions : (i) Can an Assessing Officer while assessing a company for income tax under Section 115-J of the Income Tax Act question the correctness of the profit and loss account prepared by the assessee company and certified by the statutory auditors of the company as having been prepared in accordance with the requirements of Parts II and III of Schedule VI to the Companies Act? (ii) Whether the dividend income earned by the assessee company from its investment made in the units of Unit Trust of India, can be included in computing the profit of the eligible business under Section 32AB of the Income Tax Act ? (iii) Whether the business of buying and selling of units of Unit Trust of India by the assessee company amounts to a speculation business or not, for the purpose of allowing set off as to the loss suffered by the company in such a business ? 4. Brief facts necessary for the disposal of first of the above questions are as follows : 5. The assessee company while determining its net profit for the relevant accounting year has provided for arrears of depreciation in its profit and loss account which according to the Revenue is not in accordance with Part II and III of Schedule VI to the Companies Act, 1956 (the Companies Act ). Hence, the assessing officer while considering the case of the assessee company under Section 115-J of the IT Act recomputed the said profit and loss account of the company so as to exclude the provisions made for arrears of depreciation. Hence, the assessing officer while considering the case of the assessee company under Section 115-J of the IT Act recomputed the said profit and loss account of the company so as to exclude the provisions made for arrears of depreciation. The said action of the assessing officer in questioning the correctness of the accounts maintained by the company was challenged by the company before the Income Tax Appellate Tribunal ( the tribunal ) which among other things held that the assessing officer has no authority to reopen the accounts of a company which is certified by the auditors of the company as having been maintained in accordance with the provisions of the Companies Act and which account has been accepted in the General Meeting of the Company as well as by the Registrar of Companies. This view of the tribunal was not accepted by the High Court which held that the assessing officer has the authority to examine whether the accounts of the company have been maintained in accordance with the requirement of sub-section (1A) of Section 115-J and in that process if he finds that the accounts of the company are not in accordance with the provisions of the Companies Act, he could make the necessary changes before proceeding to assess the company for tax under the Explanation to Section 115-J of the IT Act. 6. The relevant part of Section 115-J of the IT Act reads as follows:- "115-J. (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee being a company [(other than a company engaged in the business of generation or distribution of electricity)], the total income, as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1988 [but before the 1st day of April, 1991] (hereinafter in this section referred to as the relevant previous year), is less than thirty per cent of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent of such book profit. [(1A) Every assessee, being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956).] Explanation.-For the purposes of this section, "book profit" means the net profit as shown in the profit and loss account for the relevant previous year [prepared under sub-section (1A)], as increased by - (a) the amount of income-tax paid or payable, and the provision therefor; or (b) the amounts carried to any reserves [(other than the reserves specified in Section 80HHD [or sub-section (1) of section 33AC)], by whatever name called; or (c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or (d) the amount by way of provision for losses of subsidiary companies; or (e) the amount or amounts of dividends paid or proposed; or (f) the amount or amounts of expenditure relatable to any income to which any of the provisions of Chapter III [applies; or] (g) the amount withdrawn from the reserve account under Section 80HHD, where it has been utilised for any purpose other than those referred to in sub-section (4) of that section; or (h) the amount credited to the reserve account under Section 80HHD, to the extent that amount has not been utilised within the period specified in sub-section (4) of that section; [(ha) the amount deemed to be the profits under sub-section (3) of section 33 AC;] [If any amount referred to in clauses (a) to (f) is debited or, as the case may be, the amount referred to in clauses (g) and (h) is not credited] to the profit and loss account, and as reduced by - (i) the amount withdrawn from reserves [(other than the reserves specified in section 80HHD)] or provisions, if any such amount is credited to the [profit and loss account: Provided that, where this section is applicable to an assessee in any previous year (including the relevant previous year), the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 1988 shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation; or ] (i) the amount of income to which any of the provisions of Chapter III applies, if any such amount is credited to the profit and loss account; or (ii) the amounts [as arrived at after increasing the net profit by the amounts referred to in clauses (a) to (f) and reducing the net profit by the amounts referred to in clauses (i) and (ii)] attributable to the business, the profits from which are eligible for deduction under section 80HHC or section 80HHD; so, however, that such amounts are computed in the manner specified in sub-section (3) or sub-section (3A) of section 80HHC or sub-section (3) of sec