Book Profit

Charge under section 115JB is to be determined with reference to 7.5 per cent of book profits; the process of determination of book profit is to be preceded with the comparison of liability for income-tax under normal provisions of income-tax which may be nil also; the income-tax payable cannot be circumscribed by positive figure only and, therefore, to say that those companies where income-tax payable being Rs. 1/- would be covered and not the Zero tax companies, would .. Full Article

The Tribunal had to consider whether an assessee liable to pay Minimum Alternate Tax u/s 115JA was also liable to pay interest u/ss 234B & 234C for short-fall in payment of advance tax. The Judicial Member followed the judgement of the Bombay High Court in Snowcem India Ltd 313 ITR 170 and held that interest u/ss 234B and 234C could not be levied when book profits was computed u/s 115JA. Full Article

Prior to insertion of the proviso to clause (i) of the Explanation of section 115JB the assessee was entitled to reduce the sum from revaluation reserve while computing book profit under section 115JB; however, after the insertion of the proviso to clause (i) of Explanation to section 115JB, the assessee has been deprived from this benefit by clearly mandating that in case the amount of such reserve has not been added back by the assessee in relevant assessment year i.e... Full Article

The long term capital gain included in the net profit prepared under the Companies Act is not deductible from the net profit for the purpose of computing book profit u/s115JB; merely because the long term capital gain is not liable to be taxed under the normal provision of the Act for the reason that the assessee has made investment in specified schemes as contemplated u/s 54EC, it is not correct to say that it is also to be reduced from the net profit for the purpose of.. Full Article

The government may retain profit as the key condition for levying minimum alternate tax (MAT) in the final draft of the direct taxes code after its asset-based approach proposed earlier ran into a storm of protests from industry. Other options being considered by the government include tax exemptions for asset-heavy infrastructure companies and start-ups, and a lower rate for MAT, a senior government official told. Full Article

Section 115JA of the Income-tax Act, 1961 - Minimum alternate tax - Assessment year 2000-01 - Assessee had created a reserve in assessment year 1986-87 by enhancing value of assets - Assessee had withdrawn Rs. 1.53 crores from said reserve and credited it to profit and loss account - In assessment year 2000-01 assessee-company claimed deduction of Rs. 1.53 crores from book profit for calculating adjusted book profit under section 115JA - Assessing Officer allowed assesse.. Full Article

SUMMARY OF CASE LAW In the revision proceedings, the CIT cannot travel beyond the reasons given by him for revision in the show cause notice. CASE LAW DETAILS Decided by: ITAT, `G’ BENCH, MUMBAI,In The case of: Geometric Software Solutions Co. Ltd. v. ACIT,Appeal No.: ITA No. 3464/Mum/2008,Decided on: July 10, 2009. Full Article

The Finance Ministry on Thursday defended the concept of gross assets tax proposed under the new direct taxes code, stating that it met both “efficiency” and “equity” considerations. The proposal to go in for a minimum alternative tax (MAT) based on gross assets may be “unconventional” for India, but certainly not from the point of [...] Full Article