net profit

For the aforestated reasons, we hold that AAD is a timing difference, it is not a reserve, it is not carried though profit and loss account and that it is "income received in advance" subject to adjustment in future and, therefore, clause (b) of Explanation- I to Section 115JB is not applicable. | Accordingly, the impugned ruling is set aside and the civil appeal filed by the asscssee stands allowed with no order as to costs. Full Article

This ruling provides guidance that withdrawal from a revaluation reserve is permitted to be reduced from the book profit, computed under the MAT provisions, only in a case where the book profit was increased by the amount of revaluation reserve in the year of creation. Full Article

The assessee earned long-term capital gains of Rs. 40.57 L which was not chargeable to tax u/s 54EC. As the said gains were credited to the P&L A/c, the assessee excluded the gains whilst computing “book profits” u/s 115JB in view of the Special Bench judgement in Sutlej Cotton Mills 45 ITD 22 (Cal) (SB) where it had been held that non-taxable capital receipts had to be excluded from book profits. The AO and the CIT (A) rejected the claim. On appeal by the assessee H.. Full Article

It was zero-tax companies, which were profitable and paid dividends to shareholders but owing to various deductions/sops available under the tax laws did not have a taxable income and thus did not pay tax, that caught the attention of the legislators and led to the introduction of MAT. Under the existing provision a company is liable to pay minimum tax u/s. 115JB on its book profit @ 10% if the tax payable by such company on the total income under the other provisions of.. Full Article

S. 115JB(1) of the Income-tax Act, 1961 (Act in short) provides for payment of a minimum alternate tax in case the Income-tax computed on the total income falls short of 10% of the book profits of the company. For ensuring that companies do not adopt accounting practices to render the provision otiose, Ss.(2) requires the profit and loss account of companies to be prepared as per Parts II and III of Schedule VI to the Companies Act, 1956. Proviso to this sub-section fur.. Full Article

The second ground for passing provisional order by the CIT under Section 263 of the Act relates to the provision for doubtful debts. As per the CIT, the provision for doubtful debts at Rs.818.03 lacs debited in the Profit and Loss account was not added back for calculating book profit under Section 115JB of the Act, which resulted into underassessment of income to that extent. In forming this opinion, the CIT has governed itself by the judgment of the Madras High Court i.. 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

SUMMARY OF CASE LAW Merely on the basis of statement having been recorded, no addition can be made unless the same can be corroborated by any material either found during the course of survey or subsequently brought on record by the department while framing the assessment. Full Article