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Amount withdrawn from revaluation reserve and credited to the Profit & Loss account cannot be reduced from the book prof
Case Law Details
- Case Name
- Indo Rama Synthetics (I) Ld. Vs. CIT, New Delhi (Supreme Court) (Civil Appeal of 2011 arising out of SLP (C) No. 35133 of 2009)
- Courts
- Supreme Court of India
Amount withdrawn from revaluation reserve and credited to the Profit & Loss account cannot be reduced from the book profit if such amount had not increased the book profit at the time of creation of reserve
Facts
• The taxpayer is a limited company engaged in the business of manufacture of yarn and polyester.
• The taxpayer during the assessment year (“AY”) 2000-01 revalued its fixed assets by increasing the net book value by INR 2885.8 million and credited the said sum to the revaluation reserve.
• In the subsequent year i.e. AY 2001-02, the taxpayer debited to the Profit &...
