Capital gains exempt u/s 54EC could be reckoned for book profit u/s 115JA

Fibroflex (India) Pvt. Ltd. Vs DCIT (ITAT Chennai)

In the given case the issue under consideration is that whether capital gains, which were exempt under section 54EC could be reckoned for purpose of computing book profit under section 115JA.

The adjusted book profits would be further eligible to the benefits set out in the other provisions of the Act and the plain language of Section 115JB thus admits of the grant of relief under section 54EC in an assessment there under.

Reliance of the learned standing counsel on the decision of the Division Bench of the Kerala High Court in the case of N.J.Jose and Co.(P) Ltd. vs. Asst. Commissioner of Income Tax and another (321 ITR 133). In the light of the binding decision of the jurisdictional High Court, ITAT hold that the capital gains which are exempt u/s.54EC cannot be reckoned for the purpose of computing book profit u/s.115JA.

FULL TEXT OF THE ITAT JUDGEMENT

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