Case Law Details
Brief of the Case
ITAT Bangalore held In the case of M/s B & B Infotech Ltd. vs. ITO that once P&L A/c is admittedly prepared as per Schedule VI of the Companies Act, then neither the AO has any power to tinker with it nor the assessee is permitted to claim exclusion or inclusion of any item of income or expenditure as the case may be, for the purpose of computing book profits u/s 115JB except the permissible adjustment provided under the Explanation to sec.115JB itself. In the given case, it is not disputed that this amount does not fall in the ambit of any of the clauses of Explanation to 115JB.
Facts of the Case
The assessee filed its return of income on 25/3/2006 declaring ‘nil’ income. A notice u/s 148 was issued on 8/11/2006 whereby the AO sought to tax under MAT an amount of Rs.43 lakhs being remission of liability of ING Vysya Bank Ltd. The assessee submitted before the AO that this remission of the liability was on account of principal amount of loan and therefore, the same is not in the nature of income which can be considered as part of the book profits u/s 115JB. The AO rejected the objections of the assessee and added the said amount of Rs.43 lakhs while computing book profits u/s 115JB.
Contention of the Assessee Please become a Premium member. If you are already a Premium member, login here to access the full content.
