Exempt income expenses must be strictly excluded from book profits to compute MAT

Asian Paints Limited Vs DCIT (ITAT Mumbai) Conclusion: Eempt income, which were disallowed under Section 14A could not be automatically added back to compute the “book profit” for Minimum Alternate Tax (MAT) under Section 115JB without pinpointing real, actual expenditures recorded in the books of accounts by tax authorities that possess a direct nexus with the tax-free earnings. Held: Assessee-company  earned a significant amount of tax-exempt income during the relevant financial year. While filing its standard tax return, assessee made a specific disallowance of expenses linked to this...