catchwords: MAT
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Whether S. 115JB Is Applicable If Amount Is Directly Credited To Capital Reserve Account?
From the query it is not clear what type of a capital asset has been transferred and directly credited to capital reserve account. The cardinal principle has been propounded by the Supreme Court in Apollo Tyres Ltd. vs. CIT [255 ITR 273], while deciding the matter under Section 115J of the Income-tax Act, 1961 which was precursor to
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We have made a capital profit of Rs. 10 crores. Can we exclude it from MAT book profits for s. 115JB?
No! Even if capital profits are credited to the capital reserves a/c in the balance sheet, they have to be added to the “book profits” for purposes of s. 115JB.