Section: 115JB
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Book profit -Agricultural income of Company
From the fact, it is apparent that querist is a company and therefore no Alternate Minimum Tax (AMT) would be applicable. For the companies Minimum Alternate Tax (MAT) would be applicable u/s. 115JB of the Act. So while calculating “book profit” under Explanation 1 to section 115JB(1), the agricultural income falling u/s. 10(1) to be excluded as per Explanation (ii)
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Book profit – AO has no jurisdiction to change book profit
The assessee has changed method depreciation from SLM to WDV and shortfall (deficiency) is charged to profit and loss account as per accounting standard. Thus prepared accounts is per schedule VI of the Companies Act, 1956 (i.e. schedule III of the Companies Act, 2013) and certified by the authorities under the Companies Act. Therefore the Assessing Officer has no jurisdiction to go behind the “book profit” shown in P & L account except to the extent of prescribed adjustment mentioned under section 115JB of the Income tax Act, 1961. As per the Supreme Court in Apollo Tyres Ltd. v. CIT [255 ITR 273], while interpreting similar provision under section 115J of the Act.
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Can Penalty Be Levied U/s. 271(1)(c), If Assessment Is Completed U/s. 115JB?
In CIT v. Nalwa Sons Investments Ltd., [327 ITR 543 (Del.)] the facts were the assessee filed return declaring loss of Rs. 43.47 crores. Thereafter, the revised return exhibiting the income at Rs. 3.87 crores were filed under provisions of section 115JB
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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.