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“book profits”

Special Rate ProvisionsSection 115JBSection 115JB1,713 judgments

The decision most relied on for book profits is Godrej & Boyce Mfg. Co. Ltd. v. DCIT (328 ITR 81), cited in 1,183 judgments on BharatTax.

Leading authorities on book profits

Godrej & Boyce Mfg. Co. Ltd. v. DCIT
328 ITR 81 · 2010 · High Court
1,183
citing judgments

Rule 8D, for computing disallowance under Section 14A for expenses related to exempt income, applies from Assessment Year 2008-09 onwards; for prior years, a reasonable disallowance must be made. The disallowance under Section 14A cannot exceed the actual exempt income earned.

ACIT v. Vireet Investment Pvt. Ltd.
165 ITD 27 · 2017 · ITAT
882
citing judgments

No disallowance under section 14A can be made while computing book profits under section 115JB unless the expenditure is debited to the profit and loss account and satisfies clause (f) of Explanation 1 to section 115JB(2).

Joint Investments Pvt. Ltd. v. CIT
372 ITR 694 · 2015 · High Court
803
citing judgments

Disallowance under section 14A of the Income Tax Act cannot exceed the actual amount of exempt income earned by the assessee. This principle also applies when computing book profits under section 115JB.

ACIT v. Vireet Investment Pvt. Ltd.
82 Taxmann.com 415 · 2017 · High Court
789
citing judgments

Disallowance computed under Section 14A, read with Rule 8D, cannot be added to book profits under Section 115JB for Minimum Alternate Tax (MAT) purposes. Additionally, for Section 14A disallowance, only investments that yielded exempt income during the year are considered for calculating their average value.

Apollo Tyres Ltd. v. CIT
255 ITR 273 · 2002 · Supreme Court
657
citing judgments

For the purpose of computing book profits under Section 115J, arrears of depreciation, including those arising from assets working extra shifts, are a necessary charge on profits if debited to the profit and loss account and are allowable as such.

Kedarnath Jute Mfg. Co. Ltd. v. CIT
82 ITR 363 · 1971 · Supreme Court
654
citing judgments

Tax liability for an item of income or expenditure is determined solely by the provisions of the Income-tax Act. Entries in an assessee's books of account are not conclusive and do not govern the taxability or deductibility of an item, as the legal rights and obligations under the Act prevail.

CIT v. President Industries
258 ITR 654 · 2002 · High Court
471
citing judgments

When books of account are rejected and unaccounted sales or receipts are discovered, the income addition is restricted to the net profit element embedded in these undisclosed transactions, not the entire sale proceeds or receipts, especially if corresponding purchases are not proven to be outside the books.

CIT v. Yokogawa India Ltd.
341 ITR 385 · 2012 · High Court
270
citing judgments

A provision for doubtful debts cannot be added back while computing book profits under Section 115JB of the Income-tax Act for Minimum Alternate Tax (MAT) purposes.

Judgments citing book profits

Karnataka Bank Ltd, Mangalore vs. Deputy Commissioner of Income Tax, Mangalore

ITA 876/BANG/2023[2016-17]Status: DisposedITAT Bangalore19 Feb 2024AY 2016-17
Section 115JSection 143(3)Section 14A

ITA Nos.876 & 877/Bang/2023 & 963 & 964/Bang/2023 ORDER Per Bench These appeals are filed by the assessee & revenue against the separate orders

Apl Apollo Tubes Limited, Delhi vs. ACIT, Circle 1(1), Delhi

In the result, the appeal of the assessee is allowed

ITA 2971/DEL/2022[2013-14]Status: DisposedITAT Delhi14 Feb 2024AY 2013-14

Bench: Shri G.S. Pannu, Vice- & Shri Challa Nagendra Prasadassessment Year: 2013-14

Section 115Section 271Section 271(1)(c)Section 274

submits that when the income computed in accordance with the normal provisions of the Act is less than the income determined under book profits and the income of the 3 assessee is assessed under Section 115 JA/JB and not under normal provisions of the Act, no penalty can be imposed

Brandix Apparal India Private Limited, Visakhapatnam vs. The Assistant Commissioner of Income Tax, Circle - 5(1), Visakhapatnam

In the result, appeal of the assessee is partly allowed for

ITA 627/VIZ/2018[2014-15]Status: DisposedITAT Visakhapatnam13 Feb 2024AY 2014-15

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Ble(Through Hybrid Hearing) आयकरअपीलसं./ I.T.A. No.627/Viz/2018 ("नधा"रणवष"/ Assessment Year : 2014-15) Brandix Apparel India Private Vs. Assistant Commissioner Of Limited, Income Tax, Apsez, Pudimadaka Road, Circle-5(1), Atchutapuram Mandal, Visakhapatnam. Visakhapatnam – 530011. Pan: Aaccb 6569 L (अपीलाथ"/ Appellant) (""यथ"/ Respondent) अपीलाथ"क"ओरसे/ Assessee By : Sri Darpan Kriplani ""याथ"क"ओरसे/ Revenue By : Dr. Satyasai Rath, Cit-Dr

For Appellant: Sri Darpan KriplaniFor Respondent: Dr. Satyasai Rath, CIT-DR
Section 10ASection 142(1)Section 143(2)Section 143(3)Section 92C

income on 31/3/2016 by claiming an exemption of Rs. 4,73,25,503/- U/s. 10AA of the Act and however, paid tax on book profits. Later on, notices U/s. 143(2) and 142(1) of the Act were issued on 12/7/2016. Further, notice U/s. 142(1) r.w.s ... arguments of the Ld. AR, the Ld. DR argued that from the analysis of the P & L Account, it is seen that the net book profit declared by the assessee is equivalent to the other income. Further, the Ld. DR also referred to the agreement between the Brandix Apparel India

DCIT, Circle-4(2), New Delhi vs. Continental Corrugators Pvt. Ltd., Faridabad

In the result, the appeal of the Revenue is dismissed

ITA 1538/DEL/2022[2017-18]Status: DisposedITAT Delhi08 Feb 2024AY 2017-18

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia

For Appellant: Ms. Rano Jain, AdvFor Respondent: Shri Vivek Kumar Upadhyay, Sr.DR
Section 143(3)Section 56Section 56(2)(viib)

claimed as refund as refund under the Income-tax Act, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto; (v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities; (vi) any amount representing

Madhya Gujarat Vij Company Limited, Vadodara vs. Dy. Commissioner of Income Tax, Circle-2(1)(1), Vadodara

In the result, the appeal filed by the Revenue is allowed for statistical purpose

ITA 374/AHD/2022[2018-19]Status: DisposedITAT Ahmedabad07 Feb 2024AY 2018-19

Bench: Smt. Annapurna Gupta (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 115JSection 143(3)Section 234Section 271(1)(c)Section 32(1)(iia)

company filed its e- Return of Income on 22.10.2014 declaring Nil income after setting off brought forward business losses and unabsorbed depreciation, but a book profit of Rs.25,65,52,381/- and paid taxes along with interest amounting to Rs.5,37,74,661. The case was selected for scrutiny ... Madhya Gujarat Vij Company Ltd. 2.1. Thus the Assessing Officer determined the total income under normal computation at Rs.17,55,73,300/- and book profits u/s. 115JB at Rs.49,87,78,381/-. 3. Aggrieved against the assessment order, the assessee filed an appeal before Ld. CIT(A), who partly allowed

Madhya Gujarat Vij Company Limited, Vadodara vs. Asstt. Commissioner of Income Tax, Circle-2(1)(2), Vadodara

In the result, the appeal filed by the Revenue is allowed for statistical purpose

ITA 373/AHD/2022[2015-16]Status: DisposedITAT Ahmedabad07 Feb 2024AY 2015-16

Bench: Smt. Annapurna Gupta (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 115JSection 143(3)Section 234Section 271(1)(c)Section 32(1)(iia)

company filed its e- Return of Income on 22.10.2014 declaring Nil income after setting off brought forward business losses and unabsorbed depreciation, but a book profit of Rs.25,65,52,381/- and paid taxes along with interest amounting to Rs.5,37,74,661. The case was selected for scrutiny ... Madhya Gujarat Vij Company Ltd. 2.1. Thus the Assessing Officer determined the total income under normal computation at Rs.17,55,73,300/- and book profits u/s. 115JB at Rs.49,87,78,381/-. 3. Aggrieved against the assessment order, the assessee filed an appeal before Ld. CIT(A), who partly allowed

Madhya Gujarat Vij Company Limited, Vadodara vs. Dy. Commissioner of Income Tax, Circle-2(1)(1), Vadodara

In the result, the appeal filed by the Revenue is allowed for statistical purpose

ITA 372/AHD/2022[2014-15]Status: DisposedITAT Ahmedabad07 Feb 2024AY 2014-15

Bench: Smt. Annapurna Gupta (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 115JSection 143(3)Section 234Section 271(1)(c)Section 32(1)(iia)

company filed its e- Return of Income on 22.10.2014 declaring Nil income after setting off brought forward business losses and unabsorbed depreciation, but a book profit of Rs.25,65,52,381/- and paid taxes along with interest amounting to Rs.5,37,74,661. The case was selected for scrutiny ... Madhya Gujarat Vij Company Ltd. 2.1. Thus the Assessing Officer determined the total income under normal computation at Rs.17,55,73,300/- and book profits u/s. 115JB at Rs.49,87,78,381/-. 3. Aggrieved against the assessment order, the assessee filed an appeal before Ld. CIT(A), who partly allowed

Dy. Commissioner of Income Tax, Circle-2(1)(1), Vadodara vs. Madhya Gujarat Vij Company Ltd., Vadodara

In the result, the appeal filed by the Revenue is allowed for statistical purpose

ITA 369/AHD/2022[2018-19]Status: DisposedITAT Ahmedabad07 Feb 2024AY 2018-19

Bench: Smt. Annapurna Gupta (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 115JSection 143(3)Section 234Section 271(1)(c)Section 32(1)(iia)

company filed its e- Return of Income on 22.10.2014 declaring Nil income after setting off brought forward business losses and unabsorbed depreciation, but a book profit of Rs.25,65,52,381/- and paid taxes along with interest amounting to Rs.5,37,74,661. The case was selected for scrutiny ... Madhya Gujarat Vij Company Ltd. 2.1. Thus the Assessing Officer determined the total income under normal computation at Rs.17,55,73,300/- and book profits u/s. 115JB at Rs.49,87,78,381/-. 3. Aggrieved against the assessment order, the assessee filed an appeal before Ld. CIT(A), who partly allowed

Dy. Commissioner of Income Tax, Circle-2(1)(1), Vadodara vs. Madhya Gujarat Vij Company Ltd., Vadodara

In the result, the appeal filed by the Revenue is allowed for statistical purpose

ITA 368/AHD/2022[2015-16]Status: DisposedITAT Ahmedabad07 Feb 2024AY 2015-16

Bench: Smt. Annapurna Gupta (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 115JSection 143(3)Section 234Section 271(1)(c)Section 32(1)(iia)

company filed its e- Return of Income on 22.10.2014 declaring Nil income after setting off brought forward business losses and unabsorbed depreciation, but a book profit of Rs.25,65,52,381/- and paid taxes along with interest amounting to Rs.5,37,74,661. The case was selected for scrutiny ... Madhya Gujarat Vij Company Ltd. 2.1. Thus the Assessing Officer determined the total income under normal computation at Rs.17,55,73,300/- and book profits u/s. 115JB at Rs.49,87,78,381/-. 3. Aggrieved against the assessment order, the assessee filed an appeal before Ld. CIT(A), who partly allowed

Dy. Commissioner of Income Tax, Circle-2(1)(1), Vadodara vs. Madhya Gujarat Vij Company Ltd., Vadodara

In the result, the appeal filed by the Revenue is allowed for statistical purpose

ITA 367/AHD/2022[2014-15]Status: DisposedITAT Ahmedabad07 Feb 2024AY 2014-15

Bench: Smt. Annapurna Gupta (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 115JSection 143(3)Section 234Section 271(1)(c)Section 32(1)(iia)

company filed its e- Return of Income on 22.10.2014 declaring Nil income after setting off brought forward business losses and unabsorbed depreciation, but a book profit of Rs.25,65,52,381/- and paid taxes along with interest amounting to Rs.5,37,74,661. The case was selected for scrutiny ... Madhya Gujarat Vij Company Ltd. 2.1. Thus the Assessing Officer determined the total income under normal computation at Rs.17,55,73,300/- and book profits u/s. 115JB at Rs.49,87,78,381/-. 3. Aggrieved against the assessment order, the assessee filed an appeal before Ld. CIT(A), who partly allowed

M/S. Materials Chemicals and Performance Intermediaries Pvt. Ltd. (Formerly, Mcc Pta India Corp. Private Ltd.), Kolkata vs. ACIT, Circle 11, Kolkata

In the result, the appeal filed by the assessee in ITA No

ITA 388/KOL/2017[2004-05]Status: DisposedITAT Kolkata07 Feb 2024AY 2004-05

Bench: Dr. Manish Borad & Shri Anikesh Banerjee]

Section 115JSection 143(3)Section 250Section 80H

order of MAthe appeal is recalled. In fact, the assessee has claimed deduction u/s 80HHC amounting to Rs. 20,35,75,401/- out of book profit. The assessee claimed deduction after claiming of brought forward loss and unabsorbed depreciation and the assessee has reduced profit to nil. The revenue ... application has sought to raise four additional grounds of appeal bearing Ground no.10 to Ground no.13 which read as under: Ground 10: Considering Adjusted Book Profits instead of Income under the normal provisions for computing the deduction allowable under section 80HHC of the Income Tax Act, 1961 ("the Act') under

Asstt. Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2357/MUM/2023[2017-18]Status: DisposedITAT Mumbai06 Feb 2024AY 2017-18

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

erred in not holding that brought forward book losses of Rs. 2,46,41,066 is allowed to be set off against the book profits calculated as per the MAT provisions. 6. The Ld. CIT(A) erred in not holding that interest expenses of Rs. 26,20,481 is incurred ... appeal .no5 that the CIT(A) has erred in not allowing the adjustment of brought forward book loss to be set off against the book profits U/sec115JB of the Act and highlighted on the facts and provisions. Contra, The Ld. DR submitted that these facts submitted were not verified

Assistant Commissioner of Income Tax-6(1)(2), Mumbai vs. Island Star Mall Developers Private Ltd, Mumbai

ITA 2356/MUM/2023[2016-2017]Status: DisposedITAT Mumbai06 Feb 2024AY 2016-2017

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI BR BASKARAN, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL

Asstt. Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2355/MUM/2023[2015-16]Status: DisposedITAT Mumbai06 Feb 2024AY 2015-16

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

erred in not holding that brought forward book losses of Rs. 2,46,41,066 is allowed to be set off against the book profits calculated as per the MAT provisions. 6. The Ld. CIT(A) erred in not holding that interest expenses of Rs. 26,20,481 is incurred ... appeal .no5 that the CIT(A) has erred in not allowing the adjustment of brought forward book loss to be set off against the book profits U/sec115JB of the Act and highlighted on the facts and provisions. Contra, The Ld. DR submitted that these facts submitted were not verified

Asstt Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

ITA 2354/MUM/2023[2014-2015]Status: DisposedITAT Mumbai06 Feb 2024AY 2014-2015

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI BR BASKARAN, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL

Asstt. Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2353/MUM/2023[2013-2014]Status: DisposedITAT Mumbai06 Feb 2024AY 2013-2014

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

erred in not holding that brought forward book losses of Rs. 2,46,41,066 is allowed to be set off against the book profits calculated as per the MAT provisions. 6. The Ld. CIT(A) erred in not holding that interest expenses of Rs. 26,20,481 is incurred ... appeal .no5 that the CIT(A) has erred in not allowing the adjustment of brought forward book loss to be set off against the book profits U/sec115JB of the Act and highlighted on the facts and provisions. Contra, The Ld. DR submitted that these facts submitted were not verified

Assistant Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

ITA 2352/MUM/2023[2012-13]Status: DisposedITAT Mumbai06 Feb 2024AY 2012-13

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI BR BASKARAN, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL

Castmaster Industries Pvt. Ltd., New Delhi vs. ACIT, Circle- 5(2), New Delhi

In the result, this appeal filed by the assessee is partly allowed for

ITA 88/DEL/2018[2014-15]Status: DisposedITAT Delhi06 Feb 2024AY 2014-15

Bench: Shri Shamim Yahya & Ms. Astha Chandracastmaster Industries Pvt. Ltd., Vs. Acit, Circle 5 (2), C-5, Maharani Bagh, New Delhi. New Delhi – 110 065. (Pan : Aaacr2847R) (Appellant) (Respondent)

For Appellant: Ms. Manju Goel, CAFor Respondent: Shri Vivek Kumar Upadhyay, Sr. DR
Section 115JSection 143(3)

adding the amount of addition made while framing of assessment u/s 143(3) of the Income Tax Act to the book profit of the company.” 2 3. In this case, AO in the assessment order made several additions as under :- Gross total income/loss as per computation of income ... relief. However, the assessee has also urged ld. CIT (A) that AO has made adjustment of the additions under income-tax computation of the book profit also and has enhanced the book profit accordingly. The ld. CIT (A)’s order in this regard is as under :- “In Ground

Yes Securities (India) Limited, Mumbai vs. ACIT, Circle 4(2)(2), Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2191/MUM/2023[2017-18]Status: DisposedITAT Mumbai05 Feb 2024AY 2017-18

Bench: Shri Prashant Maharishi & Shri Pavan Kumar Gadaleyessecurities(India)Ltd, Acit-Circle 4(2)(2), Unit No.602, 6Th Floor, Room No.640, बनाम/ Ifc Tower 1 & 2, 6Th Floor, Aayakar Vs. Senapati Bapat Road, Bhavan, M.K.Road, Elphinstone, Mumbai – 400020. Mumbai-400013. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaacy6065C (""थ" / Respondent) (अपीलाथ" /Appellant)

For Appellant: Ms.Krupa Gandhi, CA &For Respondent: Mr.Mirza Azhar.Sr.DR
Section 115JSection 139(1)Section 234CSection 37Section 37(1)Section 43B

confirming the disallowance of the provision for sub brokerage expenses by treating it as unascertained liabilities and thereby adding it back to the book profits u/s 115JB of the Act. 2. The Appellant therefore prays that the AO be directed to delete the disallowance of provisions u/s. 115JB ... basis of quantification, the A.O has disallowed the claim of Rs. 29,59,040/-(v) The last disputed issue, the AO while computing the book profits u/sec 115JB of the Act has made addition of provision of sub brokerage expenses being the unascertained liability of Rs. 5 Yes Securities

Tata Motors Ltd, Mumbai vs. ACIT 2(3), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 631/MUM/2013[2008-09]Status: DisposedITAT Mumbai05 Feb 2024AY 2008-09

Bench: Shri Vikas Awasthy& Shri S.Rifaur Rahmanआअसं.631/मुं/2013 (िन.व. 2008-09) Tata Motors Limited Bombay House, 24,Homi Mody Street, Hutama Chowk, Mumbai – 400001. Pan: Aaact-2727-Q ...... अपीलाथ"/Appellant बनाम Vs. The Addl. Commissioner Of Income Tax Circle -2(3), Mumbai. Aaykar Bhavan, M.K.Road, Mumbai – 400 020 ....."ितवादी/Respondent अपीलाथ" "ारा/ Appellant By : Shri J.D.Mistry, Sr.Advocate With Shri Nikhil Tiwari,Advocate "ितवादी "ारा/Respondent By : Ms. Vatsala Jha, Cit-Dr & Shri Manoj Kumar Singh, Sr.Ar सुनवाई की ितिथ/ Date Of Hearing : 10/11/2023 घोषणा की ितिथ/ Date Of Pronouncement : 05/02/2024 आदेश/Order Per Vikas Awasthy, Jm:

For Appellant: Shri J.D.Mistry, Sr.Advocate with Shri Nikhil Tiwari,AdvocateFor Respondent: Ms. Vatsala Jha, CIT-DR and Shri Manoj Kumar Singh, Sr.AR
Section 116Section 143(3)Section 92C

book profitu/s. 115JB of the Act: 26. The Special Bench in the case of Vireet Investments Pvt. Ltd. (supra) has held that while computing book profits u/s. 115JB of the Act disallowance made u/s.14A r.w.r. 8D shall not be considered. The Hon’ble Karnataka High Court in the case ... Sobha Developers Ltd. vs. DCIT 125 taxmann.com 72 has reiterated that disallowance made u/s. 14A could not be added to book profits of assessee u/s.115JB of the Act. Thus, in view of above decisions assessee succeeds on ground No.5 of appeal. 29 Ground No.6 – Expenditure on issue of FCCN – Rs.22