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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

Kl Envitech Pvt Ltd., Thane vs. ITO Ward-1(3), Thane

In the result, the appeals are allowed

ITA 768/MUM/2023[2014-15]Status: DisposedITAT Mumbai23 Aug 2023AY 2014-15

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 80I

assessee claimed that as it was operating infrastructure facility at port, it would be entitled to claim deduction under section 80-IA and, therefore, book profits were required to be reduced by the profits derived from the aforesaid industrial undertaking in terms of the provisions of clause ... only providing the said cranes to the port on lease basis. He, therefore, did not reduce the deduction under section 80-IA while computing book profit under section 115JA. On appeal, the Commissioner (Appeals) held that the assessee had entered into an agreement with the port under the BOLT scheme

Kl Envitech Pvt Ltd, Thane vs. ITO Ward-1(3), Thane

In the result, the appeals are allowed

ITA 767/MUM/2023[2013-14]Status: DisposedITAT Mumbai23 Aug 2023AY 2013-14

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 80I

assessee claimed that as it was operating infrastructure facility at port, it would be entitled to claim deduction under section 80-IA and, therefore, book profits were required to be reduced by the profits derived from the aforesaid industrial undertaking in terms of the provisions of clause ... only providing the said cranes to the port on lease basis. He, therefore, did not reduce the deduction under section 80-IA while computing book profit under section 115JA. On appeal, the Commissioner (Appeals) held that the assessee had entered into an agreement with the port under the BOLT scheme

Everest Industries Ltd., Noida vs. Dy CIT Circle- 1, Thane

In the result, the appeal of the Revenue is dismissed whereas

ITA 717/MUM/2020[2006-07]Status: DisposedITAT Mumbai21 Aug 2023AY 2006-07

Bench: Shri Om Prakash Kant () & Shri Pavan Kumar Gadale () Assessment Year: 2006-07 Everest Industries Ltd., Dcit, Circle-1, D-206, Sector-63, Noida- Ashar I.T. Park, 6Th Floor, B- Vs. 201301, Uttar Pradesh, India. Wing 16-Z, Wagle Industrial Estate, Thane (W)-400 604. Pan No. Aaace 7550 N Appellant Respondent Assessment Year: 2006-07 Dcit, Circle-1, Everest Industries Ltd., Ashar I.T. Park, 6Th Floor, B- G-1, A-32, Genesis Mohan Vs. Wing 16-Z, Wagle Industrial Coop. Industries, Mathura Estate, Thane (W)-400 604. Road, New Delhi-110044. Pan No. Aaace 7550 N Appellant Respondent

For Appellant: Mr. Yogesh Thar a/w Mr. Chaitanya JoshiFor Respondent: Mr. Alok Kumar, CIT-DR

directing the AO to exclude Sales Tax incentive, w to exclude Sales Tax incentive, while computing the book hile computing the book profits u/s 115]B of the Act, without appreciating that they profits u/s 115]B of the Act, without appreciating that they profits ... exclude Sales Tax incentive, while computing the book exclude Sales Tax incentive, while computing the book exclude Sales Tax incentive, while computing the book profits u/s 115JB of the Act despite the fact that no profits u/s 115JB of the Act despite the fact that no profits u/s 115JB

DCIT, Circle-1, Thane vs. Everest Industries Ltd., Mumbai

In the result, the appeal of the Revenue is dismissed whereas

ITA 1421/MUM/2020[2006-07]Status: DisposedITAT Mumbai21 Aug 2023AY 2006-07

Bench: Shri Om Prakash Kant () & Shri Pavan Kumar Gadale () Assessment Year: 2006-07 Everest Industries Ltd., Dcit, Circle-1, D-206, Sector-63, Noida- Ashar I.T. Park, 6Th Floor, B- Vs. 201301, Uttar Pradesh, India. Wing 16-Z, Wagle Industrial Estate, Thane (W)-400 604. Pan No. Aaace 7550 N Appellant Respondent Assessment Year: 2006-07 Dcit, Circle-1, Everest Industries Ltd., Ashar I.T. Park, 6Th Floor, B- G-1, A-32, Genesis Mohan Vs. Wing 16-Z, Wagle Industrial Coop. Industries, Mathura Estate, Thane (W)-400 604. Road, New Delhi-110044. Pan No. Aaace 7550 N Appellant Respondent

For Appellant: Mr. Yogesh Thar a/w Mr. Chaitanya JoshiFor Respondent: Mr. Alok Kumar, CIT-DR

directing the AO to exclude Sales Tax incentive, w to exclude Sales Tax incentive, while computing the book hile computing the book profits u/s 115]B of the Act, without appreciating that they profits u/s 115]B of the Act, without appreciating that they profits ... exclude Sales Tax incentive, while computing the book exclude Sales Tax incentive, while computing the book exclude Sales Tax incentive, while computing the book profits u/s 115JB of the Act despite the fact that no profits u/s 115JB of the Act despite the fact that no profits u/s 115JB

Sicpa India P.Ltd, New Delhi vs. ACIT, Circle-23(2), New Delhi

In the result, the Ground No

ITA 9604/DEL/2019[2008-09]Status: DisposedITAT Delhi18 Aug 2023AY 2008-09

Bench: SHRI SHAMIM YAHYA (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)

Section 115JSection 143(3)Section 14ASection 80Section 80GSection 80I

action of the Ld. AO in not allowing deduction for ‘Fringe Benefit Tax’ amounting to INR 8000,000/- for the purpose of computing book profits under section 115JB of the Act. 6. The Appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal ... declaring income of Rs.17,65,38,023/- under normal provisions of the Act and Page 2 of 13 SICPA India Pvt. Ltd. vs. ACIT book profit u/s 115JB of Rs.56,41,92,385/-. The case was selected for scrutiny and assessment order came to be passed

DCIT 2(1), Mumbai vs. Chennai Continer Terminal P.Ltd, Mumbai

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

ITA 894/MUM/2013[2009-10]Status: DisposedITAT Mumbai11 Aug 2023AY 2009-10

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms. Kavitha Rajagopal, Hon’Ble

Section 115JSection 143(1)Section 143(2)Section 143(3)Section 80Section 92C

that capital receipt in the form of duty credit entitlement though incorrectly credited to the Profit & Loss A/c, shall not be considered while computing book profits under Section 115JB of the Act since it is a capital receipt. 13. Should have appreciated that as per Accounting Standard-10, the duty ... reduced from the cost of assets and therefore to that extent, the amount of duty credit should have been reduced while computing the books profits as per section 115JB of the Act The Appellant craves to consider each of the above grounds of appeal without prejudice to each other

DCIT 2(1), Mumbai vs. Chennai Continer Terminal P.Ltd, Mumbai

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

ITA 893/MUM/2013[2008-09]Status: DisposedITAT Mumbai11 Aug 2023AY 2008-09

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms. Kavitha Rajagopal, Hon’Ble

Section 115JSection 143(1)Section 143(2)Section 143(3)Section 80Section 92C

that capital receipt in the form of duty credit entitlement though incorrectly credited to the Profit & Loss A/c, shall not be considered while computing book profits under Section 115JB of the Act since it is a capital receipt. 13. Should have appreciated that as per Accounting Standard-10, the duty ... reduced from the cost of assets and therefore to that extent, the amount of duty credit should have been reduced while computing the books profits as per section 115JB of the Act The Appellant craves to consider each of the above grounds of appeal without prejudice to each other

Chennai Container Terminal P. Ltd, Mumbai vs. ACIT 2(1), Mumbai

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

ITA 1119/MUM/2013[2009-10]Status: DisposedITAT Mumbai11 Aug 2023AY 2009-10

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms. Kavitha Rajagopal, Hon’Ble

Section 115JSection 143(1)Section 143(2)Section 143(3)Section 80Section 92C

that capital receipt in the form of duty credit entitlement though incorrectly credited to the Profit & Loss A/c, shall not be considered while computing book profits under Section 115JB of the Act since it is a capital receipt. 13. Should have appreciated that as per Accounting Standard-10, the duty ... reduced from the cost of assets and therefore to that extent, the amount of duty credit should have been reduced while computing the books profits as per section 115JB of the Act The Appellant craves to consider each of the above grounds of appeal without prejudice to each other

Chennai Container Terminal P. Ltd, Mumbai vs. DCIT 2(1), Mumbai

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

ITA 1118/MUM/2013[2008-09]Status: DisposedITAT Mumbai11 Aug 2023AY 2008-09

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms. Kavitha Rajagopal, Hon’Ble

Section 115JSection 143(1)Section 143(2)Section 143(3)Section 80Section 92C

that capital receipt in the form of duty credit entitlement though incorrectly credited to the Profit & Loss A/c, shall not be considered while computing book profits under Section 115JB of the Act since it is a capital receipt. 13. Should have appreciated that as per Accounting Standard-10, the duty ... reduced from the cost of assets and therefore to that extent, the amount of duty credit should have been reduced while computing the books profits as per section 115JB of the Act The Appellant craves to consider each of the above grounds of appeal without prejudice to each other

M/S Avendus Capital Private Limited, Mumbai vs. Assistant Commissioner of Income Tax Central Circle-2(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 1739/MUM/2023[2017-2018]Status: DisposedITAT Mumbai10 Aug 2023AY 2017-2018

Bench: Shri Aby T Varkey & Shri Amarjit Singh

For Appellant: Ashish Mehta & Sahil ShethFor Respondent: Manoj Kumar Sinha
Section 115JSection 142(1)Section 143(2)Section 14ASection 234CSection 37Section 37(1)

erred in confirming the action of the Ld. AO in making disallowance of INR 89,63,694/- in the ‘book profits’ under section 115JB of the IT Act by invoking provisions of section 14A of the IT Act read with Rule 8D of the IT Rules. 4. On the facts ... supra we delete the addition made by the assessing officer u/s 14A of the Act. Ground No. 3: Adding disallowance u/s 14A in computing book profit u/s 115JB of the Act: 8. During the course of assessment the assessing officer has added the amount of disallowance made

M/S Avendus Capital Private Limited, Mumbai vs. Assistant Commissioner of Income Tax Central Circle-2(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 1738/MUM/2023[2016-2017]Status: DisposedITAT Mumbai10 Aug 2023AY 2016-2017

Bench: Shri Aby T Varkey & Shri Amarjit Singh

For Appellant: Ashish Mehta & Sahil ShethFor Respondent: Manoj Kumar Sinha
Section 115JSection 142(1)Section 143(2)Section 14ASection 234CSection 37Section 37(1)

erred in confirming the action of the Ld. AO in making disallowance of INR 89,63,694/- in the ‘book profits’ under section 115JB of the IT Act by invoking provisions of section 14A of the IT Act read with Rule 8D of the IT Rules. 4. On the facts ... supra we delete the addition made by the assessing officer u/s 14A of the Act. Ground No. 3: Adding disallowance u/s 14A in computing book profit u/s 115JB of the Act: 8. During the course of assessment the assessing officer has added the amount of disallowance made

M/S. Bharat Cera Glass Limited, Bhilwara vs. ITO, Ward-3, Bhilwara

In the result, both the grounds of appeal raised by the assessee are dismissed

ITA 411/JODH/2017[2013-14]Status: DisposedITAT Jodhpur10 Aug 2023AY 2013-14

Bench: Shri Pavan Kumar Gadale & Dr. Dipak P. Ripoteassessment Year : 2013-14 M/S Bharat Cera Glass Limited, Income Tax Officer, 1-B-24, Shashtri Nagar, Vs Ward-3, Bhilwara Bhilwara Pan: Aaecb4366K Appellant / Assessee Respondent / Revenue

Section 143(3)Section 56(2)(viib)

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

ACIT, Circle-18(2), Noida vs. Noida Toll Bridge Co. Ltd., Noida

In the result, appeal of the assessee is allowed

ITA 4973/DEL/2018[2009-10]Status: DisposedITAT Delhi08 Aug 2023AY 2009-10

Bench: Shri N.K. Billaiya & Ms. Astha Chandra

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri G.C. Srivastava, Adv
Section 143(3)Section 147Section 148

question of law: "Whether the Income Tax Appellate Tribunal was correct in law in allowing depreciation of Rs 16,47,417/- in computation of book profits under Section 115J, even though it was not debited in the profit and loss account, although mentioned in the notes to the account

ACIT, Circle-18(2), Noida vs. Noida Toll Bridge Co. Ltd., Noida

In the result, appeal of the assessee is allowed

ITA 4972/DEL/2018[2011-12]Status: DisposedITAT Delhi08 Aug 2023AY 2011-12

Bench: Shri N.K. Billaiya & Ms. Astha Chandra

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri G.C. Srivastava, Adv
Section 143(3)Section 147Section 148

question of law: "Whether the Income Tax Appellate Tribunal was correct in law in allowing depreciation of Rs 16,47,417/- in computation of book profits under Section 115J, even though it was not debited in the profit and loss account, although mentioned in the notes to the account

ACIT, Circle-18(2), Noida vs. Noida Toll Bridge Co. Ltd., Noida

In the result, appeal of the assessee is allowed

ITA 4971/DEL/2018[2010-11]Status: DisposedITAT Delhi08 Aug 2023AY 2010-11

Bench: Shri N.K. Billaiya & Ms. Astha Chandra

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri G.C. Srivastava, Adv
Section 143(3)Section 147Section 148

question of law: "Whether the Income Tax Appellate Tribunal was correct in law in allowing depreciation of Rs 16,47,417/- in computation of book profits under Section 115J, even though it was not debited in the profit and loss account, although mentioned in the notes to the account

ACIT, Circle-18(2), Noida vs. Noida Toll Bridge Co. Ltd., Noida

In the result, appeal of the assessee is allowed

ITA 4970/DEL/2018[2008-09]Status: DisposedITAT Delhi08 Aug 2023AY 2008-09

Bench: Shri N.K. Billaiya & Ms. Astha Chandra

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri G.C. Srivastava, Adv
Section 143(3)Section 147Section 148

question of law: "Whether the Income Tax Appellate Tribunal was correct in law in allowing depreciation of Rs 16,47,417/- in computation of book profits under Section 115J, even though it was not debited in the profit and loss account, although mentioned in the notes to the account

ACIT, Circle-18(2), Noida vs. Noida Toll Bridge Co. Ltd., Noida

In the result, appeal of the assessee is allowed

ITA 4969/DEL/2018[2007-08]Status: DisposedITAT Delhi08 Aug 2023AY 2007-08

Bench: Shri N.K. Billaiya & Ms. Astha Chandra

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri G.C. Srivastava, Adv
Section 143(3)Section 147Section 148

question of law: "Whether the Income Tax Appellate Tribunal was correct in law in allowing depreciation of Rs 16,47,417/- in computation of book profits under Section 115J, even though it was not debited in the profit and loss account, although mentioned in the notes to the account

ACIT, Circle-18(2), Noida vs. Noida Toll Bridge Co. Ltd., Noida

In the result, appeal of the assessee is allowed

ITA 4968/DEL/2018[2006-07]Status: DisposedITAT Delhi08 Aug 2023AY 2006-07

Bench: Shri N.K. Billaiya & Ms. Astha Chandra

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri G.C. Srivastava, Adv
Section 143(3)Section 147Section 148

question of law: "Whether the Income Tax Appellate Tribunal was correct in law in allowing depreciation of Rs 16,47,417/- in computation of book profits under Section 115J, even though it was not debited in the profit and loss account, although mentioned in the notes to the account

Shree Cement Limited, Beawar vs. Deputy Commissioner of Income Tax, Ajmer

In the result, this appeal of the assessee is partly allowed and appeal of the Revenue is dismissed

ITA 152/JPR/2023[2014-15]Status: DisposedITAT Jaipur07 Aug 2023AY 2014-15

Bench: HON’BLE SHRI SANDEEP GOSAIN, JM & HON’BLE SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Vijay Shah, CAFor Respondent: Shri Arvind Kumar, CIT
Section 115JSection 250Section 32(1)(ii)Section 80Section 80I

sale of investments of Rs. 83,31,72,239/- and profit on sale of fixed assets of Rs. 44,93,014/- while computing book profit u/s 115JB of the Act. 4. That on the facts and in the circumstances of the case, the ld. CIT (Appeals) was not justified ... erred in rejecting the claim of deduction u/s 80IA and 80IC while computing book profit u/s 115JB of the Act merely on the contention that such claim has not been made vide the return of income. 5. That on the facts and in the circumstances of the case, necessary direction

DCIT Central Circle-2(4), Mumbai vs. Rustomjee Evershine Joint Venture, Mumbai

In the result, the appeals filed by the revenue for AY 2013-14 &

ITA 1825/MUM/2022[2014-15]Status: DisposedITAT Mumbai31 Jul 2023AY 2014-15

Bench: Shri Aby T. Varkey, Jm & Shri S. Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.1349/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2013-14) Dcit, Central Circle-2(4) बिधम/ Rustomjee Evershine Room No. 802, 8Th Floor, Joint Venture Vs. Prathishtha Bhavan, M. K. Global City, Narangi Road, Churchgate, Mumbai- Bypass Road, Close To 400020. Viva College, Virar (W), Virar-401303. Cross Objection No. 27/Mum/2023 Arising Out Of I.T.A. No.1349/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2013-14) Rustomjee Evershine Joint बिधम/ Dcit, Central Circle-2(4) Room No. 802, 8Th Floor, Venture Vs. Global City, Narangi Prathishtha Bhavan, M. K. Bypass Road, Close To Viva Road, Churchgate, College, Virar (W), Virar- Mumbai-400020. 401303. आयकर अपील सं/ I.T.A. Nos.1824 & 1825/Mum/2022 (निर्धारण वर्ा / Assessment Years: 2016-17 & 2014-15) Dcit, Central Circle-2(4) बिधम/ Rustomjee Evershine Room No. 802, 8Th Floor, Joint Venture Vs. Prathishtha Bhavan, M. K. Global City, Narangi Road, Churchgate, Mumbai- Bypass Road, Close To 400020. Viva College, Virar (W), Virar-401303. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaaar7687M (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Naresh Kumar Revenue By: Shri P. D. Chougule (Addl. Cit) सुनवाई की तारीख / Date Of Hearing: 25/05/2023 घोषणा की तारीख /Date Of Pronouncement: 31/07/2023

For Appellant: Shri Naresh KumarFor Respondent: Shri P. D. Chougule (Addl. CIT)

case and in law, the Ld. CIT (A) erred in deleting the disallowance u/s 14A of the IT Act while computing the book profits u/s 115JB of the IT Act without realizing the fact, that clause (f) of explanation (1) to section 115JB requires such adjustment to be made