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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

M/S.Mgn Agro Properties Pvt.Ltd., Mumbai vs. Pr.CIT(Central), Mumbai-2, Mumbai

ITA 746/MUM/2021[2008-09]Status: DisposedITAT Mumbai08 Sept 2022AY 2008-09

Bench: Shri M. Balaganesh & Shri Kuldip Singhassessment Year: 2008-09

For Appellant: Shri Vartik Choksi, A.RFor Respondent: Ms. Mamta Bansal, D.R
Section 115JSection 143(3)Section 254Section 263

read with section 254 of the Act on 26.04.2017 at the total income under normal provisions at loss of Rs.2,31,025/- and book profit under section 115JB of the Act at the loss of Rs.1,67,64,201/-. 3. The Ld. PCIT while invoking the provisions contained under section ... Rs.864/- per share as adopted in the valuation report in view of the scheme of amalgamation approved by the High Court. The book profit computed by adopting this value, therefore is not in compliance to the High Court order. The relevant transactions are summarised in AS-14 as under: Purchase

DCIT -CC-5(2), Mumbai vs. M/S. Usv Pvt. Ltd, Mumbai

Accordingly, respectfully following the above decisions of the Tribunal we refrain to interfere with the order passed by the CIT(A) on this issue. Ground No. 8 raised by the Revenue is, therefore, ...

ITA 2575/MUM/2021[2014-15]Status: DisposedITAT Mumbai07 Sept 2022AY 2014-15
For Appellant: Shri Paras Savla and Shri Pratik PodarFor Respondent: Shri Achal Sharma
Section 143(3)Section 253(3)Section 35Section 40

income for Assessment Year 2014-15 on 24.11.2014 declaring total income of INR 181,23,43,120/- under the normal provisions of Act and book profits of INR 544,78,26,802/- under Section 115JB of the Act. The case of the Assessee was selected for scrutiny. Assessment was framed

Suchetan Commercial & Marketing Pvt. Ltd., Mumbai vs. ITO 2 (3)(2), Mumbai

In the result, the appeal of the assessee in ITA No

ITA 6575/MUM/2019[2013-14]Status: DisposedITAT Mumbai07 Sept 2022AY 2013-14
Section 115JSection 143(3)Section 56(1)

declaring total income of Rs Nil after setting off the loss of the brought forward losses under normal provisions of the Act and declaring book profits of Rs 3,02,64,526/- u/s 115JB of the Act. We find from the perusal of the audited balance sheet and profit

Suchetan Commercial & Marketing Pvt. Ltd., Mumbai vs. ITO 2 (3)(2), Mumbai

In the result, the appeal of the assessee in ITA No

ITA 6574/MUM/2019[2012-13]Status: DisposedITAT Mumbai07 Sept 2022AY 2012-13
Section 115JSection 143(3)Section 56(1)

declaring total income of Rs Nil after setting off the loss of the brought forward losses under normal provisions of the Act and declaring book profits of Rs 3,02,64,526/- u/s 115JB of the Act. We find from the perusal of the audited balance sheet and profit

Deputy Commissioner of Income Tax - Central Circle-1(3), Bangalore vs. M/S. Manyata Promoters Private Limited (Erstwhile Embassy Office Parks Private Limited ), Bangalore

In the result, the assessee’s appeal is allowed for statistical purposes, while the revenue’s appeal is dismissed

ITA 573/BANG/2022[2017-18]Status: DisposedITAT Bangalore06 Sept 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2017-18

For Appellant: Shri Ajay Rotti, CAFor Respondent: Shri V S Chakrapani, CIT(DR)
Section 115JSection 143(2)Section 14ASection 154Section 232

later filed a revised return on 30.03.2018 declaring total income of NIL under normal provisions of the Income Tax Act (the Act) and a book profits of Rs.26,04,02,080 u/s. 115JB of the Act. 3. The case was selected for scrutiny and notice ... 573/Bang/2022 Page 3 of 10 Subsequently the AO passed an order u/s. 154 dated 26.7.2021 in which he made an adjustment to the book profits u/s.115JB for the amount disallowed u/s. 14A considering the same as a mistake apparent from the record. In the said rectification order

M/S. Manyata Promoters Private Limited (Erstwhile Embassy Office Parks Private Limited Since Merged With Manyata Promoters Private Limited), Bangalore vs. Joint Commissioner of Income Tax (OSD)- Central Circle-1(3), Bangalore

In the result, the assessee’s appeal is allowed for statistical purposes, while the revenue’s appeal is dismissed

ITA 548/BANG/2022[2017-18]Status: DisposedITAT Bangalore06 Sept 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2017-18

For Appellant: Shri Ajay Rotti, CAFor Respondent: Shri V S Chakrapani, CIT(DR)
Section 115JSection 143(2)Section 14ASection 154Section 232

later filed a revised return on 30.03.2018 declaring total income of NIL under normal provisions of the Income Tax Act (the Act) and a book profits of Rs.26,04,02,080 u/s. 115JB of the Act. 3. The case was selected for scrutiny and notice ... 573/Bang/2022 Page 3 of 10 Subsequently the AO passed an order u/s. 154 dated 26.7.2021 in which he made an adjustment to the book profits u/s.115JB for the amount disallowed u/s. 14A considering the same as a mistake apparent from the record. In the said rectification order

Joint Commissioner of Income Tax - Central Circle 1(4), Mumbai vs. Essel Mining & Industries Limited, Mumbai

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

ITA 1552/MUM/2018[2008-09]Status: DisposedITAT Mumbai05 Sept 2022AY 2008-09

Bench: Us:-

Section 143(3)Section 153C

29/03/2015 for the A.Y.2008-09 by determining the total income at Rs.1272,13,23,945/- under normal provisions of the Act and book profits of Rs.1238,23,41,899/- u/s.115JB of the Act. Under normal provisions of the Act, the following disallowances / additions were made:- i) Disallowance u/s.147 ... without making any additions or disallowances thereon, both under ormal provisions of the Act as well as in the computation of book profits u/s 115JB of the Act. We categorically hold that no additions / disallowance could be made in the search assessment u/s.153C of the Act for A.Y.2008-09 in view

Essel Mining & Industries Limited, Mumbai vs. Deputy Commissioner of Income Tax - Central Circle 1(4), Mumbai

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

ITA 1017/MUM/2018[2008-09]Status: DisposedITAT Mumbai05 Sept 2022AY 2008-09

Bench: Us:-

Section 143(3)Section 153C

29/03/2015 for the A.Y.2008-09 by determining the total income at Rs.1272,13,23,945/- under normal provisions of the Act and book profits of Rs.1238,23,41,899/- u/s.115JB of the Act. Under normal provisions of the Act, the following disallowances / additions were made:- i) Disallowance u/s.147 ... without making any additions or disallowances thereon, both under ormal provisions of the Act as well as in the computation of book profits u/s 115JB of the Act. We categorically hold that no additions / disallowance could be made in the search assessment u/s.153C of the Act for A.Y.2008-09 in view

Unimark Remedies Ltd, Mumbai vs. ACIT 11(1)(2), Mumbai

In the result, appeal of the learned Assessing Officer and Cross Objection of the assessee, are partly allowed

ITA 5868/MUM/2017[2011-12]Status: DisposedITAT Mumbai29 Aug 2022AY 2011-12

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Co No. 320/Mum/2018 (Arising In Ita No.3716/Mum/2017 For A.Y. 2010-11)

For Appellant: Shri Prateek Jain, ARFor Respondent: Shri Samuel Pitta, DR
Section 115JSection 14ASection 92C

action of the Ld. AO in adding the disallowance u/s 14A r.w Rule 8D amounting to Rs. 67,32,421/-in computing the book profits u/s 115JB of the IT Act,1961 on the grounds stated in the impugned order or otherwise.” 05. The brief facts of the case shows

DCIT 11(1)(2), Mumbai vs. Unimark Remedies Ltd, Mumbai

In the result, appeal of the learned Assessing Officer and Cross Objection of the assessee, are partly allowed

ITA 3716/MUM/2017[2010-11]Status: DisposedITAT Mumbai29 Aug 2022AY 2010-11

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Co No. 320/Mum/2018 (Arising In Ita No.3716/Mum/2017 For A.Y. 2010-11)

For Appellant: Shri Prateek Jain, ARFor Respondent: Shri Samuel Pitta, DR
Section 115JSection 14ASection 92C

action of the Ld. AO in adding the disallowance u/s 14A r.w Rule 8D amounting to Rs. 67,32,421/-in computing the book profits u/s 115JB of the IT Act,1961 on the grounds stated in the impugned order or otherwise.” 05. The brief facts of the case shows

Gmr Pochanpalli Expressways Limited, Bengaluru vs. Principal Commissioner of Income Tax, Bengaluru

In the result, appeal of the assessee is allowed

ITA 363/BANG/2022[2017-18]Status: DisposedITAT Bangalore29 Aug 2022AY 2017-18

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year : 2017-18 M/S. Gmr Pochanpalli Expressways Ltd., The Principal No. 25/1, Skip House, Commissioner Of Museum Road, Income Tax, Bengaluru – 560 025. Bengaluru – 3. Vs. Pan: Aaccg4570C Appellant Respondent Assessee By : Shri Sunil Jain, Ca : Shri Sumer Singh Meena, Cit Revenue By Dr-1 Date Of Hearing : 11-08-2022 Date Of Pronouncement : 29-08-2022 Order Per Beena Pillaipresent Appeal Is Filed By The Assessee Against Order Dated 31/03/2022 By The Ld.Pr.Cit, Bangalore – 3 For A.Y. 2017-18 On Following Grounds Of Appeal:

For Appellant: Shri Sunil Jain, CA
Section 143(1)Section 143(2)Section 263

case of Deccan Paper Mills Co. Ltd. (supra) Hon’ble Pune Bench of the Tribunal held, that: "40. Now, coming to the aspect of book profits which was considered by the Commissioner and the order of the Assessing Officer was held to be erroneous and prejudicial to the interest ... other than the aspect for which it is picked up. Hence, the Assessing Officer has not formed any opinion in respect of computation of book profits in the hands of assessee. Once, no such opinion has been formed by the Assessing Officer, the Commissioner has erred in holding the order

ACIT Circle-16(1), Mumbai vs. M/S Asianet News Networks Pvt Ltd., Mumbai

In the result, the appeal is allowed

ITA 6277/MUM/2019[2014-15]Status: DisposedITAT Mumbai26 Aug 2022AY 2014-15
Section 115JSection 271Section 271(1)(c)

imposed relates to the addition/disallowance made with reference to the total income determined under normal provisions of the Income Tax Act but not Book Profit computed under deeming provisions of section 115JB ? ii) Whether on the facts and circumstances of the case ... that, in the instant case, the tax is charged on total income determined under normal provisions of the Income Tax Act but not on Book Profit computed under deeming provisions of section 115JB ? iii) Whether on the facts, in the circumstances of the case and as per law, the Ld.CIT

Hindustan Construction Company, Mumbai vs. Pr. CIT-6, Mumbai

Appeal is allowed

ITA 969/MUM/2021[2011-12]Status: DisposedITAT Mumbai25 Aug 2022AY 2011-12
For Appellant: Shri H. P. MahajaniFor Respondent: Shri Mehul Jain
Section 115JSection 143(3)Section 147Section 263Section 263(2)

taking a view that a sum of Rs. 8,42,46,581 being share of loss from partnership was required to be added to book profits for the purposes of s 115JB of the Income Tax Act 1961. 4. Without prejudice to the above, on the facts ... erred in taking a view that a sum of Rs. 4,04,96,607/- being Dispute claims realized was required to be added to book profits for the purposes of s 115JB of the Income Tax Act 1961. 5. The order passed by the learned CIT merits being annulled

Hindustan Construction Company, Mumbai vs. Pr. CIT-6, Mumbai

Appeal is dismissed

ITA 968/MUM/2021[2015-16]Status: DisposedITAT Mumbai25 Aug 2022AY 2015-16

Bench: Him When Factually The Representative Of The Appellant Had Appeared & Also Made Written Submissions.

For Appellant: Shri H. P. MahajaniFor Respondent: Shri Mehul Jain
Section 115JSection 143(3)Section 263

erred in taking a view that a sum of Rs. 70.66 crores was not available to it as unabsorbed book loss and hence the book profits computed by the AO for the purposes of s 115JB of the Income tax Act 1961 were erroneous to that extent ... Assessment Year 2015-16 on 28.11.2015 declaring loss of INR 6,91,39,49,100/- under the normal provisions of the Act and Book Profit of INR 62,56,35,749/- under the provision of Section 115JB of the Act. 4. The case of the Appellant was selected for scrutiny

Edelweiss Financail Services Ltd, Mumbai vs. Dy CIT CC-1(1), Mumbai

In the result, appeal of the assessee for A

ITA 1328/MUM/2021[2014-15]Status: DisposedITAT Mumbai25 Aug 2022AY 2014-15
Section 10Section 115JSection 143(3)Section 14ASection 14A(2)Section 90

assessee had filed its return for A.Y.2014-15 on 29/11/2014 declaring total income at Rs.18,41,61,150/- under normal provisions of the Act and book profit of Rs.53,02,93,945/- u/s.115JB of the Act. Subsequently, a revised return of income was filed by the assessee on 30/03/2016 to claim ... Rs.5,55,969/- under normal provisions of the Act. 2.6. With regard to disallowance of expenses u/s.14A of the Act while computing book profits u/s.115JB of the Act, we find that the ld. AO had made same disallowance as was made by him under normal provisions of the Act, again

Edelweiss Financial Services Ltd., Mumbai vs. Dy CIT CC-1(1), Mumbai

In the result, appeal of the assessee for A

ITA 1283/MUM/2021[2012-13]Status: DisposedITAT Mumbai25 Aug 2022AY 2012-13
Section 10Section 115JSection 143(3)Section 14ASection 14A(2)Section 90

assessee had filed its return for A.Y.2014-15 on 29/11/2014 declaring total income at Rs.18,41,61,150/- under normal provisions of the Act and book profit of Rs.53,02,93,945/- u/s.115JB of the Act. Subsequently, a revised return of income was filed by the assessee on 30/03/2016 to claim ... Rs.5,55,969/- under normal provisions of the Act. 2.6. With regard to disallowance of expenses u/s.14A of the Act while computing book profits u/s.115JB of the Act, we find that the ld. AO had made same disallowance as was made by him under normal provisions of the Act, again

Edelweiss Finanacial Services Ltd., Mumbai vs. Dy CIT -CC-1(1), Mumbai

In the result, appeal of the assessee for A

ITA 1197/MUM/2021[2013-14]Status: DisposedITAT Mumbai25 Aug 2022AY 2013-14
Section 10Section 115JSection 143(3)Section 14ASection 14A(2)Section 90

assessee had filed its return for A.Y.2014-15 on 29/11/2014 declaring total income at Rs.18,41,61,150/- under normal provisions of the Act and book profit of Rs.53,02,93,945/- u/s.115JB of the Act. Subsequently, a revised return of income was filed by the assessee on 30/03/2016 to claim ... Rs.5,55,969/- under normal provisions of the Act. 2.6. With regard to disallowance of expenses u/s.14A of the Act while computing book profits u/s.115JB of the Act, we find that the ld. AO had made same disallowance as was made by him under normal provisions of the Act, again

ACIT Circle-16 (1), Mumbai vs. M/S Asianet News Network Pvt Ltd., Mumbai

ITA 6062/MUM/2019[2015-16]Status: DisposedITAT Mumbai25 Aug 2022AY 2015-16

Bench: Shri Kuldip Singh & Shri Om Prakash Kantassessment Year: 2015-16

For Appellant: Ms. Sheetal Borkar, A.RFor Respondent: Shri Manoj Sinha, D.R
Section 115JSection 143(3)Section 271Section 271(1)(C)Section 271(1)(c)

penalty levied u/s.271(l)(c) ignoring the fact that the issue on which penalty was imposed relates to the addition/disallowance made with reference to Book Profit under deeming provisions of section 115JB and not with reference to the total income determined under normal provisions of the Income ... under section 143(3) of the Income Tax Act, 1961 (for short ‘the Act’) determining the total income at nil under normal provisions and book profit at Rs.10,66,56,587/- under section 115JB of the Act by making addition of Rs.1.75 crores and Rs.4,08,10,740/- on account

M/S Praxair India Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Ltpu Circle-1, Bangalore

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

ITA 2839/BANG/2017[2013-14]Status: DisposedITAT Bangalore25 Aug 2022AY 2013-14
For Appellant: Sri.T.Suryanarayana, Senior AdvocateFor Respondent: Sri.Bijoy Kumar Panda, CIT-DR
Section 143(2)Section 143(3)Section 14ASection 37

No.2839/Bang/2017. M/s.Praxair India Private Limited. Grounds 22 & 23 (Disallowance u/s 14A of the I.T.Act in computation of total income under regular provisions and book profits) 23. The grounds in respect of disallowance u/s 14A of the I.T.Act, reads as follows:- “22.1. The learned AO erred in disallowing expenditure amounting ... borrowed funds for investment purpose. 23. Addition of Rs.5,99,10,687 as per clause (f) of section 115JB of the Act for computing book profits: 23.1 The learned AO has erred in adding Rs.5,99,10,687 as per clause (f) of section 115JB for computing the book profit

M/S Information Technology Park Limited, Bangalore vs. Income Tax Officer Ward-11(2), Bangalore

ITA 1358/BANG/2018[2010-11]Status: DisposedITAT Bangalore24 Aug 2022AY 2010-11

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Rajesh Kumar Jha, CIT(DR)(ITAT), Bengaluru
Section 143(1)Section 143(2)Section 143(3)Section 2(22)

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 applicable thereto; (v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities; (vi) any amount representing contingent