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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

Jindal Steel & Power Limited vs. Addl. CIT

In the result, the appeal filed by the Revenue for the Assessment Year 2008-09 is dismissed

ITA 167/DEL/2009[2003-04]Status: DisposedITAT Delhi01 Dec 2021AY 2003-04

Bench: Shri Amit Shukla & Dr. B.R.R. Kumar(Through Video Conferencing)

For Appellant: Shri Salil Kapoor, AdvocateFor Respondent: Date of Hearing
Section 115JSection 143(3)Section 234BSection 80H

allow deduction of Rs. 34,90,377, instead of Rs. 17,45,188 as claimed in the original return of income, while computing ‘book profits’ in terms of clause (iv) of Explanation 1 to section 115JB of the Act. 1. That on the facts and circumstances of the case ... terms of clause (iv) of Explanation 1 to section 115JB of the Act to the extent specified in section 80HHC even while computing ‘book profits’ 1.1 That the assessing officer failed to appreciate that the entire export profits are allowable as deduction while computing ‘book profits’ under section 115JB

DCIT, New Delhi vs. M/S. Uflex Ltd., New Delhi

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

ITA 1855/DEL/2015[2010-11]Status: DisposedITAT Delhi30 Nov 2021AY 2010-11

Bench: Shri Amit Shukla & Dr. B.R.R. Kumar(Through Video Conferencing)

For Appellant: Shri M. P. RastogiFor Respondent: Shri S. Najmi [CIT] – D. R
Section 115JSection 14ASection 80I

Regarding issue raised vide Ground No. 7, that the aforesaid subsidy being capital in nature it will also not form part of the book profit u/s 115JB. Before us the Ld. Counsel for the assessee submitted that the CENVAT credit as received by the appellant under the incentive scheme ... learned counsel further stated that the provision of Section 115-JB of the Act is alternative mechanism for computation of income based on book profit without claiming any deduction or incentive allowable under the Act, but the fact remains that taxability has to be restricted to the income and once

Uflex Ltd., New Delhi vs. ACIT, New Delhi

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

ITA 1329/DEL/2015[2010-11]Status: DisposedITAT Delhi30 Nov 2021AY 2010-11

Bench: Shri Amit Shukla & Dr. B.R.R. Kumar(Through Video Conferencing)

For Appellant: Shri M. P. RastogiFor Respondent: Shri S. Najmi [CIT] – D. R
Section 115JSection 14ASection 80I

Regarding issue raised vide Ground No. 7, that the aforesaid subsidy being capital in nature it will also not form part of the book profit u/s 115JB. Before us the Ld. Counsel for the assessee submitted that the CENVAT credit as received by the appellant under the incentive scheme ... learned counsel further stated that the provision of Section 115-JB of the Act is alternative mechanism for computation of income based on book profit without claiming any deduction or incentive allowable under the Act, but the fact remains that taxability has to be restricted to the income and once

DCIT, Circle- 3(2), New Delhi vs. Attire Designers Pvt. Ltd., New Delhi

In the result, appeal of the Revenue is dismissed

ITA 5224/DEL/2017[2014-15]Status: DisposedITAT Delhi29 Nov 2021AY 2014-15

Bench: Sh. Anil Chaturvedi & Sh. Kuldip Singh(Through Video Conferencing) Dcit Vs. M/S. Attire Designers Pvt. Circle – 3(2), Ltd., New Delhi 886A/46, Ward No.6, Mehrauli, New Delhi Pan No. Aakcs 7367 K (Appellant) (Respondent) Assessee By Shri Akshat Jain, Adv. Revenue By Shri Satpal Gulati, Cit-D.R. Date Of Hearing: 17.11.2021 Date Of Pronouncement: 29.11.2021 Order Per Anil Chaturvedi, Am: This Appeal Filed By The Revenue Is Directed Against The Order Dated 08.05.2017 Of The Commissioner Of Income Tax (Appeals) – I, New Delhi Relating To Assessment Year 2014-15. 2. The Relevant Facts As Culled From The Material On Records Are As Under :

Section 133(6)Section 143(3)Section 37(1)Section 4Section 68

return of income for A.Y. 2014-15 on 19.11.2014 declaring income of Rs.4,04,35,560/- under the normal provision of tax and book profits of Rs.4,01,64,390/- under MAT. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide

Shree Balkrishna Commercial Co. Ltd., New Delhi vs. PCIT-I, Kolkata

In the result, the appeal of the assessee is allowed

ITA 1168/KOL/2017[2012-13]Status: DisposedITAT Delhi25 Nov 2021AY 2012-13

Bench: Shri O. P. Kant & Ms. Suchitra Kambleasstt. Year 2012-13

For Appellant: Shri Subhash Singhal, CAFor Respondent: Shri Sujeet Kumar, CIT, DR
Section 115Section 143(3)Section 194CSection 263

there is no loss of revenue in this case. The asst, ultimately was made applying provisions of sec 115 JB on fixed percentage of book profits. Even after directions u/s 263, the net income is going to be computed u/s 115 JB at same figure. Thus action

Trl Riceland Pvt. Ltd., (Formerly Known As M/S Tilda Riceland P.Ltd.), New Delhi vs. Addl.CIT, Special Range- 9, New Delhi

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

ITA 7366/DEL/2018[2014-15]Status: DisposedITAT Delhi17 Nov 2021AY 2014-15

Bench: Shri O.P. Kant & Shri. K. N. Chary[Through Video Conferencing] Assessment Year: 2014-15

Section 1Section 115JSection 271

external commercial borrowings as operating in nature for AY 2014-15. 8. Ld. AO erred in making addition of INR 97,57,951/- to book profits of Appellant for the purposes of Section1 115JB of the Act and thereby assessing book profits of Appellant ... without appreciating that book profits of a company cannot be adjusted except as provided Explanation 1 of Section 115JB (2) and transfer pricing adjustment is not one of the classes of adjustments provided in such explanation. 9. Ld. AO has erred by alleging that the Appellant has furnished inaccurate particulars

Bharti Infratel Ltd., New Delhi vs. DCIT, Circle- 2(1), New Delhi

In the result appeal of assessee is allowed

ITA 425/DEL/2018[2011-12]Status: DisposedITAT Delhi15 Nov 2021AY 2011-12

Bench: Shri Amit Shukla & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Rohit Jain, Advocate; &For Respondent: Shri Satpal Gulati [CIT] – DR
Section 115JSection 143(3)Section 2Section 37Section 37(1)

learned Commissioner of Income tax has erred both on facts and in law in adding to the declared book profits under section 115JB, provision for gratuity amounting to Rs.1,32,03,725/- allegedly on the basis that the same is an unascertained liability and liable to be added ... shelters, DG Sets and UPS etc. 4. Assessee filed its return of income on 30.09.2011at Rs. 172,13,82,389/- and also declared book profit of Rs. 574,43,96,793/- under Section 115JB of the Income Tax Act, 1961 (the Act). This return was revised on 29th March

International Hospital Ltd., New Delhi vs. DCIT, New Delhi

ITA 1437/DEL/2017[2011-12]Status: DisposedITAT Delhi14 Oct 2021AY 2011-12

Bench: Shri O.P. Kant & Shri Kuldip Singh[Through Video Conferencing] Assessment Year: 2011-12

Section 115JSection 14A

Rs.67,69,460/- on account of bad debts written off against provision created in earlier years, in 2 computation of book profits u/s 115JB of the Income Tax Act, 1961. 3. That CIT(A) has erred both on facts and in law in confirming the non-deduction ... Rs.67,69,460/- on the ground that the appellant is not permitted to make any adjustment to the book profit except which has been specifically provided therein, without realizing that these bad debts written off were adjusted during the year against provision for doubtful debts created in earlier years

DCIT, New Delhi vs. M/S Omaxe Ltd., New Delhi

Appeal are dismissed

ITA 79/DEL/2016[2010-11]Status: DisposedITAT Delhi13 Oct 2021AY 2010-11

Bench: Ms Suchitra Kamble & Dr. B. R. R. Kumar & (Through Video Conferencing)

Section 143Section 250Section 253(2)Section 80I

return of income for Assessment Year 2009-10 was filed on 30/09/2009 declaring income at ‘NIL’ under the normal provisions of the Act. Book profits at Rs.39,44,19,197/- were reported u/s 115JB of the Act. Assessment u/s 144C(4)/153A read with Section 153 of the Income ... filed on 13.10.2010 declaring income at income at Rs. 23,01,19,070/- under the normal provisions of the Act. However, book profits at Rs. 79,06,38,634/- were reported u/s 115JB of the Act. Assessment order was passed on 26.05.2014 computing total income

DCIT, New Delhi vs. M/S Omaxe Ltd., New Delhi

Appeal are dismissed

ITA 78/DEL/2016[2009-10]Status: DisposedITAT Delhi13 Oct 2021AY 2009-10

Bench: Ms Suchitra Kamble & Dr. B. R. R. Kumar & (Through Video Conferencing)

Section 143Section 250Section 253(2)Section 80I

return of income for Assessment Year 2009-10 was filed on 30/09/2009 declaring income at ‘NIL’ under the normal provisions of the Act. Book profits at Rs.39,44,19,197/- were reported u/s 115JB of the Act. Assessment u/s 144C(4)/153A read with Section 153 of the Income ... filed on 13.10.2010 declaring income at income at Rs. 23,01,19,070/- under the normal provisions of the Act. However, book profits at Rs. 79,06,38,634/- were reported u/s 115JB of the Act. Assessment order was passed on 26.05.2014 computing total income

Neo Vehicleaids Pvt Ltd, Delhi vs. ITO Ward 18(1), New Delhi

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

ITA 2100/DEL/2019[2014-15]Status: DisposedITAT Delhi11 Oct 2021AY 2014-15

Bench: Shri R.K. Panda[Assessment Year: 2014-15] M/S Neo Vehicleaids Private Income Tax Officer, Limited, Ward-18(1), D-48, Sector-63, Nodia- C.R. Building, 201301, U.P. New Delhi-110092 Pan-Aadcn7327H Assessee Revenue

Section 143(2)Section 250(6)

return of income declaring NIL income after adjusting current year loss of Rs.38,963/-. However, tax of Rs.1,69,404/- was paid on book profits of Rs.9,15,697/- computed under the MAT provisions. The case was selected for scrutiny through CASS. Accordingly, notice

DCIT, Circle- 12(1), New Delhi vs. Ifci Ltd., New Delhi

The appeal of the Department stands dismissed

ITA 2895/DEL/2018[2012-13]Status: DisposedITAT Delhi30 Sept 2021AY 2012-13
Section 115JSection 14A

after set off against brought forward business loss of Rs.1,95,84,65,473/- and unabsorbed depreciation of Rs.1,70,83,02,735/-. The book profits U/s 115JB of the Income Tax Act, 1961 (hereinafter called ‘the Act’) were computed at Rs.5,50,26,19,665/-. Subsequently, the assessee revised ... after setting off brought forward business loss of Rs.1,95,81,90,350/- and unabsorbed depreciation of Rs.1,70,83,02,735/- and book-profits U/s 115JB at Rs.5,50,26,19,665/-. The assessment was completed at an income of Rs.1,52,19,72,150/- after making disallowance

Jmw India Pvt. Ltd., Delhi vs. DCIT, Circle- 13(2), New Delhi

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

ITA 4056/DEL/2018[2013-14]Status: DisposedITAT Delhi24 Sept 2021AY 2013-14

Bench: Shri R.K. Panda & Shri Vijay Pal Raoassessment Year: 2013-14 Jmw India Pvt. Ltd., Vs Dcit, C-498, 1St Floor, Jojna Vihar, Circle-13(2), Delhi. New Delhi. Pan: Aaacj3260C (Appellant) (Respondent) Assessee By : Shri C.S. Anand, Advocate & Shri Sankalp Anand, Advocate Revenue By : Ms Anima Barnwal, Sr. Dr Date Of Hearing : 26.08.2021 Date Of Pronouncement : 24.09.2021 Order Per R.K. Panda, Am: This Appeal Filed By The Assessee Is Directed Against The Order Dated 8Th March, 2018 Of The Cit(A)-5, Delhi Relating To Assessment Year 2013-14. 2. The Grounds Raised By The Assessee Are As Under:- “1. That On The Facts & In The Circumstances Of The Case , The Ld Cit(A) Had Erred In Not Allowing Exclusion Of Interest Subsidy Amounting To Rs. 30,01,143/- & Of Excise Duty Refund Amounting To Rs. 4,98,49,144/-, Being Capital In Nature, In Computing Book Profit U/S 115Jb . 2. That On The Facts & In The Circumstances Of The Case ,The Book Profit U/S 115Jb Ought To Had Been Computed At A Negative Figure, As Per The Revised Computation Of Income Filed By The Assessee.”

For Appellant: Shri C.S. Anand, Advocate &For Respondent: Ms Anima Barnwal, Sr. DR
Section 115JSection 2(24)

amounting to Rs. 30,01,143/- and of Excise Duty Refund amounting to Rs. 4,98,49,144/-, being capital in nature, in computing book profit u/s 115JB . 2. That on the facts and in the circumstances of the case ,the book profit u/s 115JB ought to had been computed ... Revenue and no appeal has been filed. However, the assessee’s claim that such amount of Rs.5,28,50,287/- be reduced from the book profit for the purpose of MAT as per the revised computation of income was not accepted by the CIT(A) by observing as under

ACIT, Circle- 22(2), New Delhi vs. Saveer Biotech Ltd., New Delhi

The appeal of the Revenue is dismissed

ITA 6952/DEL/2017[2013-14]Status: DisposedITAT Delhi23 Sept 2021AY 2013-14

Bench: Ms Suchitra Kamble & Sh. Prashant Maharishi

Section 115JSection 143(3)Section 14ASection 2(24)(x)Section 271Section 271(1)(c)Section 35Section 36

house. Appellant has filed its return of income on 24.09.2013 for AY 2013-14, declaring loss of Rs. (-) 27,76,517/-, apart from declaring book profits of Rs. 2,20,45,910/- u/s 115JB of the Act. For assessment year under consideration, tax payable on return income under normal provisions ... less than tax payable on book profits u/s 115JB of the Act therefore return of income was filed, declaring tax payable under section 115JB of the Act. The case was taken up for scrutiny and assessment u/s 143(3) of the Act was completed by assessing officer on 05.02.2016, determining

DCIT, New Delhi vs. M/S. Jaypee Capital Services Ltd., New Delhi

In the result, ITA.No.3559/Del

ITA 3559/DEL/2016[2012-13]Status: DisposedITAT Delhi21 Sept 2021AY 2012-13

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastava

For Appellant: And Shri Ashish Goel, C.AFor Respondent: Shri Bhuvnesh Kulshreshtha
Section 132Section 153A

claimed 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; 56 ITA.No.3558 & 3559/Del./2016

DCIT, New Delhi vs. M/S. Jaypee Capital Services Ltd., New Delhi

In the result, ITA.No.3559/Del

ITA 3558/DEL/2016[2011-12]Status: DisposedITAT Delhi21 Sept 2021AY 2011-12

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastava

For Appellant: And Shri Ashish Goel, C.AFor Respondent: Shri Bhuvnesh Kulshreshtha
Section 132Section 153A

claimed 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; 56 ITA.No.3558 & 3559/Del./2016

DCIT, Circle- 12(1), New Delhi vs. Indian Sugar Exim Corporation Ltd., New Delhi

ITA 3476/DEL/2018[2010-11]Status: DisposedITAT Delhi27 Aug 2021AY 2010-11

Bench: Shri Anil Chaturvedi & Shri Kuldip Singh

For Appellant: Shri Sumit Jain, CAFor Respondent: Ms. Anima Barnwal, Senior DR
Section 143Section 14ASection 254Section 271(1)(c)

first computed under the normal provisions of the Act and tax payable on such total income is compared with the prescribed percentage of the book profits computed under section 115JB of the Act. The higher of the two amounts is regarded as total income and tax is payable with reference ... such total income. If the tax payable under the normal provisions is higher, such amount is the total income of the assessee, otherwise, the book profits are deemed as the total income of the assessee in terms of Section 115JB of the Act. Where the income computed in accordance with

ACIT, New Delhi vs. M/S. Quippo Energy (P) Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 4777/DEL/2016[2009-10]Status: DisposedITAT Delhi23 Aug 2021AY 2009-10

Bench: Shri Kul Bharat & Shri Prashant Maharishiassessment Year : 2009-10 Acit, Vs Quippo Energy (P.) Ltd., Circle-21(2), Room No.199C, D-2, Saket Palace, Saket, 1St Floor, C.R.Building, New Delhi-110017. I.P.Estate, New Delhi. Pan-Aaacq1675Q Appellant Respondent Appellant By Sh. Govind Singhal, Sr.Dr Respondent By Smt. Alka Arren, Adv. Date Of Hearing 05.08.2021 Date Of Pronouncement 23.08.2021

Section 143(1)

present appeal are that the assessee had filed its return of income on 30.09.2009 of Rs.61,08,204/- and paid tax under MAT on book profits amounting to Rs.2,07,08,618/-. The return was processed u/s 143(1) of the Income Tax Act, 1961 (“the Act”) on 14.03.2011. Thereafter

Brash Steels Pvt Ltd, Faridabad vs. ITO Ward - 1(2), Faridabad

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

ITA 6181/DEL/2019[2015-16]Status: DisposedITAT Delhi17 Aug 2021AY 2015-16

Bench: Shri R.K. Pandaassessment Year : 2015-16 M/S Brash Steels Pvt. Ltd. Vs. Ito, Ff-9, Vishnu Place, Near Ward-1(2), Neelam Flyover, Sector-20B, Faridabad, Faridabad, Haryana-121002 Haryana-121002 Pan-Aafcb0204R

For Appellant: Sh. Rajiv Saxena, AdvocateFor Respondent: Sh. Farat Khan, Sr. DR
Section 11USection 133(6)Section 56(2)(viib)Section 68

claimed 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 contingent liabilities

Sports & Leisure Apparel Ltd., New Delhi vs. DCIT, New Delhi

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

ITA 3796/DEL/2017[2012-13]Status: DisposedITAT Delhi11 Aug 2021AY 2012-13

Bench: Shri Kul Bharatassessment Year : 2012-13 Sports & Leisure Apparel Ltd., Vs Dcit, B 25, Qutab Institutional Area, Circle-24(1), New Delhi New Delhi. Pan-Aaacs2959M Appellant Respondent Appellant By Sh. M.P.Rastogi, Adv. Respondent By Sh. R.K.Gupta, Sr.Dr Date Of Hearing 02.08.2021 Date Of Pronouncement 11.08.2021

Section 115JSection 143(3)Section 234B

learned CIT [A] has erred in not clearly directing that the disallowances made under normal provisions are not includable to book profits/ income computed u/s 115JB of the Act -as they are not covered by Explanation to Section 115JB of the Act. 3. The interest charged u/s 234B is wrong ... Rs.73,99,653/-. The Assessing Officer observed that since the tax payable in normal income is less than the tax payable on book profit u/s 115JB of the Act. Therefore, taxable income was taken at Rs.73,99,653/- u/s 115JB of the Act. 3. Aggrieved against this, the assessee preferred