|COURT:||Bombay High Court|
|CORAM:||A. M. Badar J, S. V. Gangapurwala J|
|CATCH WORDS:||Book Profits, capital gains|
|DATE:||July 18, 2017 (Date of pronouncement)|
|DATE:||July 27, 2017 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 115JB: The AO is not entitled to add to the "book profits" the amounts arising from sale of land which are directly credited to the Capital Reserve Account in the balance sheet rather than routing it through Profit and Loss Account in the manner provided as per Part II and Part III of Schedule VI to the Companies Act, 1956|
(i) The learned counsel for the Appellant submits that Tribunal was not justified in not accepting the reworking of the book profits by the Assessing Officer as per the provisions of Section 115JB of the Income Tax Act. The Assessee had directly credited the profit of Rs.2,84,84,000/ arising from sale of land to Capital Reserve Account in the balance sheet rather than routing it through Profit and Loss Account in the manner provided as per Part II and Part III of Schedule VI to the Companies Act, 1956.
(ii) Tribunal while passing the impugned Order observed that while computing the book profit under Section 115JB of the Income Tax Act, the Assessing Officer added the sum of Rs.2,84,84,000/in the book profit. The Commissioner of Income Tax (Appeals) deleted the addition. The Tribunal referring to the Judgment of the Apex Court in a case of Apollo Tyres Ltd. v. C.I.T. reported in 255 ITR 273 and Judgment of this Court in case of Akshay Textiles Trading and Agencies Pvt.Ltd., reported in 304 ITR 401 has observed as under:
“Respectfully following the decision of Hon’ble Bombay High Court in the case of Abdhut Trading Co. Pvt. Ltd. (supra) and in the case of Akshay Textiles Trading and Agencies Pvt. Ltd. (supra), we do not find any infirmity in the order of ld. CIT(A) for deleting the addition under Section 115JB.”
(iii) In light of above, the Tribunal has not committed any error. The Appeal as such is dismissed. No costs.