Tribunal held that when a particular receipt is exempt from tax under Income tax law, then same cannot be considered for purpose of computation of book profit. Accordingly sales tax subsidy received by assessee being capital in nature was to be reduced from book profit .( AY. 2006 -07)
ACIT v. JSW Steel Ltd. (2020) 180 ITD 505 (Mum) (Trib.)
S. 115JB : Book profit – Sales tax subsidy- Capital in nature – A receipt exempt from tax under Income tax law, cannot be considered for purpose of computation of book profit- Sales tax subsidy received by assessee being capital in nature is to be reduced from book profit [ S.4, 28(i) ]