Held that, when books of account of assessee are not in accordance with Part II and III of Schedule VI to Companies Act, 1956, then AO is empowered to tinker with net profit by making additions u/s. 115JB to book profits. Disallowance u/s. 14A r.w. rule 8D is not to be applied while determining book profits u/s. 115JB. Disallowance u/s. 14A r.w. rule 8D is not to be applied while determining book profits (AY 2010-11, 2012-13)
Jayant Packaging (P.) Ltd. v. DCIT (2021) 189 ITD 321/(2022) 96 ITRR 411 (Chen.)(Trib.)
S. 115JB : Book profit-When income is not reported in its P&L account, could not be said that its prepared in accordance with Part II and III of Schedule-VI to Companies Act. AO is justified to re-compute book profit u/s. 115JB-Disallowance u/s. 14A r.w. rule 8D is not to be applied while determining book profits. [S. 14A, R. 8D]