Since the sales-tax subsidy has been directly credited to the capital reserve and never credited to the P&L a/c, in accordance with AS-12 and the provisions of the Companies Act, 1956, the AO was not justified in making an addition to book profit under s. 115JB; there being no finding in the CIT(A)’s order that the accounts of the assessee-company were not prepared in accordance with the Companies Act, the adjustment made by the AO was beyond his jurisdiction. (AY.2003-04, 2006-07)