The assessee had demerged its resort division, resulting in a demerger loss disclosed as extraordinary item in audited accounts. While computing book profit under section 115JB, AO made adjustments beyond the permissible Explanation 1. The Court held that AO’s jurisdiction under MAT provisions is limited to specified adjustments; once accounts are certified and approved under Companies Act, AO cannot alter book profits. (AY. 2009-10)