Assessee transferred about Rs. 52.70 crores to Special Reserve under section 45IC of the RBI Act, 1934 and claimed that, being a statutory transfer, the amount was to be excluded both from computation of total income under normal provisions and from book profit under section 115JB. Assessing Officer held that it was an appropriation of profit and added the same to the income of assessee. CIT(A) affirmed the order of the Assessing Officer. On appeal, the Tribunal held that transfer to Special Reserve under section 45IC of the RBI Act, 1934 is an appropriation of profit and therefore not allowable as a deduction\/excludable in computing (i) income under normal provisions and (ii) book profit under section 115JB. Therefore, the amount transferred to the Special Reserve under section 45IC of the RBI Act, 1934, was to be added back to book profit under section 115JB of the Act. (AY. 2018-19)<\/p>\n","protected":false},"excerpt":{"rendered":"
S.37(1): Business expenditure-Special reserve-Amount transferred to special reserve pursuant to the provision of section 45 IC of the RBI Act, 1934 is an appropriation of profit and not allowable as a deduction or excludable; the amount transferred was required to be added back to book profit under section 115JB [S.115JB RBI Act, 1934, S.451C] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-61119","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-fTN","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/61119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=61119"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/61119\/revisions"}],"predecessor-version":[{"id":61120,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/61119\/revisions\/61120"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=61119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=61119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=61119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}