rain Commodities has held that as assessee himself credited the amount though exempt to Profit and loss account now it is not possible to adjust it to the book profit. Now the issue is when the assessee credits the amout of one time settlement gain from the banks to the capital reserve as some capital is alos waived by the bank same can also be increased to the book profit and 115JB applicable ?
rain commdity says so that this issue is still open!!!
Hence, it was not a case of the assessee that the long-term capital gain was not includible in the profit and loss account prepared in terms of Schedule VI to the Companies Act. Only in the computation of book profit under section 115JB, the assessee claimed exclusion of long-term capital gain which was exempt under section 47(iv). It is due to fact that the assessee claimed deduction of long-term capital gain from book profit by virtue of being exempted income in the normal provisions of the Act and not because of the reason that the same was not includible in profit and loss account prepared under Part II and Part III of Schedule VI. In the circumstances, when the assessee itself had included the capital gains arising from sale of subsidiary in the profit and loss, the same could not be excluded under any of the Explanations under section 115JB. At this point, it was not necessary to dwell upon the situation, where the assessee had directly credited the profit on sale of asset to a reserve account.