Haldia Petrochemicals Ltd. v. ITO

INCOME TAX ACT, 1961

--MAT--Book profit under section 115JB Adjustment of deferred tax liability----Amount of loss brought forward or unabsorbed depreciation, whichever is less, as per books will be reduced from the amount of book profit. So, in the instant case, the plea of assessee that the amount of deferred tax assets included in the brought forward loss should be excluded from the said amount, was not tenable.--In the instant case, the plea of assessee that the amount of the deferred tax assets included in the brought forward loss should be excluded from the said amount was not tenable. Moreover, relying in the decision in the case of Apollo Tyres Ltd. v. CIT (2002) 255 ITR 273 (SC) and Kinetic Motor Co. Ltd. v. DCIT (2002) 262 ITR 330 (Bom), it was held that AO does not have the jurisdiction to go beyond the net profit shown in the audited Profit and Loss Account which was accepted by shareholders and filed with Registrar of Companies, except to the extent provided in Explanation to sub-section (2) of section 115JB. Thus, AO could not make any adjustments to the book profits of the taxpayer once it was certified by the auditors. Accordingly, there was no infirmity in the order of Commissioner (Appeals).