Section 115JB deduction computed on book profits, with the interpretation settled by binding precedent.

The deduction under clause (iv) of the Explanation to Section 115JB is computed on the basis of book profits, not on profits computed under the Act. The legal position was treated as settled in light of the Supreme Court's decision in Ajanta Pharma Limited, and the interpretation of Section 115JB was applied accordingly in favour of the assessee. The appeals were disposed of in accordance with that settled construction of the provision.

---

---

Issues: Whether the deduction under clause (iv) of the Explanation to Section 115JB is to be computed on the basis of book profits or on the basis of profits computed under the Act.

Analysis: The issue was treated as no longer res integra in view of the binding decision of the Supreme Court in Ajanta Pharma Limited. On that basis, the legal position governing computation of the deduction under Section 115JB was accepted as settled.

Conclusion: The deduction is to be computed on the basis of book profits. The issue was answered in favour of the assessee.

Final Conclusion: The appeals stood disposed of in accordance with the settled law on computation of deduction under Section 115JB.

Ratio Decidendi: Where the binding precedent has settled the interpretation of Section 115JB, the deduction under the relevant Explanation is computed with reference to book profits.

---