Book profit adjustment under MAT cannot include upward transfer pricing additions unless expressly permitted by the statute.

Book profit under section 115JB cannot be enhanced through rectification by adding an upward transfer pricing adjustment unless the adjustment is specifically permitted by Explanation 1. The Assessing Officer's power to alter book profit is confined to the items expressly listed in the Explanation, and an upward adjustment recommended by the Transfer Pricing Officer does not fall within those prescribed additions. The cited coordinate bench view was relied on to support the same interpretation, confirming that such an addition is not sustainable in the computation of book profit.

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Issues: Whether the Assessing Officer could, while passing a rectification order, enhance book profit under section 115JB by adding the upward transfer pricing adjustment.

Analysis: The assessment had been completed under the normal provisions and the dispute was whether the upward adjustment recommended by the Transfer Pricing Officer could be brought into the computation of book profit. Explanation 1 to section 115JB did not contain any clause permitting such addition. The power of the Assessing Officer to alter book profit is limited to the adjustments specifically provided in the Explanation, and an upward transfer pricing adjustment is not one of them. The Tribunal also found support in the cited coordinate bench view that such addition is not sustainable in the computation of book profit.

Conclusion: The addition to book profit under section 115JB by way of rectification was not permissible and the issue was decided in favour of the assessee.

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