Tribunal upholds Rs.30,82,223 addition to book profit under Income Tax Act 115JB.

The Tribunal upheld the addition of Rs.30,82,223/- to the book profit for the assessment year 2013-14 under section 115JB of the Income Tax Act. The decision emphasized that income offered by the assessee, even if mistakenly omitted from the profit and loss statement, must be included in the book profit calculation to prevent gaining from errors and align with the legislative intent of section 115JB. The appeal challenging the addition was dismissed, affirming the tax authorities' decision.

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Issues:
1. Addition of Rs.30,82,223/- to the book profit while computing u/s.115JB of the Act.

Analysis:
The appeal pertains to the assessment year 2013-14 challenging the addition of Rs.30,82,223/- to the book profit under section 115JB of the Income Tax Act. The assessee contended that the revenue wrongly included the interest amount while calculating the book profit, citing Explanation 1 to section 115JB. The authorized representative argued that only amounts mentioned in Explanation 1 could be added to the book profit, relying on the Supreme Court's decision in Apollo Tyres v. CIT. On the contrary, the Departmental Representative supported the lower authorities' decision, emphasizing a significant difference between income as per 26AS and books. The Commissioner upheld the addition, stating that the difference would affect the book results and thus, the Supreme Court's decision in Apollo Tyres would not apply.

During the assessment proceedings, the Assessing Officer requested the assessee to reconcile the income appearing in Form 26AS. The assessee offered the income of Rs.30,82,223/- under the normal computation of income, acknowledging the difference between income as per 26AS and books. This amount was added to the total income and the book profit of the assessee. The assessee argued that the amount from Form 26AS, once offered as income, should not be added to the book profit as per section 115JB. However, the Tribunal held that if an amount required to be included in the profit and loss statement was omitted due to error, fraud, or deliberate action, it must be added to the book profit. The Tribunal emphasized that gaining from one's mistake should not be allowed, and a strict interpretation of book profit would defeat the legislative purpose, leading to absurdity. Therefore, the Tribunal dismissed the appeal, upholding the addition of Rs.30,82,223/- to the book profit for section 115JB purposes.

In conclusion, the Tribunal dismissed the appeal filed by the assessee, upholding the addition of Rs.30,82,223/- to the book profit for the assessment year 2013-14 under section 115JB of the Income Tax Act. The decision was based on the principle that income offered by the assessee, even if mistakenly omitted from the profit and loss statement, must be included in the book profit calculation to prevent gaining from one's errors and to align with the legislative intent of section 115JB.

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