Agricultural land sale proceeds cannot be added to book profit for MAT merely through rectification under section 154.

Profit from transfer of agricultural land, which is not a capital asset under section 2(14), cannot be added to book profit for MAT purposes under section 115JB where it is outside the regular capital gains computation. The tribunal followed prior rulings that such receipt is not includible in book profit merely because the assessment was later sought to be altered through rectification under section 154. The rectification point did not require separate treatment once the substantive MAT issue was resolved on the record, and the assessee succeeded on the inclusion issue.

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Issues: Whether profit on transfer of agricultural land could be included in book profit under section 115JB of the Income-tax Act, 1961, and brought to tax through rectification under section 154 of the Income-tax Act, 1961.

Analysis: The income from sale of agricultural land was accepted in the original assessment, and the impugned addition was made only in rectification proceedings. The dispute turned on whether such receipt, being outside the regular charging provisions and not treated as capital gain in the normal computation, could nevertheless be added while determining book profit for MAT purposes. The decision followed prior tribunal rulings holding that profit from transfer of agricultural land, which is not a capital asset under section 2(14), is not liable to be included in book profit under section 115JB. The rectification issue did not survive separately once the substantive MAT question was answered on the available record.

Conclusion: The inclusion of profit from sale of agricultural land in book profit under section 115JB was held to be unsustainable, and the assessee succeeded on this issue.

Ratio Decidendi: A receipt arising from transfer of agricultural land, being outside the scope of taxable capital gains in the regular computation, cannot be added to book profit for MAT purposes under section 115JB merely by resort to rectification.

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