TaxTMI 
TaxTMI 
2018 (2) TMI 868
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....aring a total income of Rs. 11,77,96,429/-. Thereafter a revised return was filed by the assessee on 28.03.2015 declaring its total income under the normal provisions of the Act at Rs. 12,27,63,780/- and book profit under section 115JB of the Act at Rs. 20,48,42,669/-. The assessee company during the year under consideration was a partner in the partnership firm of M/s. C.D. Investments having share of profit of 97.50%. The said partnership had incurred a loss of Rs. 19,39,61,832/- for the year ended on 31.03.2012 and its share in the said loss amounting to Rs. 18,91,12,786/- was debited by the assessee company to its profit & loss for the year under consideration. While computing the book profit u/s 115JB of the Act, the amount of such loss however was not added back by the assessee company by relying on the decision of Mumbai Bench of the ITAT in the case of DCIT vs Metro Exporters Ltd. 10 SOT 647 wherein it was held that the case of the assessee was not being the case of share of profit from partnership firm in the hands of the assessee credited to the profit and loss account, no addition for the purpose of computation of total income of the assessee u/s 115JA could be made with....
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....ted that the clause (ii) refers to "income" which is "credited" in P& L A/c which has to be "reduced" from the Net Profit. According to the assessee the clause (ii) cannot be interpreted so as to add to the net profit "loss" which is debited in Profit & Loss Account while computing book profit u/s 115JB of the Act. Strong reliance in this regard was placed by the assessee on the decision of ITAT, Mumbai in the case of Dy. CIT vs Metro Exporters Ltd (10 SOT 647). I however do not find merit in the assessee's claim. The Supreme Court in the case of CIT Vs J.H. Gotla (156 ITR 323) has specifically held that the term "income" used in the Income-tax Act, 1961 includes "loss". Even the Calcutta High Court in the case of Eastern Aviation & Industries Limited (208 ITR 103) held that the loss is 'negative income'. Accordingly the contention of the assessee that the term 'income' as employed in clause (ii) of Explanation to Section 115JB cannot be said to include 'loss' is untenable. I therefore hold that the AO had rightly added back the share of loss of Rs. 189,112,786/- from the partnership firm under clause (ii) of Explanation (1) to Section 115JB of the Act. ....
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....n accordance with "Book Profit" of the assessee and the working of the "book profit" has to be made as per the provisions of Chapter XII-B of the Act. The proposition that the word "income" includes "loss" is not applicable while computing the "book profit" in accordance with the provision of Chapter XII-B of the Act. We find that the provision of sub-clause (f) to Explanation to section 115JA of the Act relates to the amounts of "Expenditure" relatable to any income to which any of the provisions of Chapter III applies and therefore the "loss share" from a registered firm cannot be said to be synonymous to the word expenditure mentioned in the relevant sub-clause (f) to Explanation to section 115JA of the Act. In sub-clause (ii) Explanation to section 115JA provides for any amount of income to which any of the provisions of Chapter III applies, if such amount is credited to the profit and loss account of the assessee. In this case, the share of the assessee from a registered firm is a "loss" figure and therefore is debited to the profit and loss account of the assessee and cannot be credited to the profit and loss account of the assessee. In these facts of the case, we find that t....
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....as disallowed and added back by the assessee company as per the provisions of section 14A of the Act. While computing the book profit under section 115JB of the Act, the said amount on account of expenditure disallowed under section 14A was not added back by the assessee company. By relying inter alia on the decision of Mumbai Bench of this Tribunal in the case of Esquire Pvt. Ltd. vs DCIT (ITA No. 5688/Mum/2011), the Assessing Officer held that an amount disallowed under section 14A on account of expenditure incurred in relation to the exempt income was liable to be added back while computing the book profit of the assessee company under section 115JB of the Act. He accordingly made the addition of Rs. 75,75,430/- on account of disallowance under section 14A while computing the book profit of the assessee company. On appeal, the Ld. CIT(A) confirmed the said addition made by the A.O. by relying on the decision of Hon'ble Delhi High Court in the case of CIT vs Goetze (India) Ltd. 361 ITR 505. 9. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that a similar issue relating to addition on account of expenditu....