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2018 (6) TMI 1450
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.... from two firms named M/s.Fixit & Co., and M/s.Walker & Greig, of which, it was a partner, though such losses were debited by the assessee in its Profit & Loss A/c. However, the Ld.AO was of the opinion that share income from firm being exempt under Chapter-III of the IT Act, even if such share was a loss, it had to be added back for computing the profit u/s.115JB of the Act. Accordingly, he added the share loss of Rs. 2,11,346/- from M/s.Walker & Grieg and Rs. 68,564/- from M/s.Fixit & Co., to the profits as per the Profit & Loss A/c and computed the profit for the purpose of levying tax u/s.115JB of the Act. 4. Aggrieved, the assessee moved in appeal before the Ld.CIT(A). Argument of the assessee before the Ld.CIT(A) was that Explanation given u/s.115JB of the Act, spelt out the additions that could be made to the profits shown in the audited Profit & Loss A/c. According to the assessee, share of loss could not be considered as an expenditure relatable to exempt income and therefore, though such share of loss which was debited into Profit & Loss A/c, could not be added back while computing profit u/s.115JB of the Act. The Ld.CIT(A) was appreciative to this contention and delet....
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....repare its 76[statement of profit and loss] for the relevant previous year in accordance with the provisions of 76a[Schedule III] to the 76b[Companies Act, 2013 (18 of 2013)]; or (b) being a company, to which the 76c[second proviso to sub-section (1) of section 129] of the 76d[Companies Act, 2013 (18 of 2013)] is applicable, shall, for the purposes of this section, prepare its 76e[statement of profit and loss] for the relevant previous year in accordance with the provisions of the Act governing such company: Provided that while preparing the annual accounts including 76e[statement of profit and loss],- (i) the accounting policies; (ii) the accounting standards adopted for preparing such accounts including 76e[statement of profit and loss]; (iii) the method and rates adopted for calculating the depreciation, shall be the same as have been adopted for the purpose of preparing such accounts including 76e[statement of profit and loss] and laid before the company at its annual general meeting in accordance with the provisions of 76f[section 129] of the 76d[Companies Act, 2013 (18 of 2013)] : Provided further that where the c....
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....d in sub-section (1); or (fc) the amount representing notional loss on transfer of a capital asset, being share of a special purpose vehicle, to a business trust in exchange of units allotted by the trust referred to in clause (xvii) of section 47 or the amount representing notional loss resulting from any change in carrying amount of said units or the amount of loss on transfer of units referred to in clause (xvii) ofsection 47; or 78[(fd) the amount or amounts of expenditure relatable to income by way of royalty in respect of patent chargeable to tax under section 115BBF; or] (g) the amount of depreciation, (h) the amount of deferred tax and the provision therefor, (i) the amount or amounts set aside as provision for diminution in the value of any asset, (j) the amount standing in revaluation reserve relating to revalued asset on the retirement or disposal of such asset, (k) the amount of gain on transfer of units referred to in clause (xvii) of section 47 computed by taking into account the cost of the shares exchanged with units referred to in the said clause or the carrying amount of the shares at the time of excha....
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....fied in Chapter XII, if such income is credited to the 80[statement of profit and loss] and the income-tax payable thereon in accordance with the provisions of this Act, other than the provisions of this Chapter, is at a rate less than the rate specified in sub-section (1); or (iie) the amount representing,- (A) notional gain on transfer of a capital asset, being share of a special purpose vehicle to a business trust in exchange of units allotted by that trust referred to in clause (xvii) of section 47; or (B) notional gain resulting from any change in carrying amount of said units; or (C) gain on transfer of units referred to in clause (xvii) of section 47, if any, credited to the 80a[statement of profit and loss]; or (iif) the amount of loss on transfer of units referred to in clause (xvii) of section 47 computed by taking into account the cost of the shares exchanged with units referred to in the said clause or the carrying amount of the shares at the time of exchange where such shares are carried at a value other than the cost through 81[statement of profit and loss], as the case may be; 82[or] 82[(iig) the....
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....f any, as levied by the Central Acts from time to time; and (v) Secondary and Higher Education Cess on income-tax, if any, as levied by the Central Acts from time to time. Explanation 3.-For the removal of doubts, it is hereby clarified that for the purposes of this section, the assessee, being a company to which the 86[second proviso to sub-section (1) of section 129 of the Companies Act, 2013 (18 of 2013)] is applicable, has, for an assessment year commencing on or before the 1st day of April, 2012, an option to prepare its 87[statement of profit and loss] for the relevant previous year either in accordance with the provisions of 88[Schedule III to the Companies Act, 2013 (18 of 2013)] or in accordance with the provisions of the Act governing such company.] 89[Explanation 4.-For the removal of doubts, it is hereby clarified that the provisions of this section shall not be applicable and shall be deemed never to have been applicable to an assessee, being a foreign company, if- (i) the assessee is a resident of a country or a specified territory with which India has an agreement referred to in sub-section (1) of section 90 or the Central Governme....
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.... or debited to other comprehensive income under the head "Items that will not be re-classified to profit or loss" in respect of- (i) revaluation surplus for assets in accordance with the Indian Accounting Standards 16 and Indian Accounting Standards 38; or (ii ) gains or losses from investments in equity instruments designated at fair value through other comprehensive income in accordance with the Indian Accounting Standards 109: Provided further that the book profit of the previous year in which the asset or investment referred to in the first proviso is retired, disposed, realised or otherwise transferred shall be increased or decreased, as the case may be, by the amount or the aggregate of the amounts referred to in the first proviso for the previous year or any of the preceding previous years and relatable to such asset or investment. (2B) In the case of a resulting company, where the property and the liabilities of the undertaking or undertakings being received by it are recorded at values different from values appearing in the books of account of the demerged company immediately before the demerger, any change in such value shall be ignored....
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.... paragraphs D5 and D7 of the Indian Accounting Standards 101 on the convergence date; (E) adjustments relating to investments in subsidiaries, joint ventures and associates recorded at fair value as deemed cost in accordance with paragraph D15 of the Indian Accounting Standards 101 on the convergence date; and (F) adjustments relating to cumulative translation differences of a foreign operation in accordance with paragraph D13 of the Indian Accounting Standards 101 on the convergence date.] (3) Nothing contained in sub-section (1) shall affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions of sub-section (2) of section 32 or sub-section (3) of section 32A or clause (ii) of sub-section (1) of section 72 or section 73 or section 74 or sub-section (3) of section 74A. (4) Every company to which this section applies, shall furnish a report in the prescribed form93 from an accountant as defined in the Explanation below sub-section (2) of section 288, certifying that the book profit has been computed in accordance with the provisions of this section al....