2016 (8) TMI 1385

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....(A) has erred in law and on facts in deleting the addition of Rs. 1,89,81,032/- made on account of provisions of I. T. Act u/s. 115JB of the Act. 2. The Ld. CIT(A) has erred in law and on facts in not appreciating that the assessee has to be added provision made for current tax as per explanation 1 to sub-section (2) of section 115JB of the Act. 3. On the facts and circumstances of the case, the Ld. Commissioner of Income tax (A) ought to have upheld the order of the Assessing Officer. 4. It is, therefore, prayed that the order of the Ld. Commissioner of Income tax (A) may be set-aside and that of the Assessing Officer be restored. 3. The brief fact of the case is that return of income declaring loss of Rs. 5,6....

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....ellant had debited Rs. 1,94,00,000/- as provision for current year tax and had added only Rs,4,18,968/- while working out MAT provision. A.O. passed rectification order u/s.154 of the Act and recalculated the book profit for the purpose of MAT. During the rectification proceedings appellant had explained to the A.O. that it had made provision of income-tax at Rs. 1,94 crores. However, it has claimed MAT credit of Rs. 1,93,69,003/- against that provision and accordingly net provision of Rs. 30,997/- has been considered while calculating book profit u/s.115JB. It further stated that this is based on the guidance note on accounting issued by Institute of Chartered Accountants of India for credit available in respect of MAT as well as provision....

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....il, 1997 shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount was withdrawn) under this Explanation or Explanation below the second proviso to section 115JA, as the case may be; or ..." As per the above stated proviso book profit must also be increased by the provision out of which the same has been withdrawn and credited to Profit & Loss a/c. Considering the provisions of the Act, I am of the considered opinion that appellant has rightly reduced the MAT credit of Rs. 1,93,699,003/- as per section 115JB(2) explanation 1 item No.1 from provisions of l.T. Act of Rs. 1,94,00,000/- while calculating book profit. Further it has also....

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....ount credited to profit and loss account being MAT credit entitlement Rs. 1,93,69,003/ is to be reduced while calculating book profit as is mentioned in item no.(i) of explanation 1 to sec.115JB(2) of the act. The calculation for the same as furnished by the assessee is reproduced as under:- Sr. No. Particulars of amount added Amount Amount (Rs.) 1 Provision of Income-tax 1,94,00,000     Less: MAT credit entitlement (1,93,69,003) 30,997 2 Excess Provision of Income-tax of earlier year   (115) 3 Dividend Distribution tax of earlier year   3,406 4 Interest on Income Tax (Note No. 23 of the balance sheet) 3,84,680     TOTAL   ....