115JB

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vipin (Querist)

14 July 2010 All experts are requested to put light on following matter:
Since A.O. does not have authority to redraft P/L A/C except 8 Addition & 8 reductions specified.
Now a assessee liable to tax under MAT does a tax planning & LTCG are directly credited to R&S instead of P/L to avoid taxation.
Assessee also contravene the schedule VI by crediting LTCG dirctly to R&S.
However Assessee says at the most only AUDITOR can qualify the report & also A.O. has no authority to redraft according to schedule.
PLEASE ANSWER CONSIDERING THE MATTER & WHAT IF SCHEDULE IS NOT COMPLIED WITH w.r.t INCOME TAX LIABILITY.
PLEASE ANSWER WITH REASON

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)

14 July 2010 Yes i agree with you that AO does not have right to rewrite books of A/c but if there is any expense or income which should be considered for taxation purpose then he can put a question mark there. He can not make the changes in the amount which is shown in the P & L A/c but if anything which is a income then he has a right to add it to the total income of the assessee.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

14 July 2010 For purposes of computing book profits under section 115J, the assessee must consider capital gains also while calculating the total income.
CIT v. Veekaylal Investment Co. (P.) Ltd. [2001] 249 ITR 597 (Bom.).

Manmohan ACA, CS

Manmohan ACA, CS (Expert)

15 July 2010 A.O. does not have authority to redraft P/L A/C however he can disallow the deduction excess or wrongly claim and include in taxable profit income ought to have included.

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