2001 (8) TMI 310 - ITAT MUMBAI

Application of MAT - Electricity Company - Corporation - Held that: - It is true that the word used in section 115JA of the Act is 'company'. The heading of this section is "Deemed income relating to certain companies". The provision begins with a non obstante clause. It applies to every assessee being a company. - a corporation cannot be construed to be a company for the purpose of charging the Minimum Alternate Tax. The case of the assessee falls beyond the ken of section 115JA. We decide this issue in favour of the assessee and against the revenue. - The term "book profits" is defined in Explanation to section 115JA. It means the net profit shown in the Profit & Loss Account. Only those adjustments, which are specified in the section, are permissible. The scope of the provision cannot be curtailed. The practice adopted by the assessee of debiting the prior period expenses into the revenue account was in consonance with the well-established accounting principle. - provision of ₹ 3.3 crores in respect of bad and doubtful debts, in our opinion, this cannot be disregarded in computing the book profit.