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2011 (3) TMI 1087 - AT - Income TaxComputation of book profit under section 115JB - MAT - addition on account of revaluation reserve while computing the book profit under section 115JB - Held that:- As from the provisions of Explanation 1 to section 115JB(2) that amount carried to any reserve by whatever name called has to be added to the net profit if the amount had been debited to the profit and loss account. In this case the revaluation reserve had been directly taken to the balance sheet and not debited to the profit and loss account and therefore the amount could not be added under clause (b) of Explanation 1 to section 115JB(2). It is also pertinent to note that clause (iia) was inserted to the Explanation 1 with effect from 1-4-2007 in which it was provided that amount of depreciation debited to the profit and loss account excluding the depreciation on account of revaluation of assets has to be reduced from the net profit. Thus the Legislature though it fit to exclude the depreciation on account of revaluation of assets from the amount to be reduced from the net profit but there were no similar provision inserted for addition of revaluation reserve to the net profit even if the same was not debited to the profit and loss account. Thus no addition could be made to the net profit on account of revaluation reserve directly taken to the balance sheet while computing the book profit. In favour of assessee.
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