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2015 (6) TMI 528 - AT - Income TaxProfit on sale of equity shares - MAT calculation - whether the proviso to section 10(38) is a charging section and consequently the long term capital gain on sale of equity shares is chargeable as book profit under section 115JB and not the profit on sale of equity shares as held by the learned CIT(A) - Held that:- The book profits as contemplated in section 115JB means the net profit, which has been shown/credited in the profit & loss account as prepared under the relevant provisions of the Companies Act. Under the Companies Act, only the net gain/loss from sale of shares is to be included. It does not speak of Long term capital gain or Short term capital gain. Thus, while computing the book profit, income u/s. 10(38) will not be reduced and this income here would mean income credited to the Profit & loss account. Once, Explanation to section 115JB provides that the amount of income which is to be reduced or not, which inter alia means any such amount which is credited to the Profit & loss account then only such amount credited in the Profit & loss account shall alone be taken into consideration for computing the book profit. The concept of indexation while computing the Long term capital gain cannot be imported to the computation of book profit u/s. 115JB as per the expressed provisions of the said section itself which is a complete code in itself. Thus the net amount on account of sale of shares will alone be taken into account in computation of book profit and not the amount of Long term capital gain after indexation. - Decided against assessee. Non inclusion of securities transaction tax [STT] as a deduction in computing the book profit under Section 115JB - Held that:- Here we agree with the contention of the learned counsel, because the assessee in the Profit & loss account has credited the net gain after net off of STT of ₹ 25,65,015/-. Thus, the STT amount will not be included in the computation of book profit and only the net gain of ₹ 1,90,39,06,630/- shall alone be taken into account. - Decided in favour of assessee.
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