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2014 (9) TMI 1190 - AT - Income TaxAssessment of AOP - MAT computation u/s 115JB - Share of assessee's income in two AOPs while computing book profit u/s.115JB - Exemption u/s.10(2A) - entitled for exemption u/s.86 in respect of share income received from two AOPs - AO did not allow exemption u/s.86 on the plea that the profit of AOPs were eligible for deduction u/s.80IB(10) - HELD THAT:- We are not in agreement with the finding of the lower authorities that since both the AOPs have claimed deduction u/s.80IB(10), the assessee's share of income in these AOPs will not be eligible for exemption. It may be noted that Section 67A provides "method for computing a member's share in income of association of persons or body of individuals". The income of the member company of the AOP is to be computed as per Section 67A of the Income Tax Act and the Income tax authorities cannot go beyond the provisions of Section 67A of the Act. U/s.86, whatever the share of the member company is computed u/s.67A of the Act, is deductible/will not be chargeable to tax, subject to the proviso to Section 86. So the income of the AOP is to be computed as per the provisions of the Act and the member's share is to be computed as per the provisions of Section 67A of the Act and not otherwise. We accordingly set aside the order of the lower authorities and restore the matter to the file of the AO to work out the total income of the assessee as per the provisions of Section 67A read with provisions of Section 86. Here, it is pertinent to mention that computation of share of the assessee will be dependent upon the final determination/computation of total income of the AOP. If the AOP will not be allowed deduction u/s.80IB, there will be enhancement in the share of the assessee to be computed u/s.67A of the Act. Hence, it is directed that the AO will also take into consideration the total income computed of the concerned AOPs while computing share of the assessee company. AO has also brought to net of tax its book profit which included share of profit in two AOPs as per provisions of Section 115JB - No merit in the AR's contention insofar as Section 115JB has been brought in statute to tax the book profit shown in the books of account as Part II & Part III of Schedule VI of the Companies Act. It is not the case of the assessee that share of income of AOP has not been credited in the P&L account as per Part II & Part III of the Schedule VI of the Companies Act. Since the profit and loss account so prepared has been approved by the Board of Director of assessee company, there is no reason to exclude the profit credited in the P&L account in respect of share of assessee's income in two AOPs while computing book profit u/s.115JB. Accordingly, ground raised by assessee with regard to exclusion of such income while computing book profit u/s.115JB is not tenable.
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