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2006 (9) TMI 226 - AT - Income TaxMinimum Alternate Tax - Profit & Loss Account - adjustments in net profit - Payment towards additional advisory fee - write offs/provision - accounting standards application - HELD THAT:- Having adopted the figure of Rs. 660.81 lakhs as the starting point, the same has to be increased by the items specified in clauses (a) to (f) and has to be reduced by the items specified in clauses (i) to (vii) given in the Explanation. No other adjustment is permitted by law and also as laid down by the Supreme Court in the case of Apollo Tyres Ltd.[2002 (5) TMI 5 - SUPREME COURT]. None of the clauses given in the Explanation provide for the increase or decrease of the book profits by extraordinary items. The reference to AS-5 by the ld DR does not in any manner advance the case of the revenue. It merely says that prior period and extraordinary items should be separately disclosed along with their nature so that their impact on the operating results can be perceived. It does not say that they are not part of the Profit & Loss Account. Similarly, the Guidance Note issued by the ICAI also does not help the revenue as it merely says that sometimes, Appropriation Account is included as a separate section of the Profit & Loss Account. But, as we have seen earlier, Parts-II and III of Schedule-VI to the Companies Act do not speak of Appropriation Account at all. Thus, we are convinced that it was in accordance with law for the assessee to have taken Rs. 978.55 lakhs as the base figure to compute the book profits for the purposes of section 115JE. In the result, the appeal of the assessee is partly allowed.
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