2012 (6) TMI 839 - AT - Income Tax

Summary

Issues involved: Appeal against direction to allow deduction u/s 10B from income computed u/s 115JB for assessment year 2005-2006.

Summary:
The Revenue appealed against the direction of the CIT(A) to allow deduction u/s 10B from income computed u/s 115JB. The assessee reduced the amount deductible u/s 10B from the computation of book profit u/s 115JB. The Assessing Officer rejected this claim as no claim u/s 10B was made in the normal computation. The CIT(A) accepted the claim, leading to the appeal.

The Explanation 1 to section 115JB provides the mechanism for computing "book profit." It specifies that if the amount eligible for deduction/exemption under certain sections is credited to the profit and loss account, it should be reduced from the profit for computing "book profit." In this case, the Revenue did not dispute that the amount deductible u/s 10B was credited to the profit and loss account. Therefore, the CIT(A) was correct in allowing the deduction u/s 10B. The Tribunal upheld the decision of the CIT(A) and dismissed the appeal.

The appeal was dismissed, and the order was pronounced on June 6, 2012.