115JB

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vipin (Querist)
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14 July 2010 All experts are requested to put light on following matter:
Since A.O. does not have authority to redraft P/L A/C except 8 Addition & 8 reductions specified.
Now a assessee liable to tax under MAT does a tax planning & LTCG are directly credited to R&S instead of P/L to avoid taxation.
Assessee also contravene the schedule VI by crediting LTCG dirctly to R&S.
However Assessee says at the most only AUDITOR can qualify the report & also A.O. has no authority to redraft according to schedule.
PLEASE ANSWER CONSIDERING THE MATTER & WHAT IF SCHEDULE IS NOT COMPLIED WITH w.r.t INCOME TAX LIABILITY.
PLEASE ANSWER WITH REASON

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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14 July 2010 Yes i agree with you that AO does not have right to rewrite books of A/c but if there is any expense or income which should be considered for taxation purpose then he can put a question mark there. He can not make the changes in the amount which is shown in the P & L A/c but if anything which is a income then he has a right to add it to the total income of the assessee.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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14 July 2010 For purposes of computing book profits under section 115J, the assessee must consider capital gains also while calculating the total income.
CIT v. Veekaylal Investment Co. (P.) Ltd. [2001] 249 ITR 597 (Bom.).

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Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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15 July 2010 A.O. does not have authority to redraft P/L A/C however he can disallow the deduction excess or wrongly claim and include in taxable profit income ought to have included.