25 October 2012
Hi al, The company has capital gains in its books. FOr tax purposes this would be subject to indexation resulting in capital loss. But while computing MAT this amount would get taxed along with book profits. The same amount is taxed is MAT is applicable and exempted as per IT Act. Is this correct?
28 October 2012
Please note that section 115JB starts with non obstante clause, therefore, notwithstanding anything contained in any other provision of IT Act, section 115JB shall have overriding effect. In computation of book profit for the purpose of MAT, only expl. 1 to section 115JB shall be considered, therefore, whether or not net profit as per books include capital gains or house property income or other source income book profit shall be computed only after adjustments as provided under that explanation even the same income is exempt under the normal provisions of this Act or the same expenses is not deductible under the normal provisions of this law. Hence, capital gains as per books shall be considered while computing book profit even they are exempt under the normal provisions of the law or there is loss under the normal provisons of the law. MAT applies on total income of the company and not only on business income....
CAclubindia
