The Jaipur bench of Income Tax Appellate Tribunal ( ITAT ) in Assistant Commissioner of Income Tax versus M/s Om Metal Infraproject Ltd, held that Income being a share in AOP or BOIs is to be excluded while computing book profit under section 115JB of the Income Tax Act.
The sole issue in instant case was Assessing officer noted certain amount deducted as share of profit of joint ventures from the profit of Assessee which is not permissible under section 115JB of the Act.
According to AO, as per the terms under section 115JB only income under Section 10 of the Act which is credited to the P&L account, shall be deducted while computing the book profit. However, AO made addition.
The Assessee challenged the same before first appellate authority by pressing the retrospective relevance brought in the provisions of Section 115JB by inserting Clause (iic) to explanation (1) is remedial in nature.
On the counterpart the counsel for revenue raised the aforesaid retrospective effect as irrelavant and pressed the decision of Hyderabad benches of Tribunal and also relied upon the decision of Hon’ble Supreme Court in the case of CIT Vs. Vatika Township P. Ltd.
The bench including judicial member Vijay Pal Rao and accountant member Vikram Singh Yadav heard the rival submission and observed as “no income tax is chargeable on the total income of the association of persons or body of individuals then the share of a member shall be chargeable to tax as part of his total income and the benefit of Section 86 shall not be available to the member of association or body.”
The tribunal dismissed the appeal of Reveue and restored the decision of CIT (A) and also the decision of Mumbai bench of tribunal in the case of M/s Goldgerg Finance Pvt. Ltd. Vs ACIT where it has been held that share of member of an AOP, on which no income tax is payable in accordance with the provision of section 86 of the Act, should be excluded under section 115JB of the Act.
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