The Income Tax Appellate Tribunal (ITAT), Mumbai held that the procurements towards the Book Profit not applicable during no income tax payable on the normal procurements of the Act.
The taxpayer is the owner of Batliboi Limited is a public ltd firm that makes machine tools, textile machines, Air conditioning & Refrigeration work, Casting & Job work for Air Conditioning and Humidification, Air Control Equipment, and Trading in Engineering goods.
The problem arises in the case through the taxpayer is towards the non-taxability of the receipt of Rs 4,27,43,000 from the welfare trusts through the taxpayer firm while calculating book profits under section 115JB of the Act even if this was credited through it in its profit and loss record.
Read Also: Income Tax Appellate Tribunal (ITAT), Mumbai
The two judges Pavan Kumar Gadale and M.Balaganesh stated that the receipt of Rs 4,27,43,000 through the taxpayer company taken from the welfare trusts is the capital receipt not entitled to the income tax. Thus the receipt which from its start does not come beneath section 2(24) of the Act will not be payable under section 115JB of the act indeed.
Thus the appellate despite permitting the taxpayer ruled that the sum of Rs 4,27,43,000 be the capital receipt and not entitled to be taxed during calculating books profits under section 115JB of the Act.
