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TMI Blog2016 (12) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... while calculating the MAT under Section 115JB - Held that:- The provisions of Explanation 1(viii) of Section 115JB(1)define book profit to mean the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by the amount of deferred tax, if any such amount is credited to the profit and loss account. Thus, we will assume that the deferred tax was to be included while computing the MAT under Section 115JB. However, the CIT (Appeals) and the Tribunal deleted the penalty, inter alia, on account of the fact that sub-clause (viii) was introduced in the year 2008 with retrospective effect from 01.04.2001 i.e. before the return was filed for the assessment year 2007 with which we a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Direct Taxes ignoring the vital fact of the issue that the penalty has been imposed on adjustment made in the income computed for the purpose of MAT and the circular itself is very clear that penalty imposition will depend upon the nature of adjustment? (iii) Whether in the facts and circumstances of the case and in law the Hon ble ITAT was right in deleting the penalty under section 271(1)(c) on issue of reduction of deferred tax from net profit for the purpose of arriving at book profit for MAT on the plea that the amendment to Section 115JB of the Act was made after the assessee had filed ITR, when it was outrightly incorrect to reduce the amount of deferred tax from net profit which was never credited to the P L Account? (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim while calculating the MAT under Section 115JB of the Act. The assessee reduced the calculation to the extent of the deferred tax of about Rs. 3.36 crores. The quantum appeal in this regard has been decided against the assessee. The question, however, is whether in these circumstances the respondent ought to be visited with a penalty. 5. Both the appellate authorities have held that there is no warrant for doing so. The provisions of Explanation 1(viii) of Section 115JB(1) of the Act define book profit to mean the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by the amount of deferred tax, if any such amount is credited to the profit and loss account. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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