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Transitional liabilities disclosed in notes to accounts to be adjusted while computing book profit u/s. 115JB

September 11, 2019[2019] 111 taxmann.com 453 (Kolkata - Trib.)/[2020] 180 ITD 464 (Kolkata - Trib.)

INCOME TAX: Transitional liabilities of gratuity and leave encashment as per provisions of AS-15, which were disclosed in Notes appended to accounts should be adjusted while computing book profit under section 115JB

INCOME TAX: Section 14A disallowance is not considered while computing book profit under section 115JB

INCOME TAX: Where in consonance with AS-19, lease rent expenditure was recognized on straight-lining basis, which led to creation of additional lease rental liability in relevant assessment year, it would be deductible while computing profits of business

INCOME TAX: Incremental liability on account of lease rental equalization provided for pursuant to adoption of AS-19 having accrued during relevant previous year was allowable deduction in computing income for said year, notwithstanding that such liability may relate to earlier years

INCOME TAX: VAT payment made by assessee at time of transfer of trademark is allowable as deduction u/s 48

INCOME TAX: No disallowance u/s 43B if employees' share of contribution towards PF and ESI is paid before due date of filing return

INCOME TAX: Where assessee's factory was located on river bank, depreciation was allowable on cost of river bank embankment and renovation thereof

INCOME TAX: Royalty paid for availing technical know-how and technical expertise and use of brand so owned by provider was allowed as revenue expenditure

INCOME TAX: Adjustment in respect of prior period items comprising of impact of lease rent equalization and gratuity expenses of earlier years should be made, while computing book profit under section 115JB

INCOME TAX: No TP adjustment could be made where arm's length value of transactions as computed by TPO was within permitted range of variation of +/- 5 per cent of actual value of transaction

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