Short Overview: By virtue of clause (iic) in Explanation to section 115JB by the Finance Act, 2015 share of profit received from AOP could not be added while computing book profit under section 115JB.

AO while computing book profit under section 115JB made addition of share of profit received by assessee in the capacity of member of AOP. Assessee challenged this.

It is held that the mischief which had been sought to be remedied by way of insertion of clause (iic) in explanation 1 to section 115JB by the Finance Act, 2015 was that share income of member of AOP which was not otherwise taxable in terms of section 86 was getting taxed under MAT while computing book profit. This was also never the purpose of section 115JB to tax any income or receipts not otherwise taxable under the Act. Therefore, remedy brought by amendment to remove the disparity and to curb the mischief had to be reckoned as curative in nature and hence, applicable retrospectively. Accordingly, addition was deleted. However, AO was directed to verify whether income or any part of the income of AOP could be assessed in the hands of assessee in terms of section 67A.

Decision: In assessee’s favour