Frency and Falak Tyres Limited, an Indian Company engaged in the manufacture of Tyres in Gujrat, has adopted Ind AS from 1-4-2020. The following particulars are provided for the year ended 31-3-2025: Net profit as per st

Computation of Book Profit of Frency and Falak Tyres Ltd. u/s 115JB for A.Y. 2025-2026 Particulars Amount (₹) Amount (₹) Net profit as per statement of Profit and loss 18,00,00,000 Add: Net profit to be increased by the following amounts as per explanation 1 to section 115JB(2): - Depreciation 15,00,00,000 - Provision for the loss of subsidiary company 5,40,00,000 - Provision for gratuity based on actuarial valuation [Provision for gratuity based on actuarial valuation is an ascertained liability. Hence, the same should not be added back to compute book profit.] Nil - Provision for Income Tax [As per Explanation 2 to section 115JB, income-tax shall include, inter alia, any interest charged under the Act, therefore, whole of the amount of provision for income-tax including ₹3 lakh towards interest payable has to be added] 72,00,000 - Interest charged for delay in remittance of TDS [As per Explanation 2 to section 115JB, income-tax shall include, inter alia, any interest charged under the Act. Therefore, interest on delay in remittance of TDS has to be added back] 20,00,000 - Interest to a Public Financial Institution [It is only the specific items mentioned under Explanation 1 to section 115JB, which can be adjusted from the net profit as per the Statement of Profit and Loss prepared as per the Companies Act for computing book profit for levy of MAT. Since the following items are not specified thereunder, the same cannot be adjusted for computing book profit.] Nil Total 21,32,00,000 39,32,00,000 Less: Net profit to be decreased by the following amounts as per Explanation 1 to section 115JB(2): - Depreciation other than depreciation on revaluation of assets [₹15 crore - ₹2 crore] 13,00,00,000 - Share income from Association of Persons [Share income of company in AOP has to be reduced while computing the book profit, since no income-tax is payable by the company on share income in AOP, as the AOP is chargeable to tax at Maximum Marginal Rate] 62,00,000 - Profit from unit established in special economic zone [As per proviso to section 115JB(6), the profits from unit established in special economic zone cannot be excluded while computing the book profit, and hence, such income would be liable for MAT] Nil - Amount withdrawn from revaluation reserve [To the extent it does not exceed depreciation on revaluation of assets ₹ 4 crore - ₹ 2 crore] 2,00,00,000 - Dividend from Indian companies [Amount not deducted for calculating MAT Profit] Nil - Short term capital gains on Sale of Listed Equity Share [Amount not deducted for calculating MAT Profit] Nil - Brought forward business loss of ₹7 crore [2 crore + 5 crore] and unabsorbed depreciation of ₹5 crore [3 crore + 2 crore] [Since Frency and Falak Tyres Limited is a company against which an application for corporate insolvency resolution process has been admitted by NCLT under section 7 of the Insolvency and Bankruptcy Code, 2016, the amount of total loss brought forward (including unabsorbed depreciation) is allowed to be reduced from the book profit for the purposes of levy of MAT under section 115JB] 12,00,00,000 Total (27,62,00,000) Book profit computed in accordance with Explanation 1 to section 115JB(2) 11,70,00,000 Add: Items credited to OCI that will not be reclassified to profit or loss: - Re-measurement of defined employee benefit plan 30,00,000 - Revaluation surplus of property, plant and equipment ₹1 crore [Book profit not to be increased by revaluation surplus for assets] Nil Total 30,00,000 12,00,00,000 Add: One-fifth of Transition amount [Credit Balance] Transition amount 5,00,00,000 Less: Amounts to be excluded from transition amount Capital Reserve (50,00,000) 4,50,00,000 One-fifth of ₹4,50,00,000 90,00,000 Book Profit for levy of MAT 12,90,00,000