Agricultural Land Income Exempted from Tax cannot be Added to Book profits u/s 115 JB of Income Tax Act: Delhi HC

The Delhi High Court recently ruled that agricultural land income, which is exempt from tax, should not be included in the calculation of book profits under Section 115JB of the Income Tax Act. This decision was made while dismissing an appeal by the Income Tax Department. The Court determined that such exempt income does not qualify as “income” for the purpose of determining book profits, aligning with the principle that exempt income should not be taxed again under different provisions of the Act. This ruling underscores the distinction between taxable income and exempt income in financial reporting and compliance.