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Informative

Partnership Firm Losses Cannot be Added Back in Book Profit Calculation u/s 115JB:ITAT

Update / Judgement Date

14 Aug 2025

Source

Taxscan

Author

Team — WCP Legal Desk

Reading Time

1 min read

Income TaxOther Legal Matters

The ITAT ruled that losses from a partnership firm cannot be added back while computing a partner’s book profit for tax purposes. This interpretation aligns with the scheme of Section 40(b) and ensures that only admissible adjustments affect book profit computation. The judgment offers clarity for taxpayers engaged in partnership structures. (Word count: ~98)