Relief to Bank of Bahrain & Kuwait: ITAT Allows Deduction from Book Profit for Withdrawn Reserves Credited to P&L Account u/s 115JB

The ITAT has granted relief to the Bank of Bahrain & Kuwait by allowing a deduction from book profits for reserves withdrawn and credited to the Profit and Loss (P&L) account under Section 115JB of the Income Tax Act. The case revolved around the computation of book profits for the purpose of calculating Minimum Alternate Tax (MAT). The tribunal held that the reserves withdrawn and transferred to the P&L account should be allowed as a deduction from book profits, thereby reducing the MAT liability. This ruling is important for companies dealing with MAT and clarifies the treatment of reserves in the computation of book profits.