Relief to Mahindra & Mahindra Ltd, AO Has No Jurisdiction to Alter Net Profit in P & L Account Except Under S. 115J of Income Tax Act: Bombay HC

In a relief to Mahindra & Mahindra Ltd, the Bombay High Court has ruled that an Assessing Officer (AO) does not have the jurisdiction to alter the net profit shown in a company's audited Profit and Loss (P&L) account for the purpose of calculating Minimum Alternate Tax (MAT) under Section 115J of the Income Tax Act. The court held that the AO's power is limited to making only those specific adjustments to the book profit that are explicitly listed in the explanation to Section 115J. The AO cannot conduct a detailed scrutiny of the P&L account and re-compute the net profit based on their own assessment. This judgment upholds the principle that for MAT purposes, the starting point must be the net profit as certified by the auditors and approved by the company's shareholders.