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IN THE INCOME TAX APPELLATE TRIBUNAL

“F” BENCH MUMBAI

BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT &

SHRI MAKARAND V MAHADEOKAR, ACCOUNTANT MEMBER

ITA No. 6017/Mum/2025

A.Y:2013-14

ACIT, Circle – 3(2)(1) Vs. Sol Entertainment Pvt Ltd

Room No. 608, 6th floor, 903-904, 9th floor, Aayakar

Aayakar Bhavan, MK Bhavan, MK Road,

Road, Churchgate, Churchgate, Mumbai

Mumbai – 400020.

PAN/GIR No.AAPCS6369A

(Applicant) (Respondent)

Assessee by Shri Ramesh Kadam

(Accountant of the company)

Revenue by Shri Aniket Tewari, Sr. DR

Date of Hearing 04.03.2026

Date of Pronouncement 05.03.2026

आदेश / ORDER

PER MAKARAND V MAHADEOKAR, AM:

This appeal by the Revenue is directed against the order

passed by the Commissioner of Income Tax (Appeals), National

Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as

―CIT(A)‖], dated 07.07.2025, passed under section 250 of the

Income-tax Act, 1961[hereinafter referred to as ―the Act‖], for

Assessment Year 2013-14, arising from the assessment order

passed by the Income Tax Officer, Ward-11(2)(3), Mumbai

[hereinafter referred to as ―Assessing Officer‖]under section 143(3)

of the Act dated 31.03.2016.

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ITA No. 6017/Mum/2025

Sol Entertainment Pvt Ltd, Mumbai

The Revenue has raised the following grounds:

(i) Whether on the facts and circumstances of the case and in

law, the Ld. CIT(A) is justified in deleting the reworking of book

profit u/s 115JB of Income Tax Act, 1961 made by the AO by

adding the revaluation reserve of Rs. 4,52,00,000/- without

appreciating the facts that the assessee company has shown

the financial status resulting to positive figures by adding

revaluation reserve and share premium but same time the

assessee failed to add back the same while computing the book

profit under the provisions of section 115JB of the Act.

(ii) The Appellant craves leave to add, amend and/or vary the

grounds of appeal before or during the course of hearing.

2. The assessee is a company, engaged in the business of gaming

and entertainment. The assessee filed its return of income for the

A.Y 2013-14 on 28.09.2013 declaring loss of Rs. (-) 1,43,25,343/-.

The case was selected for scrutiny and statutory notices under

sections 143(2) and 142(1) were issued and served upon the

assessee. The assessment was completed under section 143(3) of

the Act. The Assessing Officer made the following adjustments:

i. Disallowance under section 36(1)(va) in respect of delayed

deposit of employees’ contribution to PF and ESIC amounting

to Rs. 12,18,673/-

ii. Disallowance of proportionate business loss amounting to Rs.

57,76,633/- on account of change in shareholding pattern.

iii. Addition of revaluation reserve under section 115JB

amounting to Rs. 4,52,00,000/- while computing book profit.

3. The present appeal of the Revenue concerns only the third

issue relating to computation of book profit under section 115JB.

4. During the course of assessment proceedings, the Assessing

Officer observed that the assessee had adjusted accumulated losses

against revaluation reserve and share premium. The Assessing

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ITA No. 6017/Mum/2025

Sol Entertainment Pvt Ltd, Mumbai

Officer reproduced the following working from the financial

statements:

5. The Assessing Officer held that the assessee had shown

positive financial status by recognizing revaluation reserve and

share premium but had not added the same back while computing

book profit under section 115JB. Accordingly, relying on the

decision of the Hon’ble Supreme Court in Indo Rama Synthetics

(India) Ltd. v. CIT (2011) 333 ITR 18 (SC), the Assessing Officer

recomputed book profit as under:

Loss as per profit and loss account: Rs. 1,36,42,402/-

Add: Revaluation reserve: Rs. 4,52,00,000/-

Book p