Appendix C

COMPUTATION OF GROSS PROFITS

[(See rule 25)] Accounting year ending……………

Item Particulars Amount. Of sub- Amount. Remarks

Items Of main

No. Items

Rs. Rs.

(1) (2) (3) (4) (5)

1. Net profit as per profit and loss account

2. Add back provision for :

(a) Bonus to employees

(b) Depreciation.

(c) Direct taxes, including the provision (if any), for

previous accounting years

(d) Development rebate / investment allowance / development

See foot-

allowance reserve.

note (1)

(e) Any other reserves

Total of Item No.2……..

See foot-

note (1)

Rs………………

3. Add back also :

(a) Bonus paid to employees in respect of previous accounting See foot-

years. note (1)

(aa) The amount debited in respect of gratuity paid or payable

to employees in excess of the aggregate of-

(i) the amount, if any, paid to, or provided for payment to,

an approved gratuity fund; and

(ii) the amount actually paid to employees on their retirement or

on termination of their employment for any reason.

(b) Donations in excess of the amount admissible for income-tax .

(c) Any annuity due, or commuted value of any annuity paid, under

the provisions of section 280D of the Income Tax Act during the

accounting year.

(d) Capital expenditure (other than capital expenditure on scientific

research which is allowed as a deduction under any law for the time

being in force relating to direct taxes) and capital losses (other than

losses on sale of capital assets on which depreciation has been

allowed for income tax or agricultural income-tax.).

See foot-

(e) Losses of , or expenditure relating to, any business situated note (1)

outside India.

Total of Item No.3………..

Rs………..

4. Add also income, profits or gains (if any) credited directly

to

reserves, other than-

(i) capital receipts and capital profits (including profits on the sale

of capital assets on which depreciation has not been allowed for

income-tax or agricultural income-tax);

(ii) profits of, and receipts relating to, any business situated outside

India;

(iii) income of foreign concerns from investments outside India.

Net total of Item No.4……..

Rs…………..

5. Total of Item Nos. 1,2,3 and 4… Rs…………..

6. Deduct :

(a) Capital receipts and capital profits (other than profits on the sale See foot-

of assets on which depreciation has been allowed for income-tax or note (2)

agricultural income-tax).

(b) Profits of, and receipts relating to, any business situated

outside

India.

(c) Income of foreign concerns from investment outside India.

See foot-

note (2)

(d) Expenditure or losses (if any ) debited directly to reserves, other

than-

See foot-

note (2)

(i) capital expenditure and capital losses (other than losses on sale

of capital assets on which depreciation has not been allowed for

income-tax ; or agricultural income-tax;

(ii) losses of any business situated outside India.

(e) In the case of foreign concerns proportionate

administrative (overhead) expenses of head office allocable to

Indian business.

(f) Refund of any direct tax paid for previous accounting years and

excess provision, if any, of previous accounting years relating to

bonus, depreciation, taxation or development rebate or

development allowance, if written back.

(g) Cash subsidy, if any, given by the government or by any body See foot-

corporate established by any law for the time being in force or by note (3)

any other agency through budgetary grants, whether given directly

or through any agency for specified purposes and the proceeds of

which are reserved for such purposes.

Total of Item No.6 See-foot-

note (2)

7. Gross Profits for purposes of bonus (Item No.5 minus Item No.6 ) Rs……………

Explanation.— In sub-item (aa) of Item 3, "approved gratuity fund" has the same meaning assigned to it in clause (5) of

section 2 of the Income Tax Act, 1961.

Foot-note:-

(1) If, and to the extent, charged to Profit and Loss Account.

(2) If, and to the extent, credited to Profit and Loss Account.

In the proportion of Indian Gross Profit (Item No. 7) to Total World Gross Profit (as per consolidated Profit

and Loss Account, adjusted as in Item No. 2 above only)