If we start with PBT, then Working Capital changes (changes in current assets/ liabilities) which are also part of cash flow from operations is also adjusted accordingly due to advance taxes/ tax liabilities being in nature of current assets/liabilities.
If we start with PAT, then it is not the case and thus the net impact is same in both cases.
In your eg, for instance, if we start with PBT then we have basically made an adjustment to PAT in nature of adding back taxes -and this adjustment must have a double entry nature which is that advance tax asset is reduced by way of adjustment in cash flow workings but;
if we start with PAT then no adjustment is made to profit (ie we have not added back taxes) and hence advance tax is not reduced, and hence increase in assets to account of increase in advance taxes is there in changes in WC in cash flow from operations and this has impact of reducing the cash flow.
You can refer my earlier post as well (although it may be confusing – it is mere presentation, no impact on cash flow from operations imo)
disc : not invested, possibility exists that I may be wrong
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