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2012 (10) TMI 675 - ALLAHABAD HIGH COURTClaim of investment allowance under Section 32-A - disallowance on increase in the actual cost of assets due to foreign exchange fluctuations - Held that:- As decided in CIT v. Arvind Mills (1991 (12) TMI 1 - SUPREME COURT) in which it was held that the increase or decrease in liability arising on account of fluctuation in the foreign exchange rate should be taken into account to modify to figure of actual cost and that such adjustment should be made in the assessment year in which the increase or decrease in the liability arises on account of fluctuations in the rate of exchange. The adjusted actual cost is to be taken as the actual cost for all purposes other than for the grant of development rebate. Clause (1) of Section 43-A of the Act grants the benefit of adjusted cost on account of fluctuation in the foreign exchange rate - in favour of assessee. Deductions under Section 80 HHC - disallowance as no export profit u/s 80 HHC after taking into account the provisions of Section 80AB - section 80AB had no application in determining the amount deductible under Explanation (iii) of section 115-J - Held that:- The AO while adopting the book profit under Section 115J as the total income allowable to tax, reduced the profit for the year amounting to Rs. 6, 90, 92, 303/- to Nil after setting out the brought forward losses/allowances to that extent. The balance brought forward allowance was carried forward to the subsequent years. In appeal it was held that the unabsorbed business losses, unabsorbed depreciation and unabsorbed investment allowance should be taken to be set off only to that extent which is sufficient to bring down the income computed under the normal provisions of the Act to the level of Section 115J income. And the AO was directed to increase the amounts of unabsorbed losses by the income computed under Section 115J income. The Tribunal upheld the order. Thus not agreeing with the submissions of revenue, that Section 80AB has overriding effect and will prevail over Section 80HHC. Section 80AB provides for deductions to be made with reference to the income included in the gross total income. Section 80HHC provides for deduction in respect of profits retained for export business. Although both the sections fall in Chapter VIA, they have to be applied independently - in favour of assessee Interest under section 234-B and 234-C - taxable income was determined under section 115-J - Held that:- As decided in CIT v. Rolta India Ltd [2011 (1) TMI 5 - SUPREME COURT OF INDIA] The pre-requisite condition for applicability of Section 234B is that assessee is liable to pay tax under Section 208 and the expression “assessed tax” is defined to mean the tax on the total income determined under Section 143(1) or under Section 143(3) as reduced by the amount of tax deducted or collected at source. Thus, there is no exclusion of Section 115-J/115-JA in the levy of interest under Section 234-B - against assessee.
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