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2012 (9) TMI 36 - AT - Income TaxReduction of profit eligible for deduction u/s 80HHC while computing book profits u/s 115 JB dis-allowance of deduction on ground that profit eligible for deduction u/s 80HHC are nil after adjusting brought forward business loss and depreciation under normal provisions of the Act - Held that - Supreme Court in the case of M/s Bhari Information Tech Systems Pvt. Ltd.(2011 (10) TMI 19 - SUPREME COURT OF INDIA), held that profit eligible for deduction u/s 80HHC for the purpose of reduction u/s 115JB is required to be computed on the basis of book profit and, therefore, brought forward loss/unabsorbed depreciation are not required to be adjusted. The said judgment of Supreme Court had been delivered prior to the impugned order of the Tribunal and even if the judgment had been referred subsequent to the order of the Tribunal, an issue covered by the judgment of the Jurisdictional High Court or the Apex Court whether rendered prior or subsequent to the order will be valid ground for an apparent mistake in the order from record as held in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd.(2008 (9) TMI 11 - SUPREME COURT). AO directed to compute the book profit accordingly. Since order is already amended and aforesaid claim of assessee is allowed on merit. Therefore, there is no apparent mistake in the order of the Tribunal in which the ground relating to legal validity of assessment / re-opening has been dismissed as having become infructuous Decided in favor of assessee.
Issues:
1. Amendment of the order for assessment year 2003-04 in ITA No.7239/M/10. 2. Reduction of profit eligible for deduction under section 80HHC while computing book profits under section 115 JB. 3. Validity of re-opening of the assessment under section 147 and the notice under section 143(2). Analysis: Issue 1 - Amendment of the Order: The assessee filed a miscellaneous application seeking an amendment to the order dated 21.12.2011 for assessment year 2003-04. The Tribunal had earlier disposed of the appeals for assessment years 2003-04, 2004-05, and 2005-06 collectively, addressing a common dispute regarding license and technology fee in favor of the assessee. Issue 2 - Reduction of Profit Eligible for Deduction under Section 80HHC: In the assessment year 2003-04, the dispute centered around the reduction of profit eligible for deduction under section 80HHC while computing book profits under section 115JB. The Tribunal distinguished the judgment of the Hon'ble Supreme Court in a previous case and held that the profit eligible for deduction under section 80-HHC should be computed after setting off brought forward business loss and unabsorbed depreciation. As there was no profit left after these adjustments, no reduction was necessary for section 80HHC in the said assessment year. Issue 3 - Validity of Re-opening of Assessment: Additionally, the appeal for the assessment year 2003-04 included a ground on the validity of re-opening the assessment under section 147 and the notice under section 143(2). The Tribunal, based on the allowance of the assessee's claim on merit, deemed it unnecessary to delve into this legal issue, thus dismissing it as inconsequential. Detailed Analysis: The assessee contended that the profit eligible for deduction under section 80HHC for computing book profit should not require adjustments for brought forward business loss and unabsorbed depreciation, citing a recent judgment of the Hon'ble Supreme Court. The Tribunal, after thorough consideration, acknowledged the relevance of this judgment and amended its previous order accordingly, directing the Assessing Officer to compute the book profit based on this interpretation. In conclusion, the miscellaneous application of the assessee was allowed, addressing the issues raised regarding the computation of profit eligible for deduction under section 80HHC and the subsequent adjustments while computing book profits under section 115JB. The Tribunal's decision highlighted the significance of recent legal precedents in interpreting and applying tax laws to ensure accurate assessments and fair treatment of taxpayers.
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