2009 (4) TMI 35 - HC - Income Tax

Assessing Officer is not entitled to touch the profit and loss account prepared by the assessee as per the provisions contained in the Companies Act, while arriving at the book profit u/s 115J and the book profit so arrived at should be the basis for taxation and therefore, the computation u/s 80HHC should be limited to the case of profits of eligible category only therefore, Tribunal was right in law in holding that deduction u/s 80HHC in a case of MAT assessment is to be worked out on the basis of the adjusted books profits u/s 115JA revenue appeal dismissed

Summary

In the case of High Court MADRAS HIGH COURT Citation: 2009 (4) TMI 35 - MADRAS HIGH COURT, the appellant, a Public Limited Company, filed an appeal against the Income Tax Appellate Tribunal's order for the assessment year 1998-99. The issue revolved around the deduction under Section 80HHC in a case of Minimum Alternate Tax (MAT) assessment. The Commissioner revised the order under Section 263 of the Income Tax Act, stating that the deduction should be allowed in reference to the 'profits of the business' as defined in clause (baa) to Explanation of Section 80-HHC. The Tribunal set aside the Commissioner's order, stating that the Assessing Officer's view was not unsustainable in law. The High Court analyzed the issue and referred to a previous case to conclude that the deduction under Section 80HHC should be based on the profit ascertained under Section 115JA. The Court dismissed the appeal, stating that the Commissioner's view was impermissible in law. The judgment highlighted the importance of following quasi-judicial discipline and respecting the hierarchy of decisions. The Court's decision was in favor of the revenue. The detailed judgment provided a comprehensive analysis of the legal issues involved in the case, emphasizing the interpretation of relevant sections of the Income Tax Act and the application of legal principles to the matter at hand. The judgment provided a thorough examination of the facts, arguments, and legal precedents to reach a well-reasoned conclusion.