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2017 (9) TMI 186 - HC - Income TaxMAT Computation - Appeal deserves admission on the following two substantial questions of law (i) Whether on the facts and in the circumstances of the case and in law, the Hon ble ITAT was justified in deleting adjustment of ₹ 1,48,32,122/made in book profit u/s.115JB of the IT Act, 1961? (ii) Whether on the facts and in the circumstances of the case the Hon ble Tribunal was right in its interpretation of the subclause (f) of Explanation 1 of Section 115JB wherein it has held that the provisions of Section 14AA cannot be imported into Section 115JB while computing book profits?
Issues:
1. Disallowance of interest and other expenses for the Assessment Year 2008-09. 2. Assessment of book profit under Section 115JB of the Income Tax Act, 1961. Analysis: 1. The High Court, after hearing arguments from both parties, found that the questions proposed regarding the disallowance of interest and other expenses were not substantial questions of law. The Tribunal had previously determined that the interest on Bonds issued by the assessee could not be disallowed in isolation. The Tribunal considered the history of borrowings and replacements with Bonds, concluding that the disallowance of interest in this case cannot be upheld. Additionally, the Tribunal found no error in allowing the appeal of the assessee regarding other expenses. The Court dismissed the appeal concerning these issues as it did not raise any substantial question of law. 2. However, the Court decided to admit the appeal on the assessment of book profit under Section 115JB of the Income Tax Act, 1961. Two substantial questions of law were identified for consideration. Firstly, whether the Tribunal was justified in deleting an adjustment made in book profit under Section 115JB. Secondly, whether the Tribunal was correct in its interpretation that the provisions of Section 14AA cannot be imported into Section 115JB while computing book profits. The Court directed the Registrar to summon the original record for inspection and further proceedings, indicating that the appeal would be heard along with similar cases.
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