9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (9) TMI 304 - HC - Income TaxDeduction u/s 80HHC - deduction in the case of MAT assessment is to be worked out on the basis of profit computed under regular provisions of law applicable to computation of profit and gains of business or profession - whether Tribunal is right in law in holding that in computing book profit under Section 115JB of the Act, the deduction under Section 80HHC should be limited to 30% of profit from export business, as provided under Section 80HHC(1B)? - HELD THAT - The substantial questions of law, which have been framed for consideration, have been answered against the Revenue by the Hon'ble Supreme Court in the case of Ajanta Pharma Ltd. vs. Commissioner of Income-Tax 2010 (9) TMI 8 - SUPREME COURT . The said decision was followed by a Division Bench of this Court in the case of CIT vs. M/s. Bannari Amman Sugars Ltd. 2018 (7) TMI 1845 - MADRAS HIGH COURT to which one of us (TSSJ) was a party as held as held that computation has to be done under the book profits and not under the normal computation.
Issues:
Interpretation of deduction under Section 80HHC for MAT assessment Calculation of deduction under Section 80HHC for book profit under Section 115JB Interpretation of deduction under Section 80HHC for MAT assessment: The appeal under Section 260A of the Income Tax Act, 1961 was filed against the order made by the Income Tax Appellate Tribunal Bench 'A', Chennai for the assessment year 2004-05. The substantial questions of law raised in the appeal pertained to the deduction under Section 80HHC in the case of Minimum Alternate Tax (MAT) assessment. The Hon'ble Supreme Court's decision in Ajanta Pharma Ltd. vs. Commissioner of Income-Tax was cited, where it was established that the deduction under Section 80HHC for MAT assessment should be based on profit computed under regular provisions of law applicable to the computation of profit and gains of business or profession. The Tribunal's decision in favor of the assessee was supported by the Supreme Court's ruling, leading to the dismissal of the Tax Case Appeal against the Revenue. Calculation of deduction under Section 80HHC for book profit under Section 115JB: The legal issue of calculating the deduction under Section 80HHC for book profit under Section 115JB was also addressed in the judgment. The Supreme Court's decision in Ajanta Pharma Ltd. v. Commissioner of Income Tax clarified that the full export profits of 100% are considered "eligible profits" under clause (iv) of Explanation to Section 115JB. It was emphasized that the profits cannot be reduced to 80% as per Section 80HHC(1B). The argument that both "eligibility" and "deductibility" of the profit must be considered together for working out the deduction was deemed meritless by the Court. The judgment established that the decision in Ajanta Pharma Ltd. applied to the case at hand, as similar questions were raised for consideration. The Tribunal's decision in Syncome Formulations (I) Ltd. was confirmed by the Supreme Court in Commissioner of Income Tax v. Bhari Informations Technology System (P) Limited. Consequently, the substantial questions of law were answered against the Revenue, resulting in the allowance of the appeal filed by the assessee and the favorable resolution of the legal issues raised. This detailed analysis of the judgment addresses the interpretation of deductions under Sections 80HHC for MAT assessment and the calculation of deductions under Section 80HHC for book profit under Section 115JB, providing a comprehensive overview of the legal issues and their resolutions as per the Madras High Court's decision.
|
