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TMI Blog2022 (5) TMI 1262X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the applicability of provisions of section 115JB has been withdrawn by the Finance Act, 2011 by inserting a proviso to section 115JB(6) The year under consideration is A.Y: 2005-06 and therefore this benefit is available to assessee. We therefore hold that, authorities below were not justified to include the book profit in respect of SEZ/STPI unit of the assessee, while computing book profit u/s.115JB of the Act for year under consideration. Therefore, we reverse the orders of authorities below by holding that income relating to SEZ/STPI unit is to be excluded while computing book profit u/s.115JB of the Act for assessment year 2005-06. - Decided in favour of assessee. - ITA No. 1191/Bang/2010 - - - Dated:- 4-4-2022 - SHRI. CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER Assessee by : Shri Padamchand Khincha, CA Revenue by : Dr. Manjunath Karkihalli, CIT DR ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal arises out of order dated 04/06/2020 passed by Hon ble Karnataka High Court in ITA number 87 of 2012. Brief facts of the case are as under: 2. The assessee is engaged in the business of manufacture, trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thereafter, adjustments have to be made. This Tribunal further held that assessee cannot adjust the book profit except as provided under the Companies Act, and in the instant case, assessee is trying to compute the brought forward losses under the income tax provisions and not under the Companies Act, which is not permissible. The Tribunal thus dismissed the appeal filed by assessee. Aggrieved by the order of this Tribunal, assessee filed appeal before Hon ble Karnataka High Court. Hon ble Court on considering the submissions of assessee or observed and held as under: 7. We have considered the submissions made on both the sides and have perused the record. The supreme court in APOLLO TYRES LTD., supra had an occasion to deal with provisions of Section 115J of the Act and while taking into account the budget speech of the then Finance Minister made in parliament at the time of introducing the said section held that the income tax authorities were unable to bring certain companies within the net of income-tax because these companies were adjusting their accounts in such a manner as to attract no tax or very little tax. It was further held that with a view to bring such comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter to the tribunal for decision afresh has become imperative. It is therefore, not necessary for us to deal with the substantial questions of law framed by this court. In view of the preceding analysis, the order passed by the Income Tax Appellate Tribunal is hereby quashed and the matter is remitted to the tribunal for decision afresh in accordance with law. In the result, the appeal is disposed of. The questions of law framed by the Hon ble High Court are as under: (i) Whether on the facts and in the circumstances of the case, the honourable tribunal was right in law in not allowing deduction of brought forward loss or unabsorbed depreciation relating to non-STPI units in computing book profits under Section 115JB? (ii) Whether on the facts and in the circumstances of the case, the honourable tribunal was right in law in adjusting the past profits of the STPI units from the brought forward loss or unabsorbed depreciation relating to non-STPI units and thus not allowing reduction of the brought forward loss or unabsorbed depreciation relating to non-STPI units while computing the book profits under Section 115JB? (iii) Whether on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that, there are various decisions has held that, the book profits as computed under the relevant provisions of Companies Act cannot be interfered with. The Ld.CIT.DR thus submitted that, profit and loss of both 10A and non-10A units, together, have to be computed for making adjustment, to the brought forward losses or unabsorbed depreciation, whichever is lower, for the purposes of computation under section 115 JB of the Act. We have perused submissions advanced by both sides in light of records placed before us. 11. Section 115JB stipulates that, computation under the section should start from accounts prepared under the Companies Act for the relevant previous year. But, that is only for the purpose of working out net profit under sub section (2). The net profit so determined, then has to be modified by increasing /reducing as per Explanation 1 subclasses (a) to (f) and clauses (i) to (viii) respectively. 12. The Finance Act, 2007 amended section 115JB with effect from 2008-09 for bringing the amount of income to which provisions of section 10A or 10B apply within the purview of MAT. Section 10A / 10B of the Act provides tax incentive to units located in certain speci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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