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TMI Blog2024 (2) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... asonable opportunity of hearing in the set aside proceedings. - Dr. Manish Borad, Accountant Member And Shri Anikesh Banerjee, Judicial Member For the Appellant : Shri Nageswar Rao, Advocate For the Respondent : Shri Kiran Chatrapoty, JCIT, Sr. D.R ORDER PER ANIKESH BANERJEE, JUDICIAL MEMBER: The instant appeal of the assessee was filed against the order of Ld. Commissioner of Income-tax (appeals)-22, Kolkata [in brevity ld. CIT(A) ] dated 01.11.2016 passed u/s 250 of the Income Tax Act, 1961 (in brevity the Act ) for assessment year 2004-05. The impugned order was emanated from the order of the ld. ACIT, Circle-11, Kolkata (in brevity the AO ) passed u/s 143(3)/115JB of the Act dated 19.12.2006. 2. Brief fact of the case is if that the appeal of the assessee is originated by pursuing the Miscellaneous Application followed by the order of ITAT, SMC Bench bearing M.A No. 35/Kol/2021 date of order 27.05.2022 . As per the order of the miscellaneous application of the assessee the main application of appeal was recalled and fixed for the hearing before the Bench. By perusing the order, we observed that the assessee has taken the additional ground du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court in the case of CIT vs. Bhari information Technology Systems (Pvt.) Ltd [(2012) 17 taxmann.com 62 (SC)]. Ground 11: Re-computing deduction allowable under section 80HHC of the Act under the MAI without regard to the sub-section (1B) of Section 80HHC On the facts and in the circumstances of the case and in law, the Appellant humbly requests appropriate directions to allow deduction of hundred percent of profits eligible under section 80HHC of the Act under MAT, in view of subsequent decision of the Hon'ble Supreme Court in the case of Ajanta Pharma vs CIT (2010) 327 ITR 0305]. A copy of the judgment is enclosed as Annexure 1. Ground 12: Allowance of deduction under clause (ii) to Explanation 1 of Section 115JB(2) of the Act relating to lower of brought forward business loss or unabsorbed depreciation 12.1 On the facts and in the circumstances of the case and in law, the Appellant prays that appropriate directions be given to the learned AO to allow deduction of lower of the amount of brought forward loss or unabsorbed depreciation as per books of accounts as per the provisions of clause (iii) to Explanation 1 of Section 115JB(2) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Total Income of the assesses, hence not withstanding anything contained in that section for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act ( Before making any deduction under this chapter) shall along be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his Gross Total Income. The Ld. AO reckoned that further to the said provision, it is also noticed that all the section, Chapter-VI including 72 shall have to be taken into consideration to arrive at the Gross Total Income. Hence reduction u/s 80HHC of eligible profit for the purpose of the MAT as provided in explanation- (Iv) to sec, 115JB(2) shall amount to NIL. The Hon'ble Supreme Court in the case of M/s. IPCA Laboratoriesvs. GIT [266 ITR 52] held that section-SQHHC can be allowed only in case of sufficiency of the Gross Total income add not otherwise. As in the case, the Gross Total Income after setting off the unabsorbed Depreciation and business loss will be NIL. Therefore, the claim of the assessee company for reduction from amount of Book Profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided In favour of the appellants, and the same is covered In appellant's favour. Hon'ble Supreme Court in CIT Vs Bhari information Technology Systems (Pvt )Ltd [2012] 17 taxtnanri.com 62 (SC) , by their order dated' 20th October, 2011 have decided the matter [ head notes] as follows; [quote] IT ; Deduction claimed under section 80HHE has to be worked out on basis of adjusted book profit under section ll53A and not on basis of profits computed under regular provisions of law applicable to computation of profits and gains of business Section 1153A, read with section 80HHE of the Income-tax Act, 1961 - Minimum Alternate Tax - Assessment year 2000-01 - Assessee claimed deduction under section 80HHE of Rs. 1,56,33,719 against net profit of Rs. 3,07,84,105 to arrive at book profit of Rs. 1,51,50,386 under section 115JA - Claim for deduction was rejected by Assessing Officer on ground that since in normal computation there was no profit after carry forward loss of earlier years, deduction under section 80HHE for computing book profit under section 1153A was not admissible - In appeal. Commissioner (Appeals) upheld order of Assessing Officer - However, Tribunal held ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of deduction under s. 80HHC which, like s. 80HHE, falls under Chapter VI-A of the IT Act, 1961. In the said judgment of Special Bench, which squarely applies to the facts of the present case, the Tribunal held that the deduction under s. 80HHC (s, 80HHE also fails In Chapter VI-A) Is to be worked out not on the basis of regular income-tax profits but it has to be worked out on the basis of the adjusted book profits in a case where s. 1153A is applicable. In the said judgment the dichotomy between regular Income-tax profits and adjusted book profits under s, 115JA is clearly brought out. The Tribunal in the said judgment rightly held that in s. 115JA relief has to be computed under s. 80HHC(3)/(3A). According to the Tribunal, once the law itself declares that the adjusted book profit is amenable for further deductions on specified grounds, in a case where s. 80HHC (8QHHE in the present case) is operational, It becomes clear that computation for the deduction under those sections needs to be worked out on the basis of the adjusted book profit. [See : para 61 of the judgment of the Tribunal in Syncome Formulations (supra)]. 4. In the present case we are concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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