(Judgment of the Court was delivered by K.RAVIRAJA PANDIAN J.) As the question of law involved in these tax cases is common, we have taken the first tax case appeal in T.C.(A) No.480 of 2008 as a typical case to state the facts.
2. The assessee company is engaged in manufacture and sale of integrated circuits. The assessee claimed deduction of Rs.2,28,66,239/- in respect of profits eligible for deduction under
Section 80HHC of the Income-tax Act, 1961. Since the assessee's claim under
Section 80HHC is nil, no deduction under
Section 80HHC survives. Under Section 115JA as claimed under
Section 80HHC will not change 115JA from what was under normal computation. Against that order, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), who allowed the alternative claim of the assessee. Against that order, the assessee preferred Cross Appeal before the Income-tax Appellate Tribunal and the Income-tax Appellate Tribunal held that the deduction under
Section 80HHC of MAT assessment is to be worked out on the basis of the adjusted book profit and not on the basis of the profit computed under the regular provisions of law applicable to the computation of profits and gains of business or profession. The correctness of the same is now canvassed by formulating the question of law to the effect that whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the deduction under
Section 80HHC of the Act is a case of MAT assessment is to be worked out on the basis of the profit computed under the regular provision of law applicable to the computation of profits and gains of the business or profession."
3. We heard the argument of the learned counsel on either side and perused the material on record.
4. Learned counsel on either side submits that the issue involved in the present case is squarely covered by the Division Bench judgment of this Court in the case of COMMISSIONER OF INCOME-TAX VS. RAJANIKANT SCHNELDER AND ASSOCIATES P.LTD., reported in (2008) 302 ITR 22, to which one of us (K.Raviraja Pandian,J.) was a party, wherein this Court has held that the assessing officer was not entitled to alter the profit and loss account prepared by the assessee under the provisions contained in the Companies Act while arriving at the book profit under Section 115JA and the book profit so arrived at should be the basis for taxation and, therefore, the computation under
section 80HHC should be limited to the case of profits of eligible category only. For coming to such a conclusion, this Court also relied on two decisions of the Supreme Court viz., SURANA STEELS P.LTD. VS. DEPUTY COMMISSIONER OF INCOME-TAX, (1999) 237 ITR 777 and APOLLO TYRES LIMITED VS. COMMISSIONER OF INCOME TAX, (2002) 255 ITR 273.
5. In view of the reasoning stated in the above decisions, the tax case appeals deserve to be dismissed and the same are dismissed by answering the question of law in favour of the assessee and against the revenue.