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2010 (12) TMI 740 - AT - Income TaxMAT - disallowance of deduction u/s 10B from book profit - set off of unabsorbed depreciation - Enhancement of book profit - Deduction u/s 80HHC - It was submitted by the assessee that for working u/s.115JB, the deduction u/s.80HHC has to be recomputed as per the figures mentioned in the books of accounts only and not as computed for income tax purposes - it is clear that the AO has considered the allowability of deduction under Section 80HHC while computing the book profit - Held that: - for the purpose of the book profit, deduction under section 80HHC is to be computed with reference to the book profit and not with reference to the profit computed under the Income Tax Act. Admittedly, while computing the book profit, brought forward depreciation was not reduced and therefore for the purpose of computing the deduction under Section 80HHC for the purpose of section 115JB, brought forward depreciation is not required to be reduced. Exemption u/s 10B - A careful perusal of clause (ii) of the Explanation to section 115JB(2) reveals that, though the said clause speaks about the amount of 'income; yet it also speaks of 'if, any such amount is credited in profit and loss account: Thus, while reading the said clause as a whole, it becomes clear that the amount of income which can be reduced by the Assessing Officer for computing the book profit under clause (ii) of the Explanation to section 115JB(2), it would be the amount which is credited to the profit and loss account and not the amount of income which is claimed by the assessee or determined by the Assessing Officer while assessing the income under the regular provisions of the Incometax Act. - CIT(A) was not justified in enhancing the book profit by disallowing the deduction under Section 10B.
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