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2010 (7) TMI 26 - HC - Income TaxAdjustment in book profit – MAT – Minimum alternate tax - Explanation (iv) to section 115JB(2) – deduction towards profit exempt u/s 80HHC - CBDT Circulars of 4 May 1990 and 21 February 1994 – ITAT observed that the deduction admissible vide Explanation (iv) to section 115JB(2) of the Income Tax Act towards profit exempt u/s. 80HHC has to be quantified with reference to the profits as per accounts duly adjusted under various clauses to the Explanation of Section 115JB and not with reference to the normal computation under the chapter ‘Profits and Gains of Business or Profession’ – Held that: While the Assessing Officer does not have the jurisdiction to scrutinize once again or to go behind the net profit shown in the profit and loss account, he is well within his jurisdiction in effecting the increases and reductions as warranted by Explanation 1 to Section 115JB. As a matter of fact, the Assessing Officer is duty bound to carry out the legislative intent by effecting the increases on the one hand and the reductions on the other as provided in Explanation 1. For the purposes of clause (iv) of Explanation 1, the extent of the reduction in respect of the deduction available under Section 80HHC has to be computed strictly in accordance with the provisions of Section 80HHC - Tribunal was not justified – decided in favor of revenue
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