TMI Blog2014 (10) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... hd/2013, CO No. 35/Ahd/2013, CO No. 36/Ahd/2013, ITA No. 304/Ahd/2013 - - - Dated:- 26-9-2014 - Shri Mukul Kr. Shrawat And Shri N. S. Saini,JJ. For the Petitioner : Shri V. K. Singh, Sr. DR For the Respondent : Shri P. D. Shah, AR ORDER Per Shri N. S. Saini, Accountant Member: These are the appeals filed by the Revenue and Cross-objections filed by the assessee against separate orders of CIT(A)-XI, Ahmedabad passed in Assessment Years 2002-03, 2003-04 and 2004-05. 2. The common ground No.1 of the appeal of the Revenue in all the three assessment years reads as under:- 1. The ld. CIT(A) has erred in law and on facts in deciding that the assessee was eligible for deduction u/s 80 HHC of the Act. 3. We have heard the rival submissions, perused the orders of the lower authorities and material available on record. The common issue involved in ground No.1 of the appeal for all the years under consideration relates to deduction u/s 80HHC in respect of profit from DEPB. The impugned order has been passed by the CIT(A) on 27.11.2012 in pursuance to the directions of this Tribunal vide its consolidated order dated 31.05.2010 in ITA No.1467/Ahd/2006 for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e afore cited decisions and thus, could not record any findings on the pleas now raised on behalf of the assessee before us on their claim for deduction u/s 80HHC of the Act while determining book profits u/s 115JB of the Act, we consider it fair and appropriate to set aside the order of the ld. CIT(A) and restore the matter to his file for deciding the issue of claim for Deduction u/s 80HHC of the Act in terms of clause (iv) of the explanation to sec.115JB of the Act in accordance with law in the light of various judicial ITA No.1467/A/06 and others for AYs 2002-03, 2003-04 and 2004- 05 Rajratna Metal Industries Ltd., Ahmedabad pronouncements including the afore cited decisions, after allowing sufficient opportunity to both the parties. Needless to say that while redeciding the appeal, the learned CIT(A) shall pass a speaking order, keeping in mind, inter alia, the mandate of provisions of sec. 250(6) of the Act and ensuring that the conditions of section 80HHC are satisfied in the instant case while computing the deduction allowable to the assessee. With these directions, ground no. 3 in ITA no. 1089/And/2008, ground no.2 in ITA nos. 1242 3557/Ahd /2007 are disposed of. B2. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the AO was not entitled to alter the profit and loss account prepared by the assessee under the provisions of the Companies Act while arriving at book profits u/s 115JA of the Act and the book profits so arrived at should be the basis for taxation and computation u/s 80HHC should be limited to the case of profits of eligible category only. This decision has been reiterated in CIT Vs. SPEL Semiconductor Ltd. [323 ITR 488(Mad.)], when it was held that the deduction u/s 80HHC of the Act in an assessment u/s 115JA is to be worked out on the basis of adjusted book profits 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. An SLP filed by the Revenue against this decision has been dismissed as reported in 320 ITR (St.) 21. Following the decision in Rajnikant Schnelder Associates P Ltd.(supra), similar view was taken in Bhari Information Technology System [328 ITR 380(Mad.)]. 3. In view of the above facts and legal position, the learned AO should be directed to reduce the entire amount of deduction under section 80HHC of the Act, as per Books and without considering restric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. vs CIT 327 ITR 305(S.C). In this case it is clearly held by the Hon'ble Supreme Court that for the purposes of sec. 115JB the relief will be computed as per the provisions of sec.80HHC(3)/80HHC(3A). It is also held in Ajanta Pharma Ltd. (supra) that provisions of sec. 80HHC(1B) will not be applicable for the purposes of computation of eligible profits for sub-clause(iv) to explanation-1 to sec.115JB(2) of the I.T. Act, 1961. Respectfully following the decision of Hon'ble Apex court, I am of the considered view that the appellant is eligible to reduce profits as computed u/s.80HHC(3) for the purposes of computation of book profits u/s. 115JB of I.T. Act, 1961. Accordingly, the A.O. is directed to reduce profits as computed u/s. 80HHC(3) after giving effect to this order for the purpose of sub-clause(iv) to explanation-1 to sec.115JB of I.T. Act, 1961. This grounds of appeal is partly allowed. 7. The Departmental Representative could not point out any mistake in the aforesaid order of the CIT(A); therefore, this ground of appeal of the Revenue is dismissed in all the three years under consideration. 8. The common ground Nos. 3 4 of the appeal of the Revenue in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal and the CIT(A) could not have decided the issue which were not restored before him by the Tribunal. We, thus, do not find any error in the order of the CIT(A) on this count. Therefore, this ground of Cross-objections taken by the assessee in all the three years under consideration is dismissed. 13. The common ground No.2 taken by the assessee in Cross-objections for all the three years under consideration reads as under:- 2. That the appellant is eligible to reduce profits as computed u/s 80HHC(3) of the Act for the purpose of computation of book profits u/s 115JB of the Act and accordingly the learned AO be directed to allow the correct amount of deduction of 80HHC of the Act, while computing the book profit. 14. The AR of the assessee made no submission in respect of this ground of Cross-objections and could not point out any error in the order of the CIT(A). Thus, this ground of Cross-objections of the assessee for all the three years under consideration is dismissed. 15. The assessee has raised following additional grounds of Crossobjections at the time of hearing in all the three assessment years under consideration:- CO No.34/Ahd/2013 1. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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