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2013 (9) TMI 893 - DELHI HIGH COURTInterpretation of provisions of Section 115-J – Minimum alternate tax (MAT) - the stand of the respondent-assessee that they were entitled to carry forward of unabsorbed losses, including investment allowance in view of the fact that income taxable had been computed on book profits under Section 115-J and not under the normal provisions. - Held that:- Reliance has been placed upon the judgment in the case of Karnataka Small Scale Industries Development Corporation Limited versus Commissioner of Income Tax, 2002 [2002 (12) TMI 4 - SUPREME Court], wherein it has been held that Section 115-J (1) commences with the non-obstante clause and provides for two stage assessment. The first stage requires computation of income under the normal provisions and the second stage requires computation of book profits as per provisions of Section 115-J. In case the income computed under the normal provisions is less than 30% of the book profits, then the assessee’s deemed total income chargeable to tax for the relevant previous year would be equal to 30% of the book profits. At the first stage, profits are computed under the normal provisions and deductions allowable under the Act have to be taken into consideration. The deduction, which are allowed, do not get disturbed or obliterated even if the assessee pays tax on the book profits under Section 115-J. Thus, when Section 115-J is invoked and is applied, it does not affect the computation made under the normal provisions. They stand on their own legs and do not get effected. Accordingly, the unabsorbed loses, including investment allowance, which were duly taken into consideration and accounted for while computing tax under the normal provisions, do not get displaced or erased and adjustments made have to be given full effect to – In the instant case, investment allowance, etc. which has to be adjusted while computing the deduction under the normal provisions will not be allowed to be carried forward – Decided in favor of Revenue.
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