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2019 (6) TMI 1110 - AT - Income TaxMAT - applicability of Section 115JB(6) - claim of deduction / exemption from Book Profit - scope and interpretation of section 115JB(6) - applicability of provision of section section 80IB (10) to determine eligible unit - entrepreneurs and developers as defined under the SEZ Act, situated in units or Special Economic Zone - HELD THAT:- Reading section 115JB(6) of the Act with the definition provided of the terms used in the SEZ Act as above, we find that the exemption from the payment of MAT is provided only to the units set up in a SEZ or Offshore banking unit or in an International Finance Service Centre in relation to the business or tradable services as eligible under the SEZ Act by the persons, who have been granted Letter of Approvals under the said Act. No merit in the contention of the assessee that sub-section (6) is to be interpreted independently, thus making the assessee eligible for exemption from payment of MAT also, since it is a developer of housing projects, and dismiss all arguments made by the Ld. Counsel for the assessee in this regard. We, therefore, hold that the assessee is not eligible for exemption from payment of MAT as per the provisions of section 115JB(6), since, admittedly, it does not qualify as a business or services rendered by an entrepreneur or developer in a unit or SEZ as per definition of the said terms in the SEZ Act. We find that the Ld. Counsel for the assessee for this purpose has relied heavily on the provisions of section 115JB(5) , pointing out that as per the said sub-section, all other provisions of the Act would apply to the assessee and, therefore, the provisions of section 80IB (10) would also apply to it requiring it to be deducted /reduced for arriving at the taxable book profits. We do not find any merit in this contention of the Ld. Counsel for the assessee also. Deduction under section 80IB(10) is provided against the “gross total income” of an assessee, while section 115JB levies taxes on the” book profits”. Both the sections clearly operate in different spheres. Therefore sub-section (5) of section 115JB cannot be interpreted so as to provide deduction under section 80IB(10) from the “book profits” of the assessee. The Hon’ble High Court of Uttarakhand ruled out the allowability of deduction u/s 80IC for the purposes of paying tax u/s 115JB, in the case of SIDCUL Industrial Association vs State of Uttarakhand & Others [2010 (11) TMI 671 - UTTARKHAND HIGH COURT] We dismiss the contentions of the assessee that deduction provided u/s 80IB (10) is to be made from the book profits of the assessee for the purpose of payment of MAT. The decision of the ITAT, Mumbai Bench, relied upon by the assessee in the case of Neha Builders [2018 (4) TMI 860 - ITAT MUMBAI] is of no assistance to the assessee in view of the decisions of High Courts taken note of above by us. Decided against the assessee.
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