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2020 (6) TMI 200 - HC - Income TaxMAT Computation - book profit adjustments - tribunal not allowing deduction of brought forward loss or unabsorbed depreciation relating to non-STPI units in computing book profits under Section 115JB - Deduction of income u/s 10A from book profit - HELD THAT:- Section 115JB was inserted in the Act by Finance Act, 2000 with effect from 01.04.2001. Explanation-(1) to Second proviso to Section 115JB(1) provides that for the purposes of this Section, book profit means the profit as shown in the statement of profit and loss account for the relevant previous years prepared under sub-Section(2). The supreme court in ‘J.K.INDUSTRIES LTD. VS. UNION OF INDIA’ [2007 (11) TMI 401 - SUPREME COURT] has held that books of account do not include balance sheet and profit and loss account. It has further been held that balance sheet and profit and loss account are financial statements. Section 10A of the Act permits a newly established undertaking in Free Trade Zone to claim a deduction from profits as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive Assessment years relevant to the previous year, in which undertaking begins to manufacture of produce such article or things or computer software as the case may be, shall be allowed from the total income of the assessee. In the present case the tribunal has held that net profits have to be determined as per the provisions of the companies Act and thereafter, the adjustments have to be made. It has further been held that the assessee cannot adjust the books of profit except as provided under the companies Act. While passing the order, the tribunal has misconstrued the relevant statutory provisions. It is also pertinent to note that the tribunal has not dealt with the claim of the assessee for deduction under Section 10A of the Act. Therefore, in the fact situation of the case, the remand of the matter to the tribunal for decision afresh has become imperative. It is therefore, not necessary for us to deal with the substantial questions of law framed by this court. In view of the preceding analysis, the order passed by the Income Tax Appellate Tribunal is hereby quashed and the matter is remitted to the tribunal for decision afresh in accordance with law.
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