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2007 (3) TMI 288 - AT - Income TaxMAT - Deduction u/s 80HHC - Interpretation Of Statutes - Profits and gains of business or profession - Whether deduction u/s 80HHC is to be worked out on the basis of regular income-tax profit or adjusted book profit in a case where section 115JA is applicable - HELD THAT:- Once the law itself has declared that the adjusted book profit is amenable for further deductions on specified grounds, in a case where section 80HHC is operational, it becomes very clear that the computation for the deduction u/s 80HHC needs to be worked out on the basis of the very same adjusted book profit. The above proposition is manifest in the fact that the deduction u/s 80HHC has been provided in sections 115J, 115JA and 115JB themselves instead of making a reference in section 80HHC itself. It is made so because the nexus between the deduction u/s 80HHC and the profit in a MAT regime is between the deduction and the adjusted book profit. While interpreting the provisions of the statute, it is not necessary to read down the law, unless the context demands, to make the provision workable. The expression used in section 115J and the expression used in section 115JB when compared and read together do not give any intention or expound any purpose that section 115JA is different from section 115J and section 115JB is different from section 115JA in the character and purpose of deduction u/s 80HHC in a case of MAT assessment. When the amendments do not bring out any case of such differentiation in their plain interpretation, there is no justification to strain the language and imbibe to extra-contextual meaning. The deduction u/s 80HHC in a MAT scheme is from the taxable income, which is otherwise the adjusted book profit. If no deduction is available to an assessee, the gross total income itself is the taxable income of the assessee. MAT scheme does not provide for deductions. Therefore, the interpretation is that the adjusted book profit of a company itself is the gross total income of that assessee-company. The deduction u/s 80HHC is in that way given out of the gross total income in a case falling under MAT. This in turn means that section 80HHC should be computed on the adjusted book profit. Sections 115J, 115JA and 115JB come into operation, as the regular profits has been substituted by the book profit. Once the substitution is over, there is no way to go back to the normal computation process of statutory profit, which has already been overwhelmed by sections 115J, 115JA and 115JB. This reconciles the alleged incompatibility pointed out by the Revenue that the deduction available to an assessee under Chapter VI-A is subject to section 80AB. Therefore, we find that the deduction u/s 80HHC in a case of MAT assessment is to be worked out on the basis of the adjusted book profit 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. As sections 115J, 115JA and 115JB deal with the same subject, it is indispensable for us to consider the provisions of section not only under section 115JA but also under section 115JB. Further, in the case of one of the interveners before us, M/s. Bhushan Steel and Strips Ltd., the relevant assessment year is 2003-04 to which section 115JB is applicable. Therefore, we make it clear that by discussing the law contained in section 115JB, we have not exceeded our brief. In fact we have decided the issue in the light of section 115JA, but only thing is that the discussion on section 115JB is an inherent fall out of the case before us. Now the files will go back to the regular Benches, which will pass appropriate orders on the basis of the grounds raised in the respective appeals.
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