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2018 (10) TMI 368 - HC - Income TaxAllowing deduction u/s 80HHC on the basis of book profits u/s 115JA even though the eligible profits u/s 80HHC was Nil as per normal computation - Held that:- A Division Bench of this Court in the case of Commissioner of Income Tax, Chennai Vs. M/s.Three Bags India P.Ltd. [2016 (10) TMI 400 - MADRAS HIGH COURT] after taking note of the decision in Ajanta Pharma Ltd. [2010 (9) TMI 8 - SUPREME COURT] decided the above question in favour of the assessee and against the Revenue. Set-off of MAT credit - set off from the tax payable before setting off the Tax Deducted at Source and Advance Tax paid - Held that:- Above referred to substantial questions of law have been answered against the Revenue by the Hon'ble Supreme Court in the case of CIT V. Tulsyan NEC Ltd [2010 (12) TMI 23 - SUPREME COURT OF INDIA] the right to set off arises as a result of the payment of tax under Section 115JA(1) although quantification of that right depends upon the ultimate determination of total income for the first assessment year. It is immaterial that the relevant form prescribed under Income Tax Rules, at the relevant time (i.e. before 1.4.2007), provided for set off of MAT credit balance against the amount of tax plus interest i.e. after the computation of interest under Section 234B. This was directly contrary to a plain reading of Section 115JAA(4). Further, a form prescribed under the rules can never have any effect on the interpretation or operation of the parent statute. Mat credit allowed to be set off from advance tax before calculating interest - Decided against the Revenue and in favour of the Assessee.
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