TMI Blog2007 (5) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to appreciate the fact that: ( i )As per the provisions of section 115JA the appellants Book Profit is worked out at Nil ; ( ii )For determining the Book Profit as per section 115JA(2) the Assessing Officer has to reduce the profit of the industrial undertaking to whom provisions of section 80-IA are applicable. 4. The learned CIT(A) erred in drawing the conclusion that for the purposes of section 115JA the deduction eligible from Book Profits is the deduction eligible under section 80-IA and not the profits as per books of account of the eligible unit under section 80-IA. 5. The learned CIT(A) ought not to have confirmed determination of the tax liability of Rs. 2,13,875 on Rs. 4,38,762 being 30 per cent of the book profit of Rs. 14,62,541. 6. The confirmation of determination of income under section 115JA of Rs. 4,38,762 requires to be deleted. 7. The appellant craves leave to add, amend, alter or modify the ground or grounds of appeal." 2. Though the assessee has raised various grounds of appeal, but, all grounds relate to an issue, i.e., what would be the amount to be reduced from the net profit as shown in the profit and loss account for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lower authorities and the Order of the Special Bench in the case of Syncome Formulations (I) Ltd. ( supra ). The controversy raised before us is, with regard to the computation of book profit under section 115JA in order to decide what would be the total income of the assessee under the MAT scheme. The book profit is defined in the Explanation and according to it, it means the net profit as shown in the profit and loss account for the relevant previous year prepared in accordance with the provisions of part II and part II of Schedule VI of the Companies Act, 1956, as increased by the amount described in clauses ( a ) to ( f ) if any amount referred therein is debited to the P L account and as reduced by the amount computed in clauses ( i ) to ( ix ). According to clause ( v ) the aforesaid net profit is to be reduced, by the amount of profit derived by an industrial undertaking "located in an industrial backward State or District as referred to in sub-clause ( b ) or sub-clause ( c ) of clause ( iv ) of sub-section (2) of section 80-IA for the assessment years, such industrial undertaking is eligible to claim of deduction of 100 per cent of profits and gains under sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking in the light of judgment of the Apex Court in the cases of Sterling Foods ( supra ), Pandian Chemicals ( supra ). 7 The Order of the Tribunal in the case of Syncome Formulations (I) Ltd. ( supra ) has been rendered on the point of computation of book profit under section 115JA vis-a-vis the amounts of profits eligible for deduction under section 80HHC as per clause ( VIII ) of Explanation below section 115JA of the Act. As per clause ( VIII ) of Explanation, the net profit is to be reduced from the amounts of profit eligible for deduction under section 80HHC computed under clause ( a ), ( b ) or ( c ) of sub-section (3) or sub-section (3A) or as the case may be of that section and subject to the conditions specified in sub-section (4) and (4A) of that section. In that case, the amount which is required be reduced from the net profit, is the amount of profit eligible for deduction under section 80HHC and not the profit derived from the export unit like a case in clause ( V ) in which the amounts required to be reduced, is the profits derived by an industrial undertaking. It has been repeatedly held that section 80HHC is a complete code and for computin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the deduction available to an assessee under Chapter VI-A is subject to section 80AB. Therefore, we find that the deduction under section 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 profit and gains of business or profession." 8. But, in the case of computation of book profit vis-a-vis the profits derived by an industrial undertaking, eligible for deduction under section 80-IA, the eligible profit for deduction under section 80-IA, is not required to be computed as per clause ( V ) of Explanation . The net profit is required to be reduced by the amount of profits derived by an industrial undertaking which is eligible for deduction under section 80-IA of the Income-tax Act. It is not necessary whether the profits derived by industrial undertaking, is eligible for deduction in terms of other conditions of section 80-IA. In order to understand the real meaning of the language used in clause ( v ), we extract the same as under : ( v )The amount of profits derived by an industrial undertaking located in an ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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