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2016 (1) TMI 77 - ITAT MUMBAI

2016 (1) TMI 77 - ITAT MUMBAI - TMI - MAT computation - exclusion of income of SEZ unit while computing Book Profit u/s115JB - Held that:- In view of the decision of the co-ordinate bench of the Tribunal in assessee's own case [2012 (12) TMI 491 - ITAT MUMBAI ] holding that book profit computed under section 115JB will not include income of SEZ Unit, we do not see any infirmity in the order of the learned Commissioner (Appeals) in directing the Assessing Officer to exclude the income of the SEZ .....

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are as under:- "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to exclude the income of SEZ unit while computing Book Profit u/s115JB of the IT Act ignoring the amendment by Finance Act, 2007 w.e.f. 01.04. 2008 whereby the words 10A and lOB have been omitted from Explanation 1(f) and (ii) of section 115JB of the Act, thereby bringing the profit/loss of 10A & lOB units within the purview of MAT. 2. On the facts and in the circums .....

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d (ii) of Explanation 1 of section 115JB by Finance Act, 2007, profit/loss of 10A & 10B units has been expressly brought within the purview of MAT w.e.f. A. Y. 2008-09. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to exclude the income of SEZ unit while computing Book Profit u/s.115JB of the IT Act without considering the clarification given in para 44 of CBDT's Circular No.3/2008 regarding the amendment in section 115JB by Fin .....

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6,65,577 under section 115JB. During the assessment proceedings, the Assessing Officer found that assessee while computing the book profit has reduced the profit from its SEZ Unit. He, therefore, called upon the assessee to justify the same. While doing so, he also observed that in the assessment year 2009-10, assessee's explanation that book profit under section 115JB will not include the profits of SEZ unit was rejected. Though, the assessee in its reply submitted that the Tribunal in asse .....

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late authority. The learned Commissioner (Appeals), upon considering the fact that the Tribunal in assessee's own case for the assessment year 1989-90 has accepted assessee's claim that profit of SEZ Unit will not form part of the book profit, directed the Assessing Officer to exclude the income relating to SEZ Unit while computing book profit under section 115JB. 4. We have considered the submissions of the parties and perused the material available on record. At the outset, learned Rep .....

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under section 115JB, held as under:- "21. It is evident from above that an existing SEZ unit will also be governed by Special Economic Zones Act, 2005. Therefore, we are of the considered view that the benefits which are to be provided to the newly established unit in SEZ as per section 10AA of the Act will also be available to the existing units in SEZ. Moreover, section 4(1) of SEZ Act provides that an existing SEZ unit shall be deemed to have been notified and established in accordance .....

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ll not be included while computing book profit for the purpose of MAT as per section 115JB(6) of the Act. In view of above, we are of the considered view that there is merit in the contention of ld A.R. that irrespective of the fact that amendment has been made in clause (f) of Explanation (1) to section 115JB(2) of the Act to apply the provisions of MAT in respect of units which are entitled to deduction u/s.10A or 10B but the units which are in SEZ will continue to get benefits from the applic .....

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