TMI Blog2016 (10) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... he profits earned by the other branch of export business. A reading of the principles enunciated by the Supreme Court in the cases of Ajanta Pharma Ltd. (2010 (9) TMI 8 - SUPREME COURT ) and Jeyar Consultant and Investment Pvt. Ltd. (2015 (4) TMI 195 - SUPREME COURT), it becomes crystal clear that the Tribunal has arrived at an incorrect comprehension of the spheres assigned respectively by Section 80-HHC and Section 115-JA of the Income Tax Act. Therefore, the impugned order passed by the Tribunal is not sustainable. Since the assessee-Company has not been provided with an opportunity to demonstrate that they did Return the profits from their export business for the assessment year concerned, which profits of export business, are set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not claimed the deduction under Section 80-HHC in the normal computation, since it had filed NIL Return ? 3. The respondent-assessee-Company has Returned for the assessment year 1998-1999 on 27.11.1998 admitting 'Nil' income under normal computation as well as under Section 115-JA of the Income Tax Act. The Return was processed under Section 143(1)(a) on 20.05.1999. The excess claim of ₹ 24,370/- under Section 80-HHC was disallowed while computing the book profits under Section 115-JA. The assessee preferred appeal before the Commissioner of Income Tax (Appeals), which was allowed on 11.12.2001 on the ground that the said claim could not have been disallowed under Section 143(1)(a) of the said Act. Under the normal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hfully extracted paragraph 16 of the judgment in Govind Rubber (P) Ltd. case thereunder. 4. Heard Mr.T.Ravi Kumar, learned Senior Standing Counsel of the Income Tax, appearing for the appellant/Revenue and Mr.A.S.Sriraman, learned counsel appearing for Mr.S.Sridhar, learned counsel for the respondent/assessee. 5. Learned Senior Standing Counsel appearing for the Revenue brought to our notice the judgment of the Supreme Court rendered in the case of Ajanta Pharma Ltd. Vs. Commissioner of Income Tax, reported in 2010 (327) ITR 305 (SC) - 2010 (234) CTR (SC) 139. It was pointed out in the course of the judgment of the Supreme Court that the scheme of levy of minimum tax has now come to be introduced, as the zero tax companies and compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for working out the deduction as stipulated under Clause (iv) of Explanation to Section 115-JB of the Act, was specifically rejected, finding no merit in that contention. Ultimately, the Supreme Court concluded the issue in the following words: 10..... If the dichotomy between eligibility of profit and deductibility of profit is not kept in mind then S.115-JB will cease to be a self-contained code. In S.115-JB, as in S.115-JA, it has been clearly stated that the relief will be computed under S.80-HHC(3)/(3-A), subject to the conditions under sub-cls.(4) and (4A) of that Section. The conditions are only that the relief should be certified by the chartered accountant. Such condition is not a qualifying condition but it is a complian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is net profit from the export business, after adjusting the lossess from one type of export business from other type of export business, the benefit of the said provision would be granted. 19. However, the appellant-assessee relies upon section 80HHC(3)(b), as existed at the relevant time, to contend that the profits of the business as a whole, i.e., including profits earned from the goods or merchandise within India will also be taken into consideration. In this manner, argues the appellant, even if there are lossess in the export business but profits of indigenous business outweigh those lossess and the net result is that there is profit of the business, then the deduction under section 80HHC should be given. However, having regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufactured by others, and the lossess sustained in any one of these branches of exports business, are liable to be adjusted against the profits earned by the other branch of export business. 8. A reading of the principles enunciated by the Supreme Court in the cases of Ajanta Pharma Ltd. (cited supra) and Jeyar Consultant and Investment Pvt. Ltd. (cited supra), it becomes crystal clear that the Tribunal has arrived at an incorrect comprehension of the spheres assigned respectively by Section 80-HHC and Section 115-JA of the Income Tax Act. Therefore, the impugned order passed by the Tribunal is not sustainable. 9. Since the assessee-Company has not been provided with an opportunity to demonstrate that they did Return the profits from t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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