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2012 (1) TMI 345

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..... Section 147/148 of the Income Tax Act, 1961 (Act, for short) on the ground that the jurisdictional pre-conditions were not satisfied. It has been held that it is a case of change of opinion. However, we are not examining the said aspect as we find that the findings recorded by the tribunal on merits are correct and as per the ratio of the decision of the Supreme Court in CIT versus Bhari Information Tech Systems Private Limited, Civil Appeal No. 33750/2009, decided on 20th October, 2011. 3. The issue in question relates to computation of book profits under Section 115JB of the Act and whether deduction/exemption under Section 10A and 10B should be taken at ₹ 9825.14 lacs as against ₹ 13,343.61 lacs allowed in the original ass .....

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..... leave petition filed by the Department stands dismissed with no order as to costs. 6. In the present case, we are concerned with clause (f) and (ii) to Explanation 1 to Section 115JB. The relevant portion of the Explanation 1 reads as under:- 115JB. Special provision for payment of tax by certain companies. Explanation 1. For the purposes of this section, book profit means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by xxxx (f) the amount or amounts of expenditure relatable to any income to which section 10 or section 10A or section 10B or section 11 or section 12 apply, if any amount referred to in clauses (a) to (f) is debited .....

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..... hen for the assessment year 2001-02, the extent of deduction is 80 per cent. thereof and so on which means that the principle of proportionality is brought in to scale down the tax incentive in a phased manner. However, for the purposes of computation of book profits which computation is different from normal computation under the 1961 Act/computation under Chapter VI-A. We need to keep in mind the upward and downward adjustments and if so read it becomes clear that clause (iv) covers full export profits of 100 per cent. as eligible profits and that the same cannot be reduced to 80 per cent. by relying on section 80HHC(1B). Thus, for computing book profits the downward adjustment, in the above example, would be ₹ 100 crores an .....

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..... ections (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 compliance condition. Therefore, one cannot rely upon the last sentence in clause (iv) of Explanation to section 115JB (subject to the conditions specified in sub-sections (4) and (4A) of that section) to obliterate the difference between eligibility and deductibility of profits as contended on behalf of the Department. 8. In the present case, the findings recorded by the tribunal are that in the books of accounts maintained under the Companies Act, 1956, the respondent assessee was regularly following straight line method to compute depreciation. T .....

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