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TMI Blog2009 (4) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ged in the manufacture of iron castings, filed its return of income for the assessment year 2002-03 admitting nil income. The return was processed under section 143(1) on 30.09.2002 and the case was selected for scrutiny and notice under section 143(2) was issued on 24.06.2004. The Assessing Officer was of the view that the assessee has not restricted the deduction allowable under Section 80 HHC to 70% as applicable for that year and issued a notice under Section 148 and completed the assessment under Section 143(3) r/w Section 147 restricting the assessee's claim. Against the same, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who dismissed the appeal. The assessee filed an appeal before the Tribunal and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws:- "4. We are not able to subscribe our view to the grounds taken in the appeal that the deduction under Section 80 HHC is allowable only on the profits and gains arrived at under Sections 28 to 44B of the Income Tax Act. In the case on hand, it is the stand of the assessee that the relief under section 80HHC should be based on the profit ascertained under Section 115JA only but not on income computed under Sections 28 to 44 of the Act. The Tribunal after considering the Judgments of the Supreme Court in the case of Surana Steels P. Ltd., vs. Deputy CIT (1999) 237 ITR 777 and in the case of Apollo Tyres Ltd., vs. CIT (2002) 255 ITR 273 (SC) and analyzing the order impugned found that the provisions of Section 115J are similar to the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oved by the company in the general meeting and thereafter to be filed before the Registrar of Companies, who has a statutory obligation also to examine and be satisfied that the accounts of the company are maintained in accordance with the requirements of the Companies Act. Sub-section (1A) of section 115H does not empower the Assessing Officer to embark upon a fresh enquiry in regard to the entries made in the books of account of the company. 5. The Assessing Officer is not entitled to touch the profit and loss account prepared by the assessee as per the provisions contained in the Companies Act, while arriving at the book profit under Section 115J and the book profit so arrived at should be the basis for taxation and therefore, the compu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of a company itself is the gross total income of that assessee-company. The deduction under section 80HHC in that way given out of the gross total income in a case falling under MAT. This in turn means that section 80HHC should be computed on the adjusted book profit. Sections 115J, 115JA and 115 JB come into operation, as the regular profits has been substituted by the book profit. Once the substitution is over, there is no way to go back to the normal computation process of statutory profit, which has already been overwhelmed by sections 115J, 115JA and 115JB. This reconciles the alleged incompatibility pointed out by the Revenue that the deduction available to an assessee under Chapter VIA is subject to section 80AB. Therefore, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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