For section115JA/JB Deduction U/s. 80HHC to be computed with reference to the net profits in the profit and loss account – SC

Al-Kabeer Exports Ltd Vs. CIT (Supreme Court)- Reversing the High Court Decision and restoring the Tribunal Special bench Decision. It was held that in view of  SC Court’s Order in the case of Commissioner of Income-Tax vs. Bhari Information Technology Systems (P) Ltd. [S.L.P. (C) No.33750 of 2009] Tribunal was  justified in coming to the conclusion that the amount to be reduced under clause (iv) of Explanation 1 to Section 115JB in respect of the profits eligible for deduction under Section 80HHC has to be computed with reference to the net profits in the profit and loss account and not according to the profits of the business computed under the head of profits and gains of business or profession.

SUPREME COURT OF INDIA

RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (Civil) No(s). 32274/2010

(From the judgement and order dated 08/09-07-20 10 in ITA No.2619/2010 of The HIGH COURT OF BOMBAY)

AL-KABEER EXPORTS LIMITED

VERSUS

COMMISSIONER OF INCOME TAX-3, MUMBAI

(With prayer for interim relief)

With S.L.P. (C) Nos.33932-33933/2010 (With office report) Date: 03/02/2012

These petitions were called on for hearing today.

UPON hearing counsel the Court made the following

O R D E R

Leave granted. The appeals filed by the assessee are allowed with no order as to costs. [ T.I. Rajput ] [ Madhu Saxena ] A.R.-cum-P.S. Assistant Registrar [Signed order is placed on the file]

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1546 OF 2012 (Arising out of S.L.P. (C) No.32274 of 2010)

Al-Kabeer Exports Limited …Appellant(s)

Versus

Commissioner of Income Tax-3, Mumbai …Respondent(s)

With Civil Appeal Nos.1547-1548 of 2012 @ S.L.P. (C) Nos.33922-33933 of 2010 O R D E R

Leave granted.

In view of this Court’s Order in the case of Commissioner of Income-Tax Vs. Bhari Information Technology Systems (P) Ltd. [S.L.P. (C) No. 33750 of 2009], upholding the judgment of the Special Bench of Income Tax Appellate Tribunal in the case of Deputy Commissioner of Income Tax Vs. Syncome Formulations (I) Ltd., reported in (2007) 106 ITD 193, the impugned judgment of the High Court is set aside and the judgments of the ITAT in these cases stand affirmed. The civil appeals filed by the assessee are, accordingly, allowed with no order as to costs.

New Delhi, February 03, 2012

NF