Case Law Details
CIT Vs. Bhari Information Tech Systems (Supreme Court of India)- Deduction under Section 80HHC (Section 80HHE also falls in Chapter VI‐A) is to be worked out not on the basis of regular income tax profits but it has to be worked out on the basis of the adjusted book profits in a case where Section 115JA is applicable. In the said judgement the dichotomy between regular income tax profits and adjusted book profits under Section 115JA is clearly brought out.
The Tribunal in the said judgement rightly held that in Section 115JA relief has to be computed under Section 80HHC(3)/(3A). According to the Tribunal, once the law itself declares that the adjusted book profit is amenable for further deductions on specified grounds, in a case where Section 80HHC (80HHE in the present case) is operational, it becomes clear that computation for the deduction under those sections needs to be worked out on the basis of the adjusted book profit [See: para 61 of the judgement of the Tribunal in Syn-come Formulations (supra)]. In the present case we are concerned with Section 80HHE which is referred to in the Explanation to Section 115JA, clause (ix). In our view, the judgement of the Special Bench of the Tribunal in Syncome Formulations (supra) squarely applies to the present case. Following the view taken by the Special Bench in Syn-come Formulations (supra), the Tribunal in the present case came to the conclusion that deduction claimed by the assessee under Section 80HHE has to be worked out on the basis of adjusted book profit under Section 115JA and not on the basis of the profits computed under regular provisions of law applicable to computation of profits and gains of business.
SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS
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