Law:

Section:

Section 80HHC, read with section 115JA, of the Income-tax Act, 1961 - Deductions - Exporters - Whether deduction under section 80HHC in case of MAT assessment is to be worked out on basis of adjusted book profit and not on basis of profit computed under regular provisions of law applicable to computation of profits and gains of business or profession - Held, yes CASE REVIEW CIT v. Rajanikant Schnelder & Associates (P.) Ltd. [2008] 302 ITR 22 (Mad.) [Para 4] followed. CASES REFERRED TO CIT v. Rajanikant Schnelder & Associates (P.) Ltd. [2008] 302 ITR 22 (Mad.) [Para 4], Surana Steels (P.) Ltd. v.Dy. CIT [1999] 237 ITR 777 / 104 Taxman 188 (SC) [Para 4] and Apollo Tyres Ltd. v. CIT [2002] 255 ITR 273 / 122 Taxman 562 (SC) [Para 4]. Mrs. Pushya Sitaraman for the Appellant. K. Venkatanarayanan, Subbaraya Aiyar and Quadin Hogeyn for the Respondent. JUDGMENT K. Raviraja Pandian, J. - As the question of law involved in these tax cases is common, we have taken the first tax case appeal in TC (A) No. 480 of 2008 as a typical case to state the facts. 2. The assessee-company is engaged in manufacture and sale of integrated circuits. The assessee claimed deduction of Rs. 2,28,66,239 in respect of profits eligible for deduction under section 80HHC of the Income- tax Act, 1961. Since the assessee's claim under section 80HHC is nil, no deduction under section 80HHC survives. Under section 115JA as claimed under section 80HHC will not change section 115JA from what was under normal computation. Against that order, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), who allowed the alternative claim of the assessee. Against that order, the assessee preferred Cross Appeal before the Income-tax Appellate Tribunal and the Income-tax Appellate Tribunal held that the deduction under section 80HHC of MAT assessment is to be worked out on the basis of the adjusted book profit and not on the basis of the profit computed under the regular provisions of law applicable to the computation of profits and gains of business or profession. The correctness of the same is now canvassed by formulating the question of law to the effect that whether on the…

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