Law:

Section:

Section 115JB, read with section 80HHC, of the Income-tax Act, 1961 - Minimum alternate tax - Assessment year 2001-02 - Whether clause (iv) of Explanation to section 115JB covers full export profits of 100 per cent as 'eligible profits' and same cannot be reduced to 80 per cent by relying on section 80HHC(1B) - Held, yes - Whether, therefore, for determining 'book profits' in terms of section 115JB, net profits as shown in profit and loss account have to be reduced by amount of profits eligible for deduction under section 80HHC and not by amount of deduction under section 80HHC - Held, yes FACTS The assessee was a MAT company at the relevant time. While computing its 'book profits' under section 115JB, the assessee claimed reduction under clause (iv) of the Explanation to section 115JB at 100 per cent of export profits. The Assessing Officer, however, allowed only 80 per cent of the export profits in terms of section 80HHC(1B), as being allowed for reduction of 'book profits' under clause (iv) of the Explanation to section 115JB. On appeal, the Commissioner (Appeals) held that 100 per cent of export profits earned by the assessee as computed under section 80HHC(3) were eligible for reduction under clause (iv) of the Explanation to section 115JB. The order of the Commissioner (Appeals) was upheld by the Tribunal. On the revenue's appeal, the High Court decided in favour of the revenue. On appeal to the Supreme Court : HELD Sections 80HHC and 115JB operate in different spheres. Two essential conditions for invoking section 80HHC(1) are that the assessee must be in the business of export; and secondly, the sale proceeds of such exports should be receivable in India in convertible foreign exchange. Section 80HHC(1) refers to 'eligibility', whereas section 80HHC(3) refers to computation of tax incentive. Coming to section 80HHC(1B), it is clear that after the Finance Act, 2000, with effect from the assessment year 2001-02, exporters would not get 100 per cent deduction in respect of profits derived from exports but they would get deduction at 80 per cent in the assessment year 2001-02; at 70 per cent in the assessment year 2002-03 and so on. Thus, section 80HHC(1B)…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492