2018-VIL-766-MAD-DT

MADRAS HIGH COURT

Tax Case (Appeal) No.163 of 2009

Date: 30.07.2018

THE COMMISSIONER OF INCOME TAX, COIMBATORE

Vs

M/s . BANNARI AMMAN SUGARS LTD.

For Appellant:Mr.T.R.Senthil Kumar, Senior Standing Counsel Assisted by M/s.K.G.Usha Rani, Junior Standing Counsel
For Respondent : Mr.R.Venkat Narayanan for M/s.Subbaraya Aiyar & Padmanabhan

BENCH

MR. T.S. Sivagnanam and Bhavani Subbaroyan, JJ.

JUDGMENT

T.S. Sivagnanam,

Heard Mr.T.R.Senthil Kumar, learned Senior Standing Counsel assisted by Ms..K.G.Usha Rani learned Junior Standing Counsel for the Revenue and Mr.R.Venkat Narayanan, learned counsel appearing for the respondent.

2. This  appeal by the Revenue is directed against the order  passed   by the Income Tax Appellate Tribunal in I.T.A. No.1824/Mds/2006   dated 15.02.2008.

3.  The above tax case appeal  has been admitted on the following substantial question of law :

"(i)  Whether on the facts and in the circumstances of the case, the  the Income Tax Appellate Tribunal is right in law in holding that  the assessee is entitled to deduction under BOHHC on the book profits under section  115 JA /JB even though the normal computation of business income was NIL?

(ii)  Whether on the facts and in the circumstances of the case, the  Income Tax Appellate Tribunal  is right in  deciding the issue in favour of the assessee by granting deduction under section BOHHC  while applying the Special provisions of section  115 JA /JB of the Income Tax Act for the assessment year 1999-2000?"

4. The Tribunal decided the matter in favour of the assessee  and in doing so, relied upon the decision of the Special Bench of the Mumbai Tribunal in the case of DCIT v. Syncome Formulations (I) Ltd. and others   reported in 292 ITR 144 (AT)  wherein,  it was held that  computation has to be done under the book profits  and not under the normal computation. 

5.  The legal issue was considered by the Hon'ble Supreme Court in the case of  Ajanta Pharma Ltd. v. Commissioner of Income Tax reported in 2010(327) ITR 0305 and it was  held that clause (iv)  of Explanation to Section 115 JB covers full export profits of 100% as "eligible profits" and the same cannot be reduced to 80% by relying on  section    80 HHC(1B) and the argument of the Department that both "eligibility" as well as "deductibility"  of the profit have to be considered together for working out the deduction as mentioned in clause (iv)  of Explanation to Section 115JB is devoid of merits. 

 6. Thus, the decision of the Hon'ble Supreme Court  in  Ajanta Pharma Ltd. (cited supra)  applies to the case on hand,  as identical  question has been framed for consideration.  Further, we note that  the decision of the  said fact in Syncome Formulations (I) Ltd. (cited supra)  was considered by the Hon'ble Supreme Court  along with other decisions and the decision of the Tribunal was confirmed  in the case of Commissioner of Income Tax v. Bhari informations Technology System (P) Limited reported in 2012(340) ITR 0593.

7. In the light of the aforesaid decisions, the  substantial questions of law,  which have been framed for consideration is answered against the Revenue.    Accordingly the Tax Case Appeal stands dismissed.  No costs.

 

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