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May 2010

Company : Book profits : S. 80HHC and S. 115JA of Income-tax Act, 1961 : In case of MAT assessment amount deductible u/s. 80HHC has to be computed on the basis of adjusted book profits and not on basis of profit computed under the normal provisions.

By K. B. Bhujle | Advocate
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12 Company : Book profits : S. 80HHC and S. 115JA of
Income-tax Act, 1961 : In case of MAT assessment amount deductible u/s. 80HHC
has to be computed on the basis of adjusted book profits and not on basis of
profit computed under the normal provisions.




[CIT v. SPEL Semiconductor Ltd., 188 Taxman 130 (Mad.)]

The assessee-company was engaged in manufacture and sale of
integrated circuits. For the relevant year, the assessment was completed u/s.
115JA. The assessee claimed that the amount deductible u/s.80HHC has to be
computed on the basis of the adjusted book profits and not on the basis of the
profit computed under the normal provisions. The Assessing Officer rejected
the assessee’s claim. The Tribunal allowed the assessee’s claim.

On appeal by the Revenue, the Madras High Court upheld the
decision of the Tribunal following its judgment in the case of CIT v.
Rajanikant Schnelder & Associates (P) Ltd., 302 ITR 22 (Mad.).

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