{"id":2776,"date":"2011-03-02T21:01:31","date_gmt":"2011-03-02T15:31:31","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=2776"},"modified":"2011-03-02T21:01:31","modified_gmt":"2011-03-02T15:31:31","slug":"cit-vs-packworth-udyog-kerala-high-court-full-bench-for-s-115jajb-s-80hhc-deduction-to-be-computed-as-per-normal-provisions-not-on-pl-profits","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/cit-vs-packworth-udyog-kerala-high-court-full-bench-for-s-115jajb-s-80hhc-deduction-to-be-computed-as-per-normal-provisions-not-on-pl-profits\/","title":{"rendered":"CIT vs. Packworth Udyog (Kerala High Court – Full Bench)"},"content":{"rendered":"\n\n
Click here to download the judgement (packworth_udyog_80HHC_115JB.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nFor s. 115JA\/JB s. 80HHC deduction to be computed as per normal provisions & not on P&L profits
\n<\/strong><\/p>\n

Though the assessee was not entitled to any deduction u\/s 80HHC under the normal provisions of the Act owing to losses, it claimed that in computing the book profits u\/s 115JA\/115JB, deduction u\/s 80HHC ought to be computed having regard to the profits as per the P&L A\/c as held in GTN Textiles<\/strong> 248 ITR 372 (Ker). On appeal, the matter was referred to the Full Bench. HELD by the Full Bench:<\/p>\n

(i) The assessees’ contention that export profit has to be computed with reference to the P&L A\/c<\/strong> prepared under the Companies Act is not acceptable<\/em><\/strong> because there is no such provision in s.80HHC to determine export profit with reference to P&L A\/c. Clause (iv) of s. 115JB (2) provides that the “amount of profit eligible for deduction u\/s 80HHC as computed u\/s 80HHC (3)” has to be deducted in computing the book profits. Accordingly, only the deduction u\/s 80HHC as computed under the normal provisions is allowable<\/strong>;<\/p>\n

(ii) However, in accordance with Ajanta Pharma<\/a><\/strong> 327 ITR 305 (SC), the restriction in s. 80AB or s. 80B(5) should not be applied<\/strong> and deduction u\/s 80HHC should be allowed for s. 115JA\/JB even if the carry forward of business loss or depreciation reduces the gross total income to Nil<\/strong><\/strong>.<\/p>\n

\nNote<\/strong>: The same view as regards the P&L profits has been taken in Al-Kabeer Exports<\/strong> 233 CTR 443 (Bom)\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The assessees’ contention that export profit has to be computed with reference to the P&L A\/c<\/strong> prepared under the Companies Act is not acceptable<\/em><\/strong> because there is no such provision in s.80HHC to determine export profit with reference to P&L A\/c. Clause (iv) of s. 115JB (2) provides that the “amount of profit eligible for deduction u\/s 80HHC as computed u\/s 80HHC (3)” has to be deducted in computing the book profits. Accordingly, only the deduction u\/s 80HHC as computed under the normal provisions is allowable<\/strong><\/p>\n

Read more ›<\/a><\/div>\n

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