Book Profit U/s 115JB

[PANKAJ JAIN]

In computing the book profit under section 115JB, is it the amounts of Profit eligible for deduction as computed under section 80HHC (3)(a)-(c)/(3A) or it is an amount of deduction claimed under section 80HHC (as computed under section 80HHC)? If it is the amount of profit eligible for deduction, can we still claim this deduction for AY 2007-2008 as the eligible profits can still be computed under section 80HHC(3)(a)-(c) /3A?

[taxexpert]

The first issue is covered in favour of the assessee by the decision in Govind Rubber 89 ITD 457 where it was held "For the purpose of determination of book profit under s. 115J assessee was entitled for deduction of profit attributable to export under s. 80HHC even though the assessee was denied deduction under s. 80HHC because of the provisions of s. 80A as the income computed for the assessment year under consideration was negative though the book profit attributable to export under s. 80HHC was positive."

However, the issue is now pending before the Special Bench in the case of Syncomp which was heard on 3rd January. The decision is awaited.

The second issue is on a week footing IMHO. If no deductions are to be allowed under the section itself (as opposed to a case where you are entitled to a deduction but you do not get it owing to other factors), can you still say you are "entitled" to a deduction? I don't think so.

[Paras S. Savla]

The decision of Special Bench case in M/s Syncom Formulations has also dealt with Section 115JB

The decision itself is the answer to your question