It Is Not Disputed Before Us That The Substantialquestions Of Law, Which Have Been Framed For Consideration, Havebeen Answered Against The Revenue By The Hon'bl v. Https://Hcservices.ecourts.gov.in/Hcservices

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 10.08.2021 CORAMTHE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMANDTHE HONOURABLE MR.JUSTICE SATHI KUMAR SUKUMARA KURUP T.C.A.No.135 of 2016 M/s.Poppys Knitwear P. Ltd.,33, M.P.Nagar,Tirupur-641 607...Appellant The Commissioner of Income Tax,Ward I(2), Tirupur...RespondentAppeal under Section 260A of the Income Tax Act, 1961againsttheorderdated28.01.2009madeinI.T.A.No.1599/Mds/2007 on the file of the Income Tax AppellateTribunal Bench 'A', Chennai for the assessment year 2004-05against the appellate order of the Commissioner of Income Tax(Appeals)-II,Coimbatore dated 19.03.2007 and made in I.T.AppealNo.410C/2006-2007 the Assessment year 2004-2005 and against theAssessment order of the Income Tax officer, ward 1(2), Tirupurdated 29.12.2006 and made in PAN/GIR No. , GIRNO.A23292 for the Assessment year 2004-2005. JUDGMENT (Delivered by T.S.Sivagnanam, J.) This appeal, by the appellant/assessee, filed under Section260A of the Income Tax Act, 1961 is directed against the orderdated 28.01.2009, made in I.T.A.No.1599/Mds/2007 on the file ofthe Income Tax Appellate Tribunal Bench 'A', Chennai for theassessment year 2004-05. 2.The appeal was admitted on 22.02.2016, on the followingsubstantial questions of law:-“(i) Whether, on the facts and in thecircumstances of the case, the Appellate Tribunal https://hcservices.ecourts.gov.in/hcservices/ is right in law in holding that deduction underSection 80HHC in the case of MAT assessment is tobe worked out on the basis of profit computedunder regular provisions of law applicable tocomputation of profit and gains of business orprofession? and (ii) Whether, on the facts and in thecircumstances of the case, the Appellate Tribunalis right in law in holding that in computing bookprofit under Section 115JB of the Act, thededuction under Section 80HHC should be limitedto 30% of profit from export business, asprovided under Section 80HHC(1B)?” 3.HeardMr.R.Kumar,learnedcounselfortheappellant/assessee and Mr.T.R.Senthil Kumar, learned SeniorStanding Counsel for the respondent/Revenue. 4.It is not disputed before us that the substantialquestions of law, which have been framed for consideration, havebeen answered against the Revenue by the Hon'ble Supreme Courtin the case of Ajanta Pharma Ltd. vs. Commissioner of Income-Tax[(2010) 327 ITR 305 (SC)]. The said decision was followed by aDivision Bench of this Court in the case of CIT vs. M/s.BannariAmman Sugars Ltd., [T.C.(A) No.163 of 2009 dated 30.07.2018], towhich one of us (TSSJ) was a party. The operative portion ofthe judgment reads as follows:- “4. The Tribunal decided the matter in favourof the assessee and in doing so, relied upon thedecision of the Special Bench of the MumbaiTribunal in the case of DCIT v. SyncomeFormulations (I) Ltd. and others reported in 292ITR 144 (AT) wherein, it was held thatcomputation has to be done under the book profitsand not under the normal computation.5. The legal issue was considered by theHon'ble Supreme Court in the case of AjantaPharma Ltd. v. Commissioner of Income Taxreported in 2010(327) ITR 0305 and it was heldthat clause (iv) of Explanation to Section 115 JBcovers full export profits of 100% as "eligibleprofits" and the same cannot be reduced to 80% byrelying on section 80 HHC(1B) and the argument ofthe Department that both "eligibility" as well as"deductibility" of the profit have to beconsidered together for working out the deductionas mentioned in clause (iv) of Explanation toSection 115JB is devoid of merits. 6. Thus, the decision of the Hon'ble SupremeCourt in Ajanta Pharma Ltd. (cited supra) appliesto the case on hand, as identical question hasbeen framed for consideration. Further, we notethat the decision of the said fact in SyncomeFormulations (I) Ltd. (cited supra) wasconsidered by the Hon'ble Supreme Court alongwith other decisions and the decision of theTribunal was confirmed in the case ofCommissioner of Income Tax v. Bhari informationsTechnology System (P) Limited reported in 2012(340) ITR 0593. 7. In the light of the aforesaid decisions,the substantial questions of law, which have beenframed for consideration is answered against theRevenue. Accordingly the Tax Case Appeal standsdismissed. No costs.” 5.Thus, by applying the above decisions, this appeal filedby the assessee is allowed and the substantial questions of laware answered in favour of the assessee. No costs. //True Copy// abr To 1. The Income Tax Appellate Tribunal Bench 'A', Chennai. 2. The Commissioner of Income Tax,Ward I(2), Tirupur. 3. The Commissioner of Income Tax (Appeals)-II, Coimbatore. 4. The Income-Tax Officer, Ward-1(2), Tirupur. PA(CO)RGA(31/08/2021)