COMMISSIONER OF INCOME TAX Vs. BEARDSELL LTD

JUDGEMENT

(1.) BY formulating the following Substantial Question of Law, the Revenue is on appeal against the order of the Income Tax Appellate Tribunal, Madras "a" Bench, dated 31. 12. 2007 made in ITA. No. 422/mds/2007. The relevant assessment year is 2002-2003.

(2.) THE facts as culled out from the statement of facts in the memorandum of grounds are as follows: the assessee company is engaged in the manufacture of Expander Polystyrene. For the assessment year 2002-03, the assessment was made on book profit basis. The assessee claimed that the benefit under Section 80hhc of the Act should be calculated taking the book profit as profits of the business. Since the actual profits of the business as per regular working was Nil and the carried forward losses had been set off, the Assessing Officer held that the assessee is not eligible for deduction under Section 80hhc of the Act. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income Tax (Appeals ). The Commissioner of Income Tax (Appeals) confirmed the computation of deduction under Section 80hhc of the Act based on the business profits computed under the normal provisions of the Income Tax Act and not with reference to the book profits. However, the Income Tax Appellate Tribunal on appeal being taken to it held that the computation of deduction under Section 80hhc of the Act is to be worked out on the basis of the adjusted book profits, since this is a MAT assessment. The correctness of the said order is now canvassed before this Court by filing this appeal.

(3.) WE heard the argument of the learned Senior Standing Counsel for the Revenue, who fairly submits that the issue involved in this case is covered by a decision of the Division Bench of this Court in which one of us is a party (K. Raviraja Pandian, J.) in COMMISSIONER OF INCOME TAX VS. RAJANIKANT SCHNELDER AND ASSOCIATES P. LTD. , reported in (2008) 302 ITR 22 (Mad), wherein after taking into consideration the ratio laid down by the Apex Court in SURANA STEELS P. LTD. , VS. DEPUTY COMMISSIONER OF INCOME TAX reported in (1999) 237 ITR 777 and in APOLLO TYRES LTD. , VS. COMMISSIONER OF INCOME TAX reported in (2002) 255 ITR 273 (SC), this Court has held as follows:-