COMMISSIONER OF INCOME TAX Vs. FUTURA POLYESTER LIMITED

JUDGEMENT

(1.) THE revenue on appeal against the order of the Income Tax Appellate Tribunal, dated 31. 07. 2008 passed in ITA Nos. 357 to 360/mds/2008 n respect of the assessment years 1998-99 to 2001-02.

(2.) THE assessee is a domestic company engaged in the business of manufacture and export of polymers, plastic and polymerised products. For the assessment years 1998-99 to 2001-02, the assessee company filed return showing a loss under the head "business". The Assessee company offered to tax certain income computed under section 115ha and claimed a deduction u/s 80hhc while computing the profit u/s 115jb. The Assessing Officer held that the assessee is not entitled to any deduction under section 80hhc while determining the taxable income on the basis of the book profit under Section 115ja since the computation of business income under the regular provisions resulted in nil figure for each of the assessment years. The Assessing Officer found that since there was no eligible provisions governing "profits and gains of business or profession", the assessee company is not entitled for any deduction under section 80hhc from its book profits as per clauses (viii) (iv) of the Explanation appended to section 115ja and completed the assessment.

(3.) THIS finding of the assessing officer has been reversed by the Commissioner of Income Tax (Appeals) on appeal being filed by the assessee by holding that for the purpose of computing book profit under Section 115ja, relief u/s 80 HHC has to be worked out on the basis of the book profits as against the normal computation of income.