COMMISSIONER OF INCOME TAX Vs. SPEL SEMICONDUCTOR LIMITED

JUDGEMENT

(1.) (Prayer: Appeal in T.C.(A) No,480 of 2008 is filed under section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'C' Bench, dated 27.7.2007 made in C.O.No,233/Mds/2005 in I.T.A.No.1594/Mds/2005. Appeal in T.C.(A) No,749 of 2008 is filed under section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, dated 21.8.2007 made in I.T.A.No.108/Mds/2005. Appeal in T.C.(A) No,806 of 2008 is filed under section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'B' Bench, dated 27.7.2007 made in I.T.A.No.1480/Mds/2005.) K. Raviraja Pandian, J. As the question of law involved in these tax cases is common, we have taken the first tax case appeal in T.C.(A) No,480 of 2008 as a typical case to state the facts.

(2.) THE assessee company is engaged in manufacture and sale of integrated circuits. THE assessee claimed deduction of Rs.2,28,66,239/- in respect of profits eligible for deduction under Section 80HHC of the Income-tax Act, 1961. Since the assessee's claim under Section 80HHC is nil, no deduction under Section 80HHC survives. Under Section 115JA as claimed under Section 80HHC will not change 115JA from what was under normal computation. Against that order, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), who allowed the alternative claim of the assessee. Against that order, the assessee preferred Cross Appeal before the Income-tax Appellate Tribunal and the Income-tax Appellate Tribunal held that the deduction under Section 80HHC of MAT assessment is to be worked out on the basis of the adjusted book profit and not on the basis of the profit computed under the regular provisions of law applicable to the computation of profits and gains of business or profession. THE correctness of the same is now canvassed by formulating the question of law to the effect that whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the deduction under Section 80HHC of the Act is a case of MAT assessment is to be worked out on the basis of the profit computed under the regular provision of law applicable to the computation of profits and gains of the business or profession."

(3.) IN view of the reasoning stated in the above decisions, the tax case appeals deserve to be dismissed and the same are dismissed by answering the question of law in favour of the assessee and against the revenue.