2016 (1) TMI 77

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....e AO to exclude the income of SEZ unit while computing Book Profit u/s115JB of the IT Act ignoring the amendment by Finance Act, 2007 w.e.f. 01.04. 2008 whereby the words 10A and lOB have been omitted from Explanation 1(f) and (ii) of section 115JB of the Act, thereby bringing the profit/loss of 10A & lOB units within the purview of MAT. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AG to exclude the income of SEZ unit while computing Book Profit u/s115JB of the IT Act without appreciating that clause (6) has been inserted by the Special Economic Zones Act, 2005 w.e.f. 10-02-2006 concurrently with the insertion of section 10AA, also by the Special Economic Zones Act, 2005 and....

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....5JB will not include the profits of SEZ unit was rejected. Though, the assessee in its reply submitted that the Tribunal in assessment years 2008-09 and 2009-10, has accepted assessee's claim that book profit under section 115JB will not include profits of SEZ Unit but the Assessing Officer rejecting such contention of the assessee held that profits of SEZ Unit has to be included in the book profit under section 115JB. Accordingly, he increased the book profit by Rs. 11,00,39,281. 3. Being aggrieved of such addition to the book profit made by the Assessing Officer, assessee preferred appeal before the first appellate authority. The learned Commissioner (Appeals), upon considering the fact that the Tribunal in assessee's own case ....

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....It is also observed that by the SEZ Act, sub-section (6) to section 115JB was also inserted providing that provisions of section 115JB shall not apply to the income accrued or arisen on or after 1.4.2005 from any business carried on, or services rendered, by an entrepreneur or a Developer, in a Unit or Special Economic Zone, as the case may be. Hence, income of units located SEZ will not be included while computing book profit for the purpose of MAT as per section 115JB(6) of the Act. In view of above, we are of the considered view that there is merit in the contention of ld A.R. that irrespective of the fact that amendment has been made in clause (f) of Explanation (1) to section 115JB(2) of the Act to apply the provisions of MAT in respec....