2018 (6) TMI 1027

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....sions and of Rs. 4.77 crores u/s.115 JB. Later on a revised return was filed declaring total income of Rs. NIL, after claiming deduction of Rs. 6.07 crores u/s.10B and of Rs. 4.93 crores u/s.10AA of the Act. The assessee filed the revised book profit of rupees nil. The Assessing Officer (AO)completed the assessment on 13/03/2014, u/s. 143(3)of the Act, determining its income at Rs. 6.33 crores under normal provisions and book profit at Rs. 4.77 crores u/s.115 JB. 2.First effective ground of appeal is about allowing the claim made by the assessee u/s.10B of the Act. During the assessment proceedings, the AO found that the assessee had claimed deduction u/s.10B of Rs. 6.07 crores in respect of profits from exports from its unit at SEEPZ. He ....

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....t the honorable court has not decided the issue till date. Respectfully following the order of the Tribunal for the earlier years, we decide the first effective ground of appeal against the AO. 3.Second effective ground of appeal is about allowing the assessee's claim of deduction u/s.10B on interest income(Rs.3.19 lakhs)and exchange loss (Rs.10.32 lakhs), and hedging gain(Rs.19.70 lakhs).During the assessment proceedings, the AO observed that during the year under consideration the assessee has claimed deduction u/s.10B of the Act on the profits from SEEPZ unit which included interest income, miscellaneous income and hedging gains of Rs. 19,57,438/-. The AO was of the view that interest income, miscellaneous income and hedging gains were ....

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....or deduction u/s.10B of the Act. With regard to hedging income, he held that the debtors receivable were in foreign currency and were opened to exchange fluctuation, that the assessee has entered into forward contract with ICICI Bank for hedging its export proceeds to vulnerable exposure of currency risk and to hedge the exchange rate, that the transaction were done with the object of protecting the export vision of the assessee from the exchange fluctuation risk, that it had a direct nexus to the export, that hedging income was not derived from any scheme framed by the Government, it had a direct proximate nexus with the export business of the assessee. Accordingly, he held that hedging income was derived from export business and had asses....

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.... declaring book profit of Rs. 4.77 crores u/s.115JB,that it had paid tax on the same, that later on it revised its income declaring book profit at Rs. Nil. He directed the assessee to explain as to why MAT should not be completed as per the provisions of 115JB of the Act. After considering the submission of the assessee, the AO held that book profit was to be computed after making specified adjustment to the net profit, that the Finance 2007 widened the scope of MAT by including total income exempt u/s.10A & 10B in the book profit. He held that as per the memorandum explaining the provision of Finance Act,2007 MAT provisions were applicable to company on the income which was from any business or services derived from unit of SEZ, that provi....