TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 299
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.... assessing the alleged book profits of Rs. 6,83,86,428/- and applying the MAT provisions u/s 115JB. The action of ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the rectification order applying the MAT provisions u/s 115JB. " 2. Briefly stated, the facts of the case are that the assessee filed its return of income declaring total income of Rs. 9,39,290/- and also claimed exemption u/s 10AA in respect of its unit situated at Pithampur, District. Dhar (M.P) which is engaged manufacturing and export of Polyethylene & Polypropylene Bags which are generally used for transportation of goods. The assessment u/s 143(3) was completed by the Assessing Officer by passing order u/s 143(3) dated 28.02.2015 wherein deduction u/s 10AA amounting to Rs. 5,67,17,090/- has been allowed to the assessee and the total income finally assessed comes to Rs. 15,64,483/-. Subsequently, notice u/s 154 was issued to the assessee on 17.05.2016 stating that on perusal of the assessment records, it reveals that the assessee was liable to pay tax of Rs. 1,36,82,585/- u/s 115JB on book profit of Rs. 6,83,86,428/- which was inadvertently not....
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....B, by way of sub-section (5) it has been provided as under: "Section 115JB(5): Save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company, mentioned in this section." 6. Further, the ld AR placed reliance on the following judicial pronouncements: * CIT vs. Metal & Chromium Plater (P.) Ltd. [2016] 76 taxmann.com 229 (Madras) * Sutlej Cotton Mills Ltd. Vs. ACIT [1993] 45 ITD 22 (SB) * ACIT vs. Shree Cement Ltd. ITA No. 614, 615 & 635/JP/2010 * JSW Steel Ltd. Vs. ACIT [2017] 82 taxmann.com 210 * Neha Home Builders (P.) Ltd. Vs. CIT (2018) 92 taxmanncom 102 (Mumbai-Trib.) dated 22nd January 2018 * Binani Industries Ltd., Kolkata vs. Department of Income Tax ITA No. 144/Kol/2013 7. It was submitted that the above judicial decisions prove beyond doubt that even if the eligible exemption u/s 10AA is not finding mentioned in explanation 1 for deduction from the profits shown as per the profit and loss account. The same is eligible and therefore not liable for MAT. 8. It was further submitted that the decisions relied upon the ld. CIT(A) are distinguishable on facts and therefore should not be applied in the i....
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....any previous year relevant to the assessment year commencing on or after the 1st day of April, 2012." 12. The proviso to sub-section (6) to section 115JB was introduced by the Finance Act, 2011 and the CBDT vide Circular No. 2/2012, dated 22-5-2012 has explained the said amendment which reads as under: "19. Provisions relating to Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) in case of Special Economic Zones 19.1.1 Under the existing provisions of section 10AA, a deduction of hundred per cent is allowed in respect of profits and gains derived by a unit located in a Special Economic Zone (SEZ) from the export of articles or things or from services for the first five consecutive assessment years; of fifty per cent for further five assessment years; and thereafter, of fifty per cent of the ploughed back export profit for the next five years. 19.1.2 Further, under section 80-IAB. a deduction of hundred per cent is allowed in respect of profits and gains derived by an undertaking from the business of development of an SEZ notified on or after 1st April, 2005 from the total income for any ten consecutive assessment years out of fifteen years beginning from the ye....
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....ified business in a unit in SEZ or as a developer of SEZ was not liable to pay MAT on the profits derived from the said business. However, the Finance Act, 2011 brought-in a sunset clause and inserts a proviso to subsection (6) to provide that, with effect from 1-4-2012, the provisions of subsection shall cease to have effect. Accordingly, a SEZ developer or any entrepreneur carrying on business in an SEZ unit (being a company) would be liable to pay MAT on the profits arising from the development of SEZ or the business carried on in an SEZ unit with assessment year 2012-13 and onwards. 14. In the instant case, it is not in dispute that the assessee carries on its business in an SEZ Unit and its income will therefore be subject to the provisions of Section 115JB of the Act. On bare reading of provisions of subsection (6) to section 115JB, it is crystal clear that provisions of section 115JB will apply to the assessee company for the assessment year beginning assessment year 2012-13 onwards. Therefore, while passing the assessment order u/s 143(3), where the Assessing officer has forgot to invoke the provisions of section 115JB of the Act, the matter clearly falls within purview of....
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..... The sub-section (5) to section 115JB has also been subject matter of interpretation by the Courts and it would be relevant to refer to these decisions which have been brought to our notice during the course of arguments by the ld AR. In case of CIT vs Metal & Chromium Plater (P) Ltd (Supra), the issue for consideration before the Hon'ble Madras High Court was whether claim under section 54EC for computing capital gains can be allowed while computing book profits as per section 115JB of the Act. In that context, the Hon'ble Madras High Court has held that section 115JB is a self-contained code of assessment and the levy of tax is on the book profits after effecting various adjustments as set out in terms of explanation thereto. It was further held that provisions of sub-section (5) of section 115JB open the assessment to the application of all other provisions contained in the Income Tax Act except specifically barred by that section itself. It was accordingly held that section 115JB admits grant of relief under section 54EC of the Act. In the instant case, the assessee company is eligible for relief under Section 10AA of the Act however the sub-section (6) specifically provides t....