Deduction U/S. 80IA/80IB to be reduced from Business Profits for computing deduction U/s. 80HHC: ITAT

The Income Tax Tribunal in the matter of Madhusudhan Industries vs ITO has retreated that the deduction entitled to the appellant company U/S. 80IA/80IB of the Income Tax Act shall be reduced from Business Profits for the purpose of computing deduction U/s. 80HHC of the Income Tax Act.

Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) relied on decision of Larger Bench of the Supreme Court on this issue in the case of Micro Lab (supra) decided on 17.9.2018 in CA No.007427/2012 and Hon’ble jurisdictional High Court in the case of Atul Intermediates (supra).

Relevant Text:

As is evident from the above, the solitary issue raised in the present appeal relates to the claim of deduction under section 80HHC of the Act; whether to be computed on the residual profits remaining after allowing deduction under section 80IA of the Act in terms of section 80IA(9) of the Act. Since the ld.counsel for the assessee has fairly conceded that the reference to the Larger Bench of the Supreme Court on this issue in the case of Micro Lab (supra) has been dismissed on 17.9.2018 in CA No.007427/2012 and Hon’ble jurisdictional High Court has decided the issue against the assessee in the case of Atul Intermediates (supra), the grounds raised by the assessee merits no consideration and are dismissed.

The appeal of the assessee, is therefore, dismissed.

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