ITAT: Deduction u/s 80IA/80IB To Be Reduced From Business Profits For Computing Deduction u/s 80HHC

In the case of Madhusudhan Industries vs ITO, the Income Tax Tribunal has ruled that the deduction claimed by the appellant company under Section 80IA/80IB of the Income Tax Act should be deducted from Business Profits when calculating the deduction under Section 80HHC of the Income Tax Act.

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) based its decision on the ruling of a Larger Bench of the Supreme Court in the case of Micro Lab (supra), which was decided on 17.9.2018 in CA No.007427/2012. Additionally, the ITAT considered the judgment of the Honorable jurisdictional High Court in the case of Atul Intermediates (supra).

The main issue in the current appeal pertains to the deduction claim under section 80HHC of the Act. It involves determining whether the deduction should be calculated based on the residual profits after allowing the deduction under section 80IA of the Act, as per section 80IA(9) of the Act.

The counsel representing the assessee has acknowledged that the reference to the Larger Bench of the Supreme Court on this matter in the case of Micro Lab (supra) was dismissed on 17.9.2018 in CA No.007427/2012. Furthermore, the Honorable jurisdictional High Court has ruled against the assessee on this issue in the case of Atul Intermediates (supra).

Considering this concession, the grounds raised by the assessee hold no merit and are therefore the appeal also got dismissed.