FLEX FOODS LTD

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ITA - 1225 / 2010HC Delhi26 August 20101 pages
For Petitioner: MP RASTOGI
AI SummaryPartly Allowed

What did the High Court hold?

The High Court admitted the appeal on the substantial questions of law framed. The court did not decide the merits of the case in this order. The questions admitted for consideration are whether, for MAT assessment under Section 115JB, the export profits to be excluded from book profit under Explanation 1(iv) should be the amount computed under Section 80HHC(3) and (3A) before applying the restriction of Section 80HHC(1B), or the amount allowed as deduction under Section 80HHC(1B). The court also questioned whether the ITAT was correct in directing the exclusion of export profit at the figure of permissible deduction allowable under Section 80HHC(1B). The court issued notice to the respondent and dispensed with the filing of the paper book. No finding or decision on the substantial questions of law was made in this order.

What were the facts?

This case involves an appeal filed by Flex Foods Ltd. (the assessee) against an order of the Income Tax Appellate Tribunal (ITAT). The appeal is preferred under Section 260A of the Income Tax Act, 1961. The core of the dispute revolves around the calculation of book profit for Minimum Alternate Tax (MAT) purposes under Section 115JB of the Act. Specifically, the issue concerns the exclusion of export profits from book profit, as stipulated in Explanation 1, sub-clause (iv) of Section 115JB. The assessee is seeking clarification on how this exclusion should be computed, particularly in relation to deductions allowed under Section 80HHC.

What were the issues?

1. Whether, for the purpose of calculating book profit under Section 115JB of the Income Tax Act, 1961, under Explanation 1, sub-clause (iv), the export profits to be excluded are the amounts computed as per clauses (a), (b), or (c) of sub-sections (3) and (3A) of Section 80HHC, before applying the restriction in sub-section (1B) of Section 80HHC, or if it is the amount allowed as a deduction as per the provision of sub-section (1B) of Section 80HHC. Assessee's Contention: The assessee likely argues for a broader exclusion of export profits, potentially before the Section 80HHC(1B) restriction is applied, to reduce their book profit for MAT calculation. The judgment does not explicitly record the assessee's arguments but frames the question based on their appeal. Revenue's Contention: The revenue, represented by the CIT, likely contends that the exclusion should be limited to the amount actually allowed as a deduction under Section 80HHC(1B), thereby increasing the book profit for MAT purposes. The judgment does not explicitly record the revenue's arguments but frames the question based on the appeal admitted.

Which sections of the Income-tax Act were involved?

Section 260A,Section 115JB,Section 80HHC

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 1225/2010 . FLEX FOODS LTD ..... Appellant . . Through Mr. M.P. Rastogi with Mr. K.N. Ahuja, Advocates . versus . CIT ..... Respondent Through Mr. N.P. Sahni, Senior Standing Counsel. . CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN . O R D E R 26.08.2010 . CM 14737/2010 Allowed, subject to all just exceptions. ITA 1225/2010 The present appeal preferred under Section 260A of the Income Tax Act, 1961 (for short ?Act?) is admitted on the following substantial question of law :- i) Whether in law in the case of MAT assessment, for the purpose of calculating book profit under Section 115JB of the Act under Explanation 1, sub-clause (iv), the export profits to be excluded . ITA 1225/2010 Page 1 of 2 from the book profit would be the amount computed as per clause (a) or (b) or (c) of sub-sections (3) and (3A) of Section 80HHC of the Act before applying the restriction contained in sub-section (1B) of Section 80HHC or would be the amount allowed as deduction as per the provision of sub-section (1B) of Section 80 HHC? ii) Whether the Income Tax Appellate Tribunal was correct in law in directing to exclude export profit for the purpose of computation of adjusted book profit under Section 115JB, at the figure of permissible deduction allowable under Section 80HHC(1B)? . Issue notice to respondent. . As Mr. N.P. Sahni, learned senior standing counsel has entered appearance on behalf of respondent-revenue, no further notice need be issued. Filing of paper book stands dispensed with. . . CHIEF JUSTICE . . MANMOHAN, J AUGUST 26, 2010 rn . . . . . . ITA 1225/2010 Page 2 of 2 . #56 $

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