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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI SANJAY ARORA, AM & SHRI AMARJIT SINGH, JM
O R D E R Per Sanjay Arora, A. M.: This is an Appeal by the Revenue directed against the Order by the Commissioner of Income Tax (Appeals)-17, Mumbai (‘CIT(A)’ for short) dated 07.8.2014, partly allowing the Assessee’s appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 (‘the Act’ hereinafter) for the assessment year (A.Y.) 2011-12 vide order dated 21.2.2014.
The issue arising in the instant appeal is the exigibility to tax under book profit tax u/s. 115JB of the Act of the income of the assessee’s SEZ Unit; the income there- from being otherwise exempt under Chapter III of this Act.
(A.Y. 2011-12) ITO vs. Hexagaon Nutrition Pvt. Ltd.
We have heard the parties, and perused the material on record. The facts are not in dispute. The assessee derives income from its’, as stated, sole Unit located in MEPZ-SEZ, Tamharam, Chennai. The Revenue disallows the assessee’s claim for exclusion of the profit of its said unit in the computation of book profit u/s. 115JB of the Act on the basis that the same, exempt u/s. 10A, would nevertheless stand to be included therein in view of the amendment to clauses (f) and (ii) of Explanation 1 to section 115JB by Finance Act, 2007 w.e.f. 01.4.2008, i.e., A.Y. 2008-09 onwards, omitting the words ‘section 10A or section 10-B’ there-from. The basis of the assessee’s claims is that its Unit is a SEZ unit, so that profit thereof would stand to be excluded from book profit tax (Minimum Alternate Tax – MAT) provisions by virtue of section 115JB(6), which reads as under: ‘Special provision for payment of tax by certain companies. 115JB. (6) The provisions of this section shall not apply to the income accrued or arising on or after the 1st day of April, 2005 from any business carried on, or services rendered, by an entrepreneur or a Developer, in a Unit or Special Economic Zone, as the case may be. Provided that the provisions of this sub-section shall cease to have effect in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 2012.’ The Tribunal, following its’ decision in Genesys International Corpn. Ltd. vs. Asst. CIT [2013] 55 SOT 10 (Mum), allowed relief to the assessee for A.Y. 2008-09 (in dated 08.5.2015/copy on record). The tribunal, in the case of Genesys International Corpn. Ltd. (supra), after analyzing the relevant provisions, held that even though clauses (f) and (ii) of Explanation 1 to section 115JB stand since amended, i.e., w.e.f. A.Y. 2008-09, the provision of section 115JB(6), brought on statute w.e.f. 01.4.2005, i.e., by Special Economic Zone Act, 2005 w.e.f. 10/2/2006, shall prevail, excluding the income of a SEZ unit from book- profit tax. That the income is otherwise exempt u/s. 10A (or for that matter section (A.Y. 2011-12) ITO vs. Hexagaon Nutrition Pvt. Ltd. 10B), it opined, is of no consequence. The tribunal, in arriving at its’ decision, also examined the provisions of the SEZ Act, 2005, also noting that the exception to the SEZ Units stands since withdrawn by proviso to s. 115-JB (6) with effect from assessment year commencing 01/4/2012 onwards. Reference in this regard be made to paras 21 & 22 of the order. No contrary decision by a higher court or, in fact, even by the tribunal, has been brought on record by the Revenue, despite the ld. DR seeking time for the purpose. We, therefore, according due deference to the said decisions by the tribunal, direct likewise, upholding the assessee’s claim. We decide accordingly.