IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 28.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Tax Case (Appeal) No.307 of 2009 The Commissioner of Income Tax, Chennai . ... Appellant Vs. M/s.Hydro S&S Industries Ltd., No.5, Smith Road Dhun Building 827,Anna Salai Chennai 2. .. Respondent Tax Case (Appeal) preferred under section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, dated 19.9.2008 made in ITA No.2193 /Mds/2007 for the assessment year 2000-01. For appellant: Mr.Arun Kurian Joseph Standing Counsel (Income Tax) JUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN,J.) The revenue is on appeal before us against the order of the Income Tax Appellate Tribunal, Madras A Bench, made in ITA No.2193 /Mds/2007 dated 19.9.2008 relating to the assessment year 2000-01. 2. The assessee is in the business of manufacture and sale of plastic components. For the assessment year 2000-01, the assessee filed its return on 30.11.2000 showing total income as nil after claiming deduction under Section 80HHC, 80IB and 80G of the Act. In the assessment order, the assessing officer restricted the deduction under Section 80IB to Rs.31,03,942/- in the computation of Book Profits for the purpose of section 115JA. Aggrieved by the said order the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who allowed the appeal in favour of the assessee. The revenue carried the matter on further appeal to the Income Tax Appellate Tribunal. The Tribunal allowed the appeal in favour of the assessee following an order of the Mumbai Special Bench in the case of Syncome Formulations (I) Ltd. The correctness of the same is now canvassed in this appeal by formulating the following substantial question of law:- Whether in the facts and circumstances of the case, the Tribunal was right in allowing deduction under Section 80IB on the basis of book profits under Section 115JA and not on the basis of eligible profits under Section 80IB as per normal computation? 3. When the matter is taken up for orders, the learned counsel appearing for the revenue fairly submitted that the issue is covered against the revenue and in favour of the assessee by the decision of the Division Bench of this Court in the case of COMMISSIONER OF INCOME TAX VS. RAJANIKANT SCHENELDER ANDASSOCIATES P. LTD (302 ITR 22) wherein it was held that the use of the words "in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act" in Section 115JA of of the Income Tax Act, 1961 is made for a limited purpose of empowering the Assessing Officer to rely upon the authentic statement of accounts of the company. While so looking into the accounts of the company, he has to accept the authenticity of the accounts with reference to the provisions of the Companies Act which obligates the company to maintain its accounts in a manner provided by that Act and the accounts to be scrutinised and certified by the statutory auditors and approved by the company in the general meeting and thereafter, to be filed before the Registrar of Companies, who has a statutory obligation to examine and be satisfied that the accounts of the company are maintained in accordance with the requirements of the Companies Act. Sub-section (1A) of Section 115JA does not empower the Assessing Officer to embark upon a fresh enquiry in regard to the entries made in the books of account of the company. It was further held by the Division Bench of this court that the assessing officer was not entitled to alter the profit and loss account prepared by the assessee under the provisions contained in the Companies Act while arriving at the book profit under Section 115JA and the book profit so arrived at should be basis for taxation and therefore, the computation under section 80HHC should be limited to the case of profits of eligible category only. The finding arrived at by the Tribunal was correct and in conformity with the decision of the Supreme Court. 4. The question of law framed in this appeal is identical to the one considered by the Division Bench. Hence, the appeal is dismissed as the question of law has already been decided in favour of the assessee and against the Revenue. krr To 1. The Commissioner of Income Tax Chennai 2. The Income Tax Appellate Tribunal, Chennai 'A' Bench, Chennai