Ajanta Pharma Limited vs Commr.Of I.T-9,Mumbai

The Supreme Court addressed the interpretation of Section 115JB and Section 80HHC of the Income-tax Act, 1961, determining whether the 'book profits' should be reduced by the amount of profits eligible for deduction under Section 80HHC or by the amount of deduction itself. The Court held that the profits eligible for deduction under Section 80HHC, as computed under its relevant clauses, should be considered for reduction in 'book profits' under Section 115JB. Consequently, the earlier decision of the Bombay High Court was set aside, favoring the assessee's claim for 100% export profits deduction.