Law:

Section:

Section 80HHC, read with section 28, of the Income-tax Act, 1961 - Deductions - Exporters - Assessment year 1989-90 - Whether where an assessee is engaged in more than one business and is not exclusively engaged in business of export, his income from such exclusive business of export is not to be separately computed, but is to be carved out in proportion to his total business income computed in accordance with provisions of Act - Held, yes - Whether for purpose of section 80HHC, total turnover refers to turnover of business and not turnover of sale and purchase of goods - Held, yes - Whether because of retrospective insertion of clauses (iiia), (iiib) and (iiic) in section 28, income falling within these clauses has to be computed as income from business or profession for assessment year 1989-90 also and, therefore, income falling under these clauses cannot be excluded from computation of profits of business or profession for purpose of computing allowable deduction under section 80HHC - Held, yes - Whether excess interest earned by assessee on account of early payment of foreign exchange bills being directly related to export business would be part of income from export business - Held, yes Words and phrases : 'Total turnover' occurring in section 80HHC(3) of the Income-tax Act, 1961 FACTS For the assessment year 1989-90, the assessee-company, at the first instance, had filed a return of loss, and, therefore, no claim under section 80HHC was made. However, after amendment to the Act by inserting clauses (iiia), (iiib ) and (iiic) in section 28 with retrospective effect from 1-4-1962, 1-4-1967 and 1-4-1972, respectively, vide the Finance Act, 1990, the assessee filed revised return treating cash compensatory support received during the year as income from export business and, thus, showing positive income. While considering the income from 'profits and gains of business', the Assessing Officer disallowed inclusion of processing charges and the profit on sale of import licence and after deducting all those items, net balance was further reduced by the deduction claimed by the assessee under section 32AB resulting in a negative figure and, therefore, the…

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