Law:

Section:

Section 80HHC of the Income-tax Act, 1961 - Deductions - Exporters - Assessment year 1989-90 - Assessee contended that since profit derived from export business was separately maintained and separately ascertained there was no need to have recourse to section 80HHC(3)(a) and (b); in such a situation, section 80HHC(1) can be applied in exclusion of sub-section (3) - Whether assessee's contention was not maintainable as section 80HHC disables permutation of profits irrespective of fact as to whether assessee maintains exclusively an account with respect to exports business while he carries on business which is a mixture of export as also domestic trade - Held, yes FACTS The assessee-company was deriving income from plantation by holding tea estates in two different places, i.e., in Assam and South India. It claimed deduction under section 80HHC contending that as exports profit was clearly detectable from the accounts maintained by it, the procedure laid down under section 80HHC need not be followed. The Assessing Officer rejected the assessee company's claim by holding that for the computation of the relief, the only basis should be to follow the rule in section 80HHC(3) after fixing the export turnover out of the total turnover. On appeal, the Commissioner (Appeals) held that the computation of the Assessing Officer was in accordance with the provisions of section 80HHC. On second appeal, the assessee contended that since the profit derived from export business was separately maintained and separately ascertained, there was no need to have recourse to section 80HHC(3)(a) and (b). In such a situation, section 80HHC(1) can be applied in exclusion of sub-section (3); therefore, there was no need for invoking sub-section (3)(b) for finding out what should be the deduction under section 80HHC. The Tribunal set aside the order of the Commissioner (Appeals) and called upon the Assessing Officer to re-examine whether the business in 'D' consisted exclusively of export and in that case compute the profits under section 80HHC(3)(a) and if it was not exclusively out of the export trade, to apply section 80HHC(3)(b). Further, the Tribunal restricted the turnover only to…

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