Law:

Section:

Section 80HHC of the Income-tax Act, 1961 - Deductions - Exporters Income surrendered during survey cannot be added to income from business for the purpose of calculation of deduction under section 80HHC [A/Y 1998-99] The plea raised by the assessee was to the effect that as the assessee was a 100 per cent export oriented unit and was not having any other source of income, the income surrendered by the assessee during survey on account of shortage of stocks had necessarily to be counted towards income from export earnings and consequently the assessee was entitled to the benefit of deduction thereon: Held that similar argument raised by the assessee an ITA No. 302 of 2005 - National Legguard Works v.CIT [2007] 288 ITR 18 (Punj. & Har.) was rejected by the instant court vide order dated 22-9-2006. It was held therein that the deduction under section 80HHC is available only on fulfillment of certain conditions specified therein and there can be no presumption that surrender made on account of difference found in the stock at the time of survey represents income from exports. Hence, the assessee was not entitled to add income surrendered during survey to the income from business for the purpose of calculation of deduction under section 80HHC. JUDGMENT Rajesh Bindal, J.-The assessee has approached this court, by filing the present appeal, raising the following substantial questions of law, arising out of order dated August 31, 2006, passed by the Income-tax Appellate Tribunal, Chandigarh Bench "A", Chandigarh in I.T.A. No. 757/Chandi/ 2002, for the assessment year 1998-99 : "(i)Whether, on the facts and circumstances of the case, the learned Tribunal was right in law in holding that the appellant is not entitled to deduction under section 80HHC as an exporter on surrendered income of Rs. 13.00 lakhs when it is not disputed that the appellant is not selling any goods within the country and is 100 per cent. export oriented unit ? (ii)Whether the learned Tribunal was right in law in holding that the deduction under section 80HHC is not admissible on the amount of Rs. 13.00 lakhs as the same has been shown as miscellaneous income, whereas it is settled law that…

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