Law:

Section:

Section 80HHC, read with section 28, of the Income-tax Act, 1961 - Deductions - Exporters - Assessment years 1990-91 to 1993-94 - Whether in order that an amount must be included in total turnover, it must either be purchase price or sale price or something incidental to transfer of goods dealt with by assessee - Held, yes - Whether processing charges received by assessee, a cashew nut exporter, for processing raw cashew nuts belonging to a third party in his factory cannot be included in definition of 'total turnover' in clause (ba) of Explanation to sub-section (4A) of section 80HHC and provisions of clauses (iiia), (iiib) and (iiic) of section 28 will not alter that position - Held, yes FACTS The assessee was a cashew nut exporter and was collecting charges from other concerns for processing their raw cashew nuts in his factory. He claimed that though the processing charges formed part of the income, the same could not be included in his total turnover while working out the deduction under section 80HHC. The Assessing Officer did not accept the assessee's claim on the ground that the processing charges should be included in the turnover when the same were includible in the business profit. On appeal, the Commissioner (Appeals) confirmed the impugned order. On further appeal, the Tribunal accepted the contention of the assessee and directed the Assessing Officer to exclude the processing charges from the total turnover. On appeal to High Court : HELD The relief under section 80HHC(1) is available only to persons who are engaged in the business of export out of India of any goods or merchandise belonging to them and with reference to the profits derived by the assessee from the export of such goods or merchandise. Sub-section (3) also makes the position clear that for the purposes of sub-section (1), the goods which are exported out of India must be goods or merchandise manufactured or processed by the assessee. [Para 13] The meaning given to the words 'total turnover' in clause (ba) of the Explanation to sub-section (4A) of section 80HHC itself refers to the goods or merchandise and the meaning centres around the goods dealt with by the assessee. In that…

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