Law:

Section:

Section 80HHC, read with section 80AB, of the Income-tax Act, 1961 - Deductions - Exporters - Assessment year 1992-93 - Respondent/assessee was engaged in processing and export of cashewnuts - Assessee also purchased cashewnuts from outside parties (known as trading goods) and exported same to foreign countries - Assessee had profits in export of own manufactured goods but incurred loss in export of trading goods - Assessing Officer, while calculating deduction available under section 80HHC, deducted loss incurred in export of trading goods from profits derived from export of own manufactured goods - Whether in view of provisions of section 80HHC read with Explanation (baa), benefits available under sub-section (1) of section 80HHC is to be worked out in accordance with and subject to provisions of section 80HHC only - Held, yes - Whether, therefore, there is no scope for application of section 80AB in computation of profits derived from export business as provided under section 80HHC(3)(c)(i) read with Explanation (baa) - Held, yes - Whether Tribunal was, therefore, justified in its conclusion that for calculating amount of deduction under section 80HHC, loss incurred in export of trading goods could not be deducted from profits derived from export of own goods, i.e., manufactured goods - Held, yes FACTS The respondent-assessee was engaged in the processing of cashewnuts and its export. The assessee had also purchased cashewnuts from outside parties and exported the same to the foreign countries hereinafter referred to as 'trading goods'. The assessee had profit in the export of goods manufactured by it. But the assessee incurred loss in the export of trading goods. In the assessment year under consideration, the Assessing Officer computed the deduction available under section 80HHC by deducting the loss incurred in the export of trading goods from the profits derived from the export of own goods, i.e., manufactured goods. The assessee challenged the said deduction of loss in the computation of profits for the purpose of section 80HHC. The first appellate authority, however, confirmed the order of the Assessing Officer on said point. On second appeal, the…

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