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Section 80HHC of the Income-tax Act, 1961 - Deduction - Exporters While computing profit under section 80HHC, unabsorbed depreciation carried forward from earlier year has to be taken into account. [A.Y. 1993-94] & 1994-95. In view of the decision of the Apex Court in CIT v. Shirke Construction Equipment Ltd. [2007]291 ITR 380, while computing profit under section 80HHC, unabsorbed depreciation carried forward from earlier year has to be taken into account. Mrs. Pushya Sitaraman for the Appellant. T. N. Seetharaman for the Respondent. JUDGMENT P.D. Dinakaran, J.-The vexed substantial question of law, as raised by the Revenue, arises for consideration in these appeals is, "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that for computation of profit under section 80HHC, business profit should be adopted without taking into account unabsorbed depreciation carried forward from the earlier year ?" Under the following facts and circumstances of the case. The assessment years involved in these appeals are 1993-94 and 1994-95. The Assessing Officer, while processing the return of income filed by the assessee for the assessment year 1994-95 under section 143(1)(a), worked out the deduction under section 80HHC of the Income-tax Act, 1961 (in brevity "the Act"), after deducting unabsorbed depreciation carried forward from the earlier year, by his assessment order dated March 30, 1995. Aggrieved by the same, the assessee went on appeal before the Commissioner of Income-tax (Appeals), who, by order dated January 16, 1996, following the earlier order in the assessee's own case, held that the deduction under section 80HHC has to be computed after setting off carried forward unabsorbed depreciation and that such an adjustment was possible under section 143(1). But, on further appeal by the assessee, the Income-tax Appellate Tribunal, by its order dated November 13, 2003, following the decision of the Bombay High Court in the case of CITv. Shirke Construction Equipments Ltd. [2000] 246 ITR 429, allowed the claim of the assessee. Against the said order of the Tribunal, the Revenue has come forward with T.…

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