Export deduction turnover excludes separately collected statutory levies; factual guest house findings raised no question of law.

Sales tax, excise duty and octroi collected separately on local sales were held not to form part of total turnover for deduction under section 80HHC, because the computation applies to export-linked profits and excludes statutory levies that are not part of the sale price or trading receipts. On the guest house expenditure issue, the Tribunal's finding that the assessee had provided a staff and workers' facility at the mine site, rather than a guest house, was treated as a pure finding of fact and no independent question of law arose. The reference applications therefore failed on both issues.

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Issues: (i) Whether sales tax, excise duty and octroi collected on local sales are to be included in "total turnover" for deduction under section 80HHC of the Income-tax Act, 1961. (ii) Whether the finding regarding the alleged guest house expenditure and the related disallowance gave rise to any referable question of law.

Issue (i): Whether sales tax, excise duty and octroi collected on local sales are to be included in "total turnover" for deduction under section 80HHC of the Income-tax Act, 1961.

Analysis: The deduction under section 80HHC is linked to profits derived from exports and the statutory formula proceeds on the basis of export turnover and total turnover. On the settled understanding of the provision, only receipts having nexus with sale proceeds and an element of profit enter the computation. Amounts collected separately as statutory levies such as sales tax, excise duty and octroi do not constitute income or trading receipts in the relevant sense; they are separately shown and are not part of the sale price. The Court also held that the precedent concerning sales tax collected by an auctioneer did not assist the revenue on these facts.

Conclusion: Sales tax, excise duty and octroi collected separately on local sales are not includible in total turnover for section 80HHC.

Issue (ii): Whether the finding regarding the alleged guest house expenditure and the related disallowance gave rise to any referable question of law.

Analysis: The Tribunal's conclusion rested on appreciation of facts that the assessee was not maintaining a guest house in the relevant sense, but was providing a structure with common facilities for staff and workers at the mine site. The disallowance or allowance turned on that factual determination. Such a finding of fact did not disclose any independent question of law warranting reference.

Conclusion: No referable question of law arose on the second issue.

Final Conclusion: The reference applications failed as no question of law arose from the Tribunal's order on either issue.

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