Chapter VI-A deduction overlap limits section 80HHC relief, while supporting-manufacturer export profits remain eligible subject to disclaimer certificate.

Section 80HHC relief cannot be computed by ignoring deduction already allowed under section 80-IB, because section 80-IB(13) read with section 80-IA(9) bars simultaneous benefit of overlapping Chapter VI-A deductions. Export profits earned by a supporting manufacturer through export houses may still qualify for section 80HHC relief, but only if the required disclaimer certificate is produced. The note also records that the claim to compute the deduction without first excluding carry forward or set-off losses was rejected as contrary to the governing precedent.

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Issues: (i) Whether deduction under section 80HHC of the Income-tax Act, 1961 could be computed after ignoring the deduction allowed under section 80-IB of the Income-tax Act, 1961 in view of section 80-IB(13) read with section 80-IA(9) of the Income-tax Act, 1961. (ii) Whether the assessee was entitled to reworking of relief under section 80HHC on export profits earned through export houses as a supporting manufacturer, and whether the claim regarding exclusion of carry forward or set off loss before computation of deduction could be accepted.

Issue (i): Whether deduction under section 80HHC of the Income-tax Act, 1961 could be computed after ignoring the deduction allowed under section 80-IB of the Income-tax Act, 1961 in view of section 80-IB(13) read with section 80-IA(9) of the Income-tax Act, 1961.

Analysis: Sections 80-IB and 80HHC both fall within Chapter VI-A. Section 80-IB(13) read with section 80-IA(9) specifically prohibits simultaneous benefit of the overlapping deductions. Therefore, while computing deduction under section 80HHC, the deduction already granted under section 80-IB cannot be taken into account.

Conclusion: The assessee was not entitled to claim both deductions simultaneously, and the computation made by excluding the section 80-IB deduction was upheld against the assessee.

Issue (ii): Whether the assessee was entitled to reworking of relief under section 80HHC on export profits earned through export houses as a supporting manufacturer, and whether the claim regarding exclusion of carry forward or set off loss before computation of deduction could be accepted.

Analysis: In light of the Supreme Court decision governing supporting manufacturers, export profit from goods exported through export houses is eligible for deduction under section 80HHC, subject to production of the disclaimer certificate issued by the export houses. The assessment therefore required reconsideration to that extent. The claim that deduction should be computed without first excluding carry forward or set off loss was rejected as it was contrary to the governing precedent on the point.

Conclusion: The assessee succeeded only to the limited extent of obtaining recomputation of relief under section 80HHC subject to proof of disclaimer certificate, while the claim concerning carry forward or set off loss failed.

Final Conclusion: The appeal was disposed of by upholding the bar against simultaneous deduction under sections 80-IB and 80HHC, but directing recomputation of the section 80HHC relief on the limited issue of supporting-manufacturer export profit, subject to the required certificate and hearing.

Ratio Decidendi: Where the statute expressly bars simultaneous benefit of overlapping Chapter VI-A deductions, the deduction under the earlier provision must be excluded while computing the later deduction; however, export profit of a supporting manufacturer may be included for section 80HHC relief if the statutory conditions, including the disclaimer certificate, are satisfied.

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