Section 80HHC turnover comparison requires the same assessable entity; a firm's export turnover cannot be treated as a proprietor's turnover.

Deduction under section 80HHC based on comparison with the preceding year's export turnover requires the same assessable person in both years. A firm is a distinct assessable entity from an individual proprietor, so the firm's earlier export turnover cannot be treated as the proprietor's turnover merely because the business was later carried on in individual capacity. On these facts, the continuity condition for the relief was not satisfied, and the deduction was not available.

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Issues: Whether the assessee, who had taken over a jewellery export business from a firm and was carrying on the business as a sole proprietor in the relevant year, was entitled to deduction under section 80HHC on the basis of the export turnover of the preceding year when that earlier export turnover belonged to the firm.

Analysis: The deduction claimed was the category of relief that depended upon a comparison between the export turnover of the same person in the relevant year and in the preceding year. For that purpose, the person claiming the benefit in both years had to be the same assessable entity. A firm is a separate person and assessable unit under the Income-tax Act, 1961, distinct from an individual partner. The earlier export turnover of the firm could not be equated with the export turnover of the individual assessee merely because the business had been carried on by the assessee through the firm in the previous year and thereafter as a proprietor.

Conclusion: The assessee was not entitled to deduction under section 80HHC on the facts, because the necessary continuity of the same person and the relevant increase in export turnover of that person were not satisfied.

Ratio Decidendi: For deduction under section 80HHC based on comparison with the preceding year's export turnover, the claimant must be the same assessable person in both years, and the turnover of a firm cannot be compared with that of an individual proprietor as if they were the same entity.

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