Section 80HHC deduction for supporting manufacturers depends on a valid disclaimer certificate from the main exporter.

A supporting manufacturer may claim Section 80HHC deduction on export incentives only if it produces a disclaimer certificate from the main exporter; on that basis, the deduction is to be recomputed accordingly. The text follows the Supreme Court principle in Janatha Cashew Exporting Co. v. CIT and notes that, where the supporting manufacturer status and disclaimer certificate are undisputed, the benefit is available in the same manner recognised for such claims under the provision.

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Issues: Whether a supporting manufacturer who has obtained a disclaimer certificate is entitled to deduction under Section 80HHC on export incentives in the same manner as a direct exporter.

Analysis: The issue was held to be covered by the Supreme Court decision in Janatha Cashew Exporting Co. v. CIT, which recognised entitlement to Section 80HHC benefits in the case of a supporting manufacturer upon production of a disclaimer certificate. The assessee was found to be a supporting manufacturer and to have produced the required disclaimer certificate from the main exporter, and these facts were not disputed by the Revenue.

Conclusion: The question was answered in favour of the assessee and against the Revenue.

Ratio Decidendi: A supporting manufacturer is entitled to claim deduction under Section 80HHC only when it produces a disclaimer certificate from the main exporter, and the deduction must then be recomputed accordingly.

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