TaxTMI 
TaxTMI 
1989 (7) TMI 165
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.... and the learned Departmental Representative and have perused the material placed before us. 3. The assessee derives income, inter alia, from export of goods. The IAC(A) determined the assessee's total income at Rs. 16,62,404, out of which he allowed deduction for depreciation at Rs. 1,58,104 and deduction for entertainment expenditure under sec. 37(2A) at Rs. 5,828. The net total income as determined by the assessing officer, thus, comes to Rs. 14,98,472 out of which he allowed deduction under sec. 80HHC at Rs. 1,73,386. 4. The Commissioner initiated action under sec. 263, as, in his opinion, the export business of the assessee did not yield any income and the miscellaneous income, that was credited to the profit and loss account in ....
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....assessment year any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, the following deductions, namely :-- (a) a deduction of an amount equal to one per cent of the export turnover of such goods or merchandise during the previous year ; and (b) a deduction of an amount equal to five per cent of the amount by which the export turnover of such goods or merchandise during the previous year exceeds the export turnover of such goods or merchandise during the immediately preceding year." Section 80AB, on the other hand, reads as under :-- "80AB. Where any deduction is required to be made or allowe....
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....cale industrial undertakings in certain areas and deduction under sec. 80HHB is admissible from profits and gains from projects outsideIndia. Such deductions are to be calculated with reference to the income from the particular source. The deduction under sec. 80HHB is of an amount equal to 50 per cent of such profits and the deduction under sec. 80HHA is limited to an amount equal to 20 per cent of such profits. A reading of secs. 80HHA and 80HHB would indicate that the deductions available under these sections are a proportion of the profits earned from the particular activity and in case there are no profits no deduction can be allowed. Section 80HHC, on the other hand, does not make the income from export of goods as the basis for deduc....
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....from a particular source is permitted to be deducted in computing the total income. This is clear from the various other sections under the heading "C -- Deductions in respect of certain incomes". Section 80HHC is very conspicuously different and its heading itself indicates that it creates an entirely different species. The title is "Deduction in respect of export turnover". The concept of export profits or export earnings was not invoked in enacting section 80HHC, as it stood at the relevant time and, therefore, although this section is placed under the aforesaid heading yet section 80AB cannot be applied to this deduction because sections 80AB and 80HHC are incompatible with each other and sec. 80HHC operates in an entirely different fie....