TaxTMI 
TaxTMI 
1989 (7) TMI 167
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.... 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 Rs. 16,62,404, out of which he allowed deduction for depreciation at Rs. 1,58,104, and deduction for entertainment expenditure under s. 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 s. 80HHC at Rs. 1,73,386, 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 & Loss account in the sum of Rs. 27,91,979, was not income from exports. A notice was issued to the assessee who in his objection....
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....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." Sec. 80AB, on the other hand, reads as under: "80AB. Where any deduction is required to be made or allowed under any section (except s. 80M) included in this Chapter under the heading "C-Deductions in respect of certain incomes" in respect of any in....
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....h reference to the income from the particular source. The deduction under s. 80HHB is of an amount equal to 50% of such profits and the deduction under s. 80HHA is limited to an amount equal to 20% of such profits. A reading of ss. 80HHA and 80HHB would indicate earned from the particular activity and in case there are no profits no deduction can be allowed. Sec. 80HHC, on the other hand, does not make the income from export of goods as the basis for deduction. On the other hand, the admissible deduction is to be calculated as a percentage of the export turnover and the deduction is permissible not from the income from export business but from the total income of the assessee. Thus, there is material distinction in respect of the basis of d....
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....ferent species. The title is "Deduction in respect of export turnover." The concept of export profits or export earnings was not invoked in enacting s. 80HHC, as it stood at the relevant time and, therefore, although this section is placed under the aforesaid heading yet s. 80AB cannot be applied to this deduction because s. 80AB and 80HHC are incompatible with each other and s. 80HHC operates in an entirely different filed. We are, therefore, of the view that the IAC(A) had rightly allowed the deduction under sec. 80HHC from the total income of the assessee and the learned CIT's approach was erroneous and untenable. The order under appeal, therefore, is not sustainable and has to be set aside. 7. As regards the calculation of income fro....