2014 (5) TMI 551

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....: "The assessee company is engaged in manufacturing of gear boxes coupling and standard accessory in their factory at Calcutta. Most of the assessee's customers are industries like Cement, Papers, Power House, Railways, Mining etc. The assessee has also got a software business called Computer Aided Design Software at Chennai. This was established as a separate line of activity in Chennai to export 100% of its product." In computing the income of the assessee, the Assessing Officer computed the income arising out of the business in respect of gear box etc under the heading "A" and in respect of the software business under the heading "B". In other words, these two different activities were differently treated even in the assessment ord....

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....as the first question is concerned, it was pointed out by Mr. Bajoria, learned Senior Advocate appearing for the appellant, that Section 80HHC contemplates a case where the assessee is engaged "in the business of export out of India of any goods or merchandise except" "minerals and mineral oil", whereas Section 80HHE contemplates a case where the assessee is engaged "in the business of export of computer software or in the business of providing technical services outside India." Mr. Bajoria submitted that it is altogether erroneous to proceed on the basis that the sections operate in the same field or are intended to cover the same activity. Therefore, the ratio of the judgments arising out of any interpretation of Section 80HHC cannot b....

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....foresaid sections but they certainly operate in different fields. The objects of operation of the aforesaid two sections are altogether different. Therefore, in deciding a question arising out of Section 80HHE, if the judgments rendered in the cases arising out of Section 80HHC are to be applied then a wrong result is bound to follow. We are, as such, of the opinion that the first question, formulated above, must be answered in the affirmative and in favour of the assessee. In so far as the second question is concerned, Mr. Bajoria drew our attention to a judgment of the Delhi High Court in the case of C.I.T. vs. Padmini Technologies Ltd., reported in 254 CTR 611. The assessee, in the case before Delhi High Court, was running and managin....

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.... the business, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee." From a combined reading of the aforesaid two sub-sections it can be said that the business referred to in sub-Section (3) is the business appearing from sub-Section (1). What did the legislature have in mind while using the word "business" has not been left unidentified. In sub- Section (1), the word "business" has itself been defined in clauses (i) and (ii) of sub-Section (1) quoted above. Therefore, the conclusion is bound to be that the turnover of business which can be taken into account is only the turnover of the computer software or in respect of providing technical service as the case may be. Any refe....