TaxTMI 
TaxTMI 
2014 (9) TMI 884
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....en framed. Whether on the facts and in the circumstances of the case, the Tribunal is correct in holding that the deduction U/s. 80 HHC of the Income Tax Act, 1961 be allowed on the gross total income and not on net total income? 2. The respondent is an industry and is assessed to income tax. It undertakes Export of manufactured goods. In the returns submitted for the assessment year 1993-94, it claimed deduction under Section 80-HHC of the Income Tax Act, 1961 (for brevity the Act). The controversy was about the stage of deduction. 3. According to the respondent, the deduction of the amount covered under Section 80-HHC of the Act can be done at the threshold i.e., before deduction of unabsorbed losses or carried forward depreciati....
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....count the scheme under Chapter VIA of the Act. He submits that the deduction provided for under Section 80- HHC is of a separate category and it is to be effected from the corresponding total income in contra distinction to the gross total income. 6. One of the important steps in processing the returns of an assessee, where it is an industry, is the identification of deductions that are allowed under Chapter VIA of the Act. It can safely be observed that Chapter VIA of the Act is one of the most oft amended part of the Act. The Parliament has to take into account, the deductions of different categories to be allowed for various classes of assessees. Even while permitting deductions, extreme care is to be taken, to ensure that the assesse....
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....dia within the meaning of sub-section (6) of section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India. (2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non- resident includes all income from whatever source derived which (a) is received or is deemed to be received in India in such year by or on behalf of such person; or (b) accrues or arises or is deemed to accrue or arise to him in India during such year. Explanation 1:-- Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of th....
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....in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income. 11. The deductions in favour of an Exporter of manufactured goods, is provided under Section 80-HHC. It occurs under the heading C. When the respondent sought deduction of the amount referable to that section, at the threshold itself, from the corresponding income, the Assessing Authority objected to it and insisted that it should be done only at the end. In a way....
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....to be made while determining the total income which is part of the gross total income. The language employed in Section 80-HHB of the Act is somewhat different. No reference is made to the total income. All profits and gains from projects outside India are to be made from the gross total income. So is the case with the deductions under Section 80-HHBA. In contrast, the deductions made under Section 80-HHC, which are in respect of profits retained from export business, the deduction is required to be made from the total income. This distinction is worth being taken note of. 15. Once the deductions under Section 80-HHC are to be made from total income, there may not be any justification to insist that it shall be the first of all the deduc....