2015 (3) TMI 405

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....os.541 and 542/08 :-  Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the relief under Section 80IA should be deducted from profits and gains of business before computing relief u/s 80HHC? 3. However, it is seen from the records, that in both the cases, the question of law raised is different. However, due to inadvertence, the same substantial question of law has been framed in both the appeals, though the said question of law framed vide order dated 3.7.08 relates only to TCA No.542/08. Accordingly, this tax case (appeal) filed by the assessee is ADMITTED on the following substantial question of law :- "Whether on the facts and in the circumstances of the case, the Trib....

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....efore it, passed the following order :- "5. As regards the second ground, after hearing the rival parties, we find that this issue is squarely covered against the assessee by the decision of the Chennai Bench of the Tribunal in the case of JCIT Vs Virudhunagar Textile Mills Ltd. (97 ITD 306) wherein it was held that wherever there is an element of profit, then such items has to be included in the total turnover. Following that decision, we set aside the order of CIT (Appeals) and direct the Assessing Officer to include the scrap sales in the total turnover for the purpose of determining deduction under Sec. 80HHC of the Act." Aggrieved by the said order of the Tribunal in allowing the appeal filed by the Revenue, the appellant/assesse....

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....the assessee would get under section 80HHC would decrease because the amount deductible substantially depends upon the ratio between the export turnover and the total turnover. If the export turnover is higher, comparatively the amount deductible under section 80HHC would be more ; or, in other words, if compared to the total turnover, export turnover is less, the amount deductible from the income under section 80HHC would be reduced. By virtue of the impugned judgment delivered by the High Court, the accounting method followed by the respondent-assessee has been approved and, therefore, this appeal is filed by the Revenue." 10. Accordingly, the Supreme Court, while interpreting the abovesaid provision, held as hereinbelow :- "26. If ....