TaxTMI 
TaxTMI 
2007 (6) TMI 66
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....he returns filed under section 139 of the Act for the assessment year 1992-93, the assessee had claimed exclusion of excise duty paid from the total turnover for the purpose of computation of the deduction under section 80HHC of the Act. The case of the assessee was that as per the method of accounting consistently followed by it, the excise duty collected and paid has been credited to a separate account and treated as a liability in the accounts and not as the assessee's income and, therefore, it should not be included in the assessee's total income for the purpose of computation of deduction under section 80HHC of the Act. The assessing authority while calculating the turnover for the purpose of computation of deduction under section 80HH....
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.... statutory levy like excise duty is to be ignored?' 8 Learned senior counsel appearing for the Revenue would submit that the view taken by the Tribunal is contrary to the provisions of Explanation (ba) to section 80HHC of the Act. According to learned senior counsel, the said Explanation does not exclude excise duty from the definition of the total turnover. It is further contended that in view of the authoritative pronouncements of the apex court in the cases of Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13 (SC) ; MR 1978 SC 1496, Chowringhee Sales Bureau P. Ltd. v. CIT [1973] 87 ITR 542, Jonnalla Narashimharao and Co. v. CIT [1993] 200 ITR 588 and Addl. CIT v. T. Naggi Reddy [1993] 202 ITR 253, the excise duty colle....
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....he decision in Lakshmi Machine Works' case [2007] 290 ITR 667. In the said decision, the apex court has observed (page 688) "Before concluding we may state that profits are of three types, namely, book profits, statutory profits and actual profits. The amendments to section 80HHC(3) indicate exclusion of book profits. For example, commission, interest, etc., do form part of the profit and loss account but for the purposes of calculation of profits derived from local sales and exports, they stand excluded. The difficulty arises because the formula is based on hybrid system of profits, namely, actual and statutory profits. Therefore, the judgment should be read in the context of the above parameters. Our reasoning in the judgment is confin....
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....ich were in existence for the assessment year 1992-93 are in pan materia and identical. In view of this, the law declared by the apex court in Lakshmi Machine Works' case [2007] 290 ITR 667 can be safely applied for the assessment year 1992-93. 13 In Lakshmi Machine Works' case [2007] 290 ITR 667, the Supreme Court while considering whether the excise duty collected and paid should be excluded from the total turnover for the purpose of deduction under section 80HHC of the Act, has observed as follows (headnote) "Section 80HHC of the Income-tax Act, 1961, is a beneficial section it was intended to provide incentive to promote exports. The intention was to exempt profits relatable to exports. Just as commission received by the assessee ....