2016 (11) TMI 719

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....admitted on November 20, 2008 and the following question of law as suggested by the Revenue was admitted by the court : "Whether under the facts and circumstances of the case, the Income-tax Appellate Tribunal, "E" Bench Kolkata erred in law in allowing the assessee's appeal and directing the Assessing Officer to exclude foreign exchange receipts taken into account for the purpose of deduction under section 80HHD of the Income-tax Act, 1961 from the total turnover for the purpose of calculation of deduction under section 80HHC of the Income-tax Act, 1961 ?" 2. Mr. Bhowmik, learned advocate appearing for the appellant/Revenue submitted, at the very outset, that there is an inadvertent error in the question formulated, in that, the lea....

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....ase of CIT v. Chloride India Ltd. [2002] 256 ITR 625 (Cal). According to the said judgment of the hon'ble High Courts, deduction eligible under section 80HHC would be in the following manner : Profits arising of the business X Export (turnover export Total turnover of the business On reading of section 80HHC, it would be evident that neither the profits contain profits of hotel business nor the export turnover contains the receipts from hotel business. In that event, if the total turnover includes the receipts from hotel business, the entire claim will be wayward and the basic intention of proportionate deduction would be redundant. As per the said judicial pronouncements, the turnover should be restricted to such receipts which h....

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.... of the Explanation to section 80HHC ; (c) 'services provided to foreign tourists' shall not include services by way of sale in any shop owned or managed by the person who carries on the business of a hotel or of a tour operator or of a travel agent ; (d) 'authorised dealer', 'foreign exchange' and 'Indian currency' shall have the meanings respectively assigned to them in clauses (b), (h) and (k) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999) ; (e) 'eligible issue of capital' means an issue made by a public company formed and registered in India and the entire proceeds of the issue is utilised wholly and exclusively for the purpose of carrying on the business of- (i) se....

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....n allowed to him. The question arose with respect to the quantum of deduction available to the assessee. The Assessing Officer was of the opinion that in arriving at the income earned by the assessee from export business the turnover of the hotel business has to be taken into account. In that case the percentage of his profit shall go down. It was not the intention of the Legislature that the benefit under section 80HHC is to be regulated by the turnover of the hotel business to which section 80HHD is applicable. Sections 80HHC and 80HHD are two different channels. They provide for benefit of two different characters. The benefit receivable under section 80HHC is not regulated by the benefit received or receivable by the assessee under sect....