1990 (9) TMI 57

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....t, 1961. The petitioner's applications for approval of the agreements under section 80-0 were rejected by the Board on the ground that the agreements included supply of drawings, designs, etc., for construction projects within the meaning of section 80HHB and, therefore, the agreements were out of the ambit of section 80-0 in view of the provisions of section 80HHB(5). Admittedly, the Board did not, as such, examine whether the agreements in question satisfied the conditions laid down for approval in section 80-0 of the Act. This approach of the Board, in my judgment, is not quite correct. Section 80-0 clearly provides that where the gross total income of an assessee includes any income by way of royalty, commission, fees or any simil....

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....oner itself in Writ Petition No. 1330 of 1987 by the judgment delivered on March 23, 1990 (Gammon India Ltd. v. CBDT [1990] 184 ITR 458). A question was, however, raised as to whether it would be proper for the Board to ignore the overriding provisions of section 80HHB(5) in terms of which income of the nature covered by section 80HHB(1)(a) or (b) does not qualify for deduction under any other provisions under the heading 'C' of Chapter VI-A including section 80-O. In this context, it is desirable to mention that section 80HHB was brought into the Income-tax Act by the Finance Act, 1982, with effect from April 1, 1983. The Finance Bill, 1982, was introduced in the Lok Sabha on February 27, 1982. As per clause 18 of the Bill, section 80HH....

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....is purpose, it is proposed to insert a new section 80HHB in the Income-tax Act to provide that where an Indian company or a non-corporate taxpayer resident in India derives any profits and gains from the Business of execution of project under a contract entered into by him with the Government of foreign State or any statutory or other public authority or agency in foreign State or with a foreign enterprise, he will be entitled to a deduction, in the computation of his taxable income, of 25 per cent. of such profits and gains, subject to certain conditions. This concession will also be available where the assessee undertakes the execution of any work in connection with any foreign project undertaken by any other person." From the Notes on....