2022 (8) TMI 360

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....ial question of law: Whether the Tribunal was right in holding that the deduction under section 80HHC is not allowable? 2. The appellant / assessee is engaged in the business of export of sea foods. They filed return of income for the assessment year 1993-94 on 31.12.1993 admitting a sum of Rs.3,77,024/- after claiming deduction under section 80HHC at Rs.60,52,478/- and the same was originally, processed under section 143(1) of the Income Tax Act (in short, "the Act") on 04.07.1995. However, the said assessment was re-opened by issuance of notice under section 148 on 09.04.1999. In response, the assessee requested the Assessing Officer to treat the return filed earlier as the one filed in response to notice under section 148. Du....

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....e Revenue preferred appeals before the Tribunal, which, by the common order dated 07.07.2006, allowed the appeals filed by the Revenue. Therefore, the assessee is before this court with these two appeals. 5. Heard the submissions made by the learned counsel appearing for both sides and perused the materials available on record. 6. As stated earlier, the order passed by the Income Tax Appellate Tribunal, relating to the claim of deduction under section 80HHC for the assessment years 1993-94 and 1997-98, is questioned by the assessee in these appeals. It is an admitted fact that there was a loss in one unit of the assessee's business and the deduction under section 80HHC is arrived at a loss, while computing the deduction. 7. Acc....

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....ion has to be as per the wordings of that section. When the legislature wanted to take exports from self-manufactured goods or trading goods separately, it has already so provided in sub-sections (3)(a) and (3)(b). The word "profit" in sections 80-HHC(1) and sections 80-HHC(3)(a) and (b) means a positive profit. In other words, if there is a loss then no deduction would be available under section 80-HHC(1) or (3)(a) or (3)(b). In arriving at the figure of positive profit, both the profits and the losses will have to be considered. If the net figure is a positive profit then the assessee will be entitled to a deduction. If the net figure is a loss then the assessee will not be entitled to a deduction. The opening words "profit derived from s....