TaxTMI 
TaxTMI 
2007 (7) TMI 225
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....rofit under Section 80 HHC, business profit should be adopted without taking into account unabsorbed depreciation carried forward from the earlier year ?" under the following facts and circumstances of the case. 2. The assessment years involved in these appeals are 1993-94 and 1994-95. The assessing officer, while processing the return of income filed by the assessee for the assessment year 1994-95 under Section 143(1)(a), worked out the deduction under Section 80HHC of the Income-tax Act, 1961 (in brevity 'the Act'), after deducting unabsorbed depreciation carried forward from the earlier year, by his assessment order dated 30.3.95. Aggrieved by the same, the assessee went on appeal before the Commissioner of Income....
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....sp; Against the said order of the Tribunal, the Revenue has filed T.C.(A) Nos.264 and 301 of 2004. 4. Heard both sides. 5. When an identical issue came up for consideration before this Court in Asvini Cold Storage P. Ltd. v. Commissioner of Income-tax [(2007) 290 I.T.R. 183], a Division Bench of this Court, while rejecting the case of the assessee therein, who placed reliance on the decision of the Bombay High Court in Commissioner of Income-tax v. Shirke Construction Equipments Ltd. [(2000) 246 I.T.R. 429 (Bom.)], followed the decision of the Apex Court in IPCA Laboratory Ltd. v. Deputy Commissioner of Income-tax [(2004) 266 I.T.R. 521 (SC)], and held as hereunder:- " ... Section 80 HHC of the Income-tax Act, 196....
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....rovisions of this Act, (before making any deduction under this Chapter), shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income". It may be seen that the provisions of section 80AB contemplate that the gross total income has first to be computed in accordance with the provisions of the Act. When it comes to a deduction, section 80AB further provides that for the purpose of deduction under any of the sections in Chapter VI-A, the amount of income of that nature has to be computed in accordance with the provisions of the Act, which means, necessarily for the purpose of deduction, the income of that nature computed for deduction mu....
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....he assessee would not be entitled to deduction. 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 deduction and if the net figure is a loss then the assessee will not be entitled to deduction. A plain reading of sub-section (3)(c) shows that profits from such exportshas to be profits of exports of self-manufactured goods plus profits of exports of trading goods. The opening words profit derived from such exports together with the word and clearly indicate that the profits have to be calculated by counting both the exports. Deduction can be permitted under section 80HHC(1) only if there is a positive prof....
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....income for the purpose of deduction under section 80HHC of the Act. The Appellate Tribunal is not correct in holding that the unabsorbed depreciation, unabsorbed business loss and unabsorbed investment allowance of earlier years cannot be deducted before granting deduction under section 80 HHC of the Act and that the provisions of section 80AB of the Act cannot be applied while determining the business profits under section 80HHC." 8. To both the above decisions of this Court, viz., Asvini Cold Storage P. Ltd. v. Commissioner of Income-tax [(2007) 290 I.T.R. 183] and T.C.No.62 of 2004 (between Commissioner of Income Tax-III v. M/s. Sharon Vaneers P. Ltd.) [2007] 294 ITR 18(Mad), one of us was a party (P.D.DINAKARAN, J.)....