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2016 (7) TMI 1322 - ITAT MUMBAIDenial of deduction u/s 80HHC - deduction u/s 80HHC was denied to the main exporter also, to whom the assessee (a supporting manufacturer) had sold its goods - Held that:- As it has been held by Hon’ble Gujarat High Court in the case of Avani Exports & Others [2012 (7) TMI 190 - GUJARAT HIGH COURT] that the amendment made by Taxation Laws (Amendment) Act 2005 in section 80HHC to curtail the benefit of u/s 80HHC on the amount of incentive received by the main exporters would not operate retrospective. Thus, if we consider on facts the case of ASL on merits also, it is noted that after including amount of incentives there would arise positive amount of profit. Thus, viewed from any angle, and keeping in view the fact that when deduction u/s 80HHC has been actually allowed in the hands of ASL i.e. export house, therefore, the whole premises of the AO based upon which the deduction was denied to the assessee, ceases to exist. Under these facts and circumstances, we find that Ld. CIT(A) has rightly allowed the benefit of deduction u/s 80HHC to the assessee and therefore, we find nothing wrong in the order of Ld. CIT(A) and therefore, the same is upheld. If the assessee is allowed u/s 80HHC then it cannot be allowed deduction u/s 80IB - Held that:- We send this issue back to the file of the AO who shall examine the facts and allow the deduction to the assessee u/s 80HHC as well as u/s 80IB so long as the aggregate amount of deduction does not exceed the amount of profits. Thus, the total amount of deduction allowable to the assessee under both of these sections should be restricted to the amount of profits. Thus, this ground may be treated as partly allowed for statistical purposes.
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