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2012 (4) TMI 344 - BOMBAY HIGH COURTWhether on the facts and circumstances of the case, depreciation has to be allowed to the assessee while working out deduction under Section 80 HHC and also while working out income under the head Business” even if not claimed “ by the assessee in the return of income - assessee, while computing the total income, did not claim depreciation in respect of the assets used for the purpose of the assessee’s business. The depreciation was also not claimed while claiming deduction under Section 80 HHC of the Act. Further the assessee had while computing profits under Section 80 HHC (3)(c) from export of goods, which included both, own processed ore and trading goods, added losses incurred in export of trading goods to the profit of the business to arrive at adjusted profit of the business - The assessing officer by his order dtd. 17th March 1997 disallowed the depreciation in computing the gross total income of the assessee, but allowed the depreciation while computing deduction under Section 80HHC – Held that: depreciation has to be allowed to the assessee while working out deductions under Section 80HHC and also while working out income under the head business” even “ if not claimed by the assessee in the return of the income Where the profits of trading goods determined under Section 80HHC(3)(c)(ii) after deducting direct and indirect cost of trading goods from the export turnover of trading goods is a loss, then, whether such loss has to be ignored while computing deduction under Section 80HHC(1) of the Act - In the present case, the export turnover of trading goods is Rs.41,50,59,635/and direct/indirect costs are Rs. 35,81,34,588/and Rs.11,14,89,257/respectively. If the export turnover of trading goods amounting to Rs.41,50,59,635/is reduced by the direct and indirect costs amounting to Rs. 46,96,23,845/( Rs.35,81,34,588/+ Rs. 11,14,89,257/), the result would be loss of Rs. 5,45,64,210/. As per Section 80HHC(3)(c)(ii), the amount so determined i.e. Rs. 5,45,64,210/is liable to be treated as profits derived from export of trading goods - Held that: in calculating the profits under Section 80HHC(3)(c)(i), one has to necessarily reduce the profits determined under Section 80HHC(3)(c)(ii) and if there is loss, then, those losses in export of trading goods have to be adjusted cannot be faulted - The same analogy would apply where the assessee has issued a certificate to a supporting manufacturer – Decided in favor of the assessee
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