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2013 (3) TMI 246 - RAJASTHAN HIGH COURTEligibility for deduction u/s 80-HHC(3C) - two separate Divisions of same business - setting off of loss in Unit III against the profit of Unit No.1 - Whether the turn over and profits/losses of the two Units being Unit No.1 and 3 could be clubbed together to determine the average profit/proportionate profits for the purpose of computing the deductions u/s. 80 HHC? - Held that:- The words “assessee being an Indian company or a person (other than a company) resident of India” is used in Section 80HHC. The different units of the same assessee company engaged in manufacturing of different goods viz. Granite slabs and tiles in Unit-I and Marble slabs and tiles in Unit-III does not make separate Units of the same assessee company as separate and different assessable units for the purposes of Section 80-HHC of the Act. Merely because for the purpose of its accounting politices or describing different units for the different goods manufactured and exports by it, the assessee has described the same as Unit, I, II and III in the present case, it does not mean that benefit of Section 80HHC can be given for Unit-I separately on its profit earned by exports while the loss of Unit-III remains unadjusted against such profit of Unit-I. The purpose of giving benefit of deduction under Section 80-HHC is to encourage the exports and profits derived by the assessee as such during the relevant year would form the basis for determining the extent of such deduction. As decided in IPCA Laboratory Ltd. case (2004 (3) TMI 9 - SUPREME COURT) deduction u/s 80HHC (3) (c) can be allowed only if there is a positive profit income in trading goods and if there is a loss in either of the two, then that loss has to be taken into account for the purposes of computing the profits. Deduction u/s 80HHC (3) (c) can be allowed only if there is a positive profit income in trading goods and if there is a loss in either of the two, then that loss has to be taken into account for the purposes of computing the profits - in favour of Revenue.
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