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2013 (11) TMI 204 - ITAT MUMBAIDeduction u/s 80-HHE - Whether the 'total turnover' for the purpose of deduction u/s. 80-HHE would be the 'total turnover of the eligible unit' or 'the total turnover of all the units’ – Held that:- It was only the profits of the assessee's computer software business, christened as 'the eligible business', that would stand to be apportioned u/s.80-HHE(3) - it was only the total turnover of such eligible business that would stand to be taken in the denominator figure, with the export turnover having been already defined to be the qualifying export turnover of such business only - The assessee's manner of computation of deduction u/s. 80-HHE, thus, merits approval. It was only the profits of the eligible business, to the extent they were from or attributable to export out of India, which were subject to deduction under the section - No doubt, therefore, both global profits and global turnover could be considered for applying the proportionate turnover formula in determining the relevant profit, as indeed the language of the provision suggests - However, such a course is fraught with serious aberrations, leading to deduction being allowed on non-eligible profits on one hand, and being denied on the eligible profit, on the other. Non-segregation of the profits on the basis of activity, or even broadly, i.e., on the basis of trading and manufacturing sectors, which we find to have been the legislative response in respect of the para materia provision of s. 80-HHC by Finance Act, 1990 and Finance (No.2) Act, 1991, which also bore a similar computation formula based on the ratio of the relevant turnover, introducing some segregation in the computation mechanism of s. 80-HHC(3) and, correspondingly, concepts such as 'adjusted profits' and 'adjusted total turnover'. The provision of s. 80-HHE(3), however, has remained unchanged, so that the structural infirmity obtains - It was this rationalization that had guided the tribunal in interpreting the provision in a manner consistent with the intent of according the benefit there-under only to the profits from the specified, qualifying activity. The question of restricting the 'total turnover' to that of the eligible unit or business does not arise - A provision, even if beneficial, was to be read only in terms of its language, which was clear and unambiguous - If the intention of the Legislature was not to be found in the statute, its edict, it was to be found nowhere else - This was more so as not so reading may lead to the provision of s. 80HHE(3) being as rendered as of no consequence – Decided in favour of Assessee.
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