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2019 (5) TMI 1391 - MADRAS HIGH COURTDeduction u/s 80HHC - Computation of deduction - reducing the 'Export Profit' proportionately -Total Turnover of the assessee should be restricted to the Turnover of the Units engaged for export only - HELD THAT:- In view of the clear position of law as held by IPCA LABORATORY LTD [2004 (3) TMI 9 - SUPREME COURT] we are of the view that the Total Turnover of the business carried on by the Assessee has to be placed in the denominator in the formula given in sub-section (3) of Section 80HHC quoted above and there is no question of treating the Export Profit from the Export Units as separate units of the Assessee for the purpose of computing the benefit of deduction under sub-Section (3) of Section 80HHC. The very purpose of reducing the 'Export Profit' proportionately which may be from one or four units as in the present case is to give the average effect by arriving at the 'Export Turnover' as divided by the 'Total Turnover' of the Assessee of the Assessee during the year. Therefore, the entire Turnover of the business of the Assessee including the Export Turnover of the Appellant has to be included in the denominator of the formula stipulated in sub-section (3) of Section 80HHC of the Act viz., Export Profit x Export Turnover (of all Export Units)/Total Turnover (of Entire Business of Assessee including Export and other Turnover). Case of the Assessee not acceptable that the Turnover of the Assessee should be restricted to the Turnover of the Units engaged for export only. - Decided against assessee Deduction of expenditure u/s 35(I)(ii) - whether it is to be charged from the profits first and then only deduction u/s 80 HHC is to be computed? - HELD THAT:- No merit in the contention of Assessee so long as the Assessee carries on business and has business profits as declared by him and the expenditure incurred by way of contribution made to some approved institution for Scientific Research is concerned, the Assessee cannot claim it as a donation covered by the provisions of Section 80GGA so as to take it out from the scope of computation of business profits under Chapter IV Part D within which Section 35 (I)(ii) also is included. The object of raising such a contention before us appears to be to take some expenditure to be treated as donation so as to take it within the scope of Chapter VI-A which provides for deduction from the Gross Total Income, so that a higher profit can be treated as eligible for deduction u/s 80HHC. The said change of stand by the Assessee, particularly when the said Expenditure by way of contribution made to the approved Scientific institution has been claimed by the Assessee as business expenditure only, cannot be permitted. Therefore, the second question also deserves to be answered against the Assessee
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