TMI Blog2007 (6) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... 93. 2 The facts in a nut-shell are 3 The assessee is a company engaged in the manufacture of switches, relays and potentio-meters. In the returns filed under section 139 of the Act for the assessment year 1992-93, the assessee had claimed exclusion of excise duty paid from the total turnover for the purpose of computation of the deduction under section 80HHC of the Act. The case of the assessee was that as per the method of accounting consistently followed by it, the excise duty collected and paid has been credited to a separate account and treated as a liability in the accounts and not as the assessee's income and, therefore, it should not be included in the assessee's total income for the purpose of computation of deduction under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duty could not form part of the total turnover? 2. Whether, on the facts and in the circumstances of the case and on an interpretation of section 80HHC(3), statutory levy like excise duty is to be ignored?' 8 Learned senior counsel appearing for the Revenue would submit that the view taken by the Tribunal is contrary to the provisions of Explanation (ba) to section 80HHC of the Act. According to learned senior counsel, the said Explanation does not exclude excise duty from the definition of the total turnover. It is further contended that in view of the authoritative pronouncements of the apex court in the cases of Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13 (SC) ; MR 1978 SC 1496, Chowringhee Sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the aforesaid decision will apply only to assessment year 1993-94 and not for any previous assessment years. In aid of this submission, learned counsel takes us to the penultimate paragraph of the decision in Lakshmi Machine Works' case [2007] 290 ITR 667. In the said decision, the apex court has observed (page 688) "Before concluding we may state that profits are of three types, namely, book profits, statutory profits and actual profits. The amendments to section 80HHC(3) indicate exclusion of book profits. For example, commission, interest, etc., do form part of the profit and loss account but for the purposes of calculation of profits derived from local sales and exports, they stand excluded. The difficulty arises because the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t undergone any change whatsoever. Therefore, it could be safely said that the provisions which came up for consideration before the apex court in Lakshmi Machine Works' case [2007] 290 ITR 667 and the provisions which were in existence for the assessment year 1992-93 are in pan materia and identical. In view of this, the law declared by the apex court in Lakshmi Machine Works' case [2007] 290 ITR 667 can be safely applied for the assessment year 1992-93. 13 In Lakshmi Machine Works' case [2007] 290 ITR 667, the Supreme Court while considering whether the excise duty collected and paid should be excluded from the total turnover for the purpose of deduction under section 80HHC of the Act, has observed as follows (headnote) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he formula in section 80HHC one has to give a schematic interpretation. The various amendments made therein show that receipts by way of brokerage, commission, interest, rent, etc., do not form part of business profits as they have no nexus with the activity of export. The amendments made from time to time indicate that they became necessary in order to make the formula workable. If so, excise duty and sales tax also cannot form part of 'total turnover' under. section 80HHC(3) : otherwise the formula becomes unworkable." 14 In view of the law declared by the apex court in the aforesaid decision and respectfully following the dictum laid down by the apex court, the question of law raised by the Revenue requires to be answered in the nega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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