TMI Blog1997 (5) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... . Relevant facts in this case are that assessee had claimed deduction under section 80HHC at ₹ 15,353 and ₹ 72,054 for assessment years 1987-88 and 1988-89 respectively. The Assessing Officer allowed the deduction as claimed by the assessee. The CIT on examination of the records was of the view that the assessee has been given excessive deduction as the same was to be computed proportionately with reference to the total turn-over vis-a-vis the export turn-over. According to the calculation made by the CIT, deduction allowable to the assessee was ₹ 9,088 and ₹ 24,437 for assessment years 1987-88 and 1988-89 respectively. He, accordingly, issued a notice to the assessee inviting objections as to why the order of the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total profits of a business the total turn-over is the turn-over on account of sale of goods and the other receipts are not to be included in the total turn-over. It was, accordingly, contended that the order of the CIT may be cancelled or modified, as the case may be. 5. The learned Departmental Representative, on the other hand, relied upon the orders of the revenue authorities. 6. We have given our careful consideration to the rival contentions. In this case, the controversy relates to the deduction under section 80HHC which is the deduction provided out of export profits. There is no difficulty in calculating the deduction under section 80HHC in case assessee';s income is exclusively from exports. However, there have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale of goods and that the other receipts do not fit-in within the definition of the turn-over. If the plea of the assessee is accepted then the export turn-over and total turn-over are same and assessee gets full deduction in respect of the entire profits of the business. On interpretation of section 80HHC as it existed before the amendment by the Finance (No. 2) Act of 1991, w.e.f. 1-4-1992, several Benches of the Tribunal have accepted the plea as canvassed in this case on behalf of the assessee. In the case of International Research Park Laboratories Ltd. (supra), the Special Bench of the Tribunal accepted the claim of the assessee. In that case, the commission was held to be included in the profits of the business but not in calculating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of interpretation laid down by their Lordships of the Supreme Court in the case of K.P. Varghese v. ITO (1981) 131 ITR 597/ 7 Taxman 13could have been of great assistance in interpreting the provision. Their Lordships of the Supreme Court held - A statutory provision must be construed, if possible, in such a manner that absurdity and mischief may be avoided. Where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the Legislature, the Court may modify the language used by the Legislature or even do some violence to it, so as to achieve the obvious intention of the Legislature and produce a rational construction. There is no difficulty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction or course of business; also the money receipts of a business for a given period. It is clear that as per the dictionary meaning of the word ';turn-over';, the entire receipts in business would fall within the meaning of the turn over. When we see the context with which section 80HHC has used the word ';total turn-over'; coupled with the intention of the Legislature to grant deduction with regard to the export profits only there is no doubt in our minds that the total turn-over would mean the entire receipts of business not necessarily in regard to sale of goods. This is a possible view which has been taken by the CIT, Administration in this case in exercise of his powers under section 263 though the basis for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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