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2011 (4) TMI 1159 - HC - Income TaxWhether the Appellate Authorities were correct in holding that 90% of the income derived from scrap sales and other sub-contract services cannot be excluded when computing the profits of the business under Section 80HHC of the Act in accordance with the Explanation (baa) to Section 80HHC of the Act despite the same having not been earned in the course of export – Held that:- assessee is in the business of manufacture of commutators and they export the commutators after manufacturing and they have export income. They also manufacture certain products which are sold locally. The scrap which is sold is generated in the course of the manufacturing activity. Therefore, it is clear both the subject matter of the sub contract and scrap arises out of the very same business of manufacturing of commutators carried on by the assessee. Therefore, it does not fall within the Explanation (baa) to Section 80HHC as rightly held by the tribunal as well as the appellate authority, decision of law is answered in favour of the assessee and against the revenue. Appeals are dismissed
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