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2012 (8) TMI 460 - HC - Income TaxComputation of export profit allowable for deduction u/s 80HHC - appellant claimed deduction of export profit u/s.80HHC on the export profit calculated with reference to the export turnover and total turnover of one unit alone - assessee has two units - Held that:- The appellant being engaged in the business of tea, is not involved in the business of any other goods. The tea produced by the assessee is subjected to export as also local sale. The "goods" which would assume significance by the words employed in Section 80HHC is "tea" alone. In arriving at the allowable deduction under Section 80HHC, the export turnover to be taken is of tea. The total turnover is also of tea; since the goods, subject to export, is exclusively tea. The distinction or division now attempted by the assessee with respect to the estates in Assam and South India is artificial and not permissible under the provision - there cannot be any option for the lower denominator being the total turnover of the one unit alone as the proportion of business profits to be computed for arriving at the allowable deduction has to be made on the proportion of export turnover over of tea to the total turnover of tea. There can be no distinction between tea produced in two different units - what is applicable would be sub-section (3)(b) and that too the total turnover will be entire business turnover - against assessee. Computation of relief u/s 32AB - Tribunal's finding that interest income cannot be treated as "profit" for the purpose of computation of relief - Held that:- As decided in Parry Agro Industries Limited Versus CIT [2006 (7) TMI 128 - KERALA HIGH COURT] the assessee was not entitled to include interest income as profits of eligible business or profession for computing the deduction under Section 32AB - against assessee. Computation of depreciation while computing deduction under Section 32AB - assessee contested to take period of 32 months - Held that:- Under Section 32AB eligible profits are arrived at after deducting depreciation computed in accordance with the provisions of Section 32(1) - The amount that had been computed u/s 32(1) for the relevant assessment year with respect to the previous year comprising of 21 months is the depreciation for a period of 21 months. In such circumstance, the depreciation for the purpose of Section 32AB cannot be limited to 12 months. The assessee's contention is that depreciation allowable under Section 32(1) is to be to the depreciation determined for 21 months. However, in computation of Section 32AB, the same shall be limited to 12 months. The contention is only to be rejected - against assessee. Disallowance to expenditure incurred to accommodate touring employees - Held that:- Considering the facts of case in the years 1989-90 and 1990-91 where the claim was allowed it can be concluded in the period in question the facts would clearly show that in the said year the assessee had maintained two guest houses, named as "Rochdale House" and "Mounmion House". It was in such circumstance that expenditure was disallowed as it has been covered under Section 37(3) - against assessee.
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