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2012 (10) TMI 61 - HC - Income TaxDeduction u/s 80IA as well as u/s 80HHC - whether an assessee is entitled to full deduction or has to be proportionately reduced - Held that:- While calculating the deduction the provisions of the deducting sections have to be followed. There is nothing in Section 801A(9) which lays down that the assessee would not be entitled to claim deduction under Section 80HHC on that portion of the profits of the unit of which benefit has been taken under Sections 801A or 801B. The object of Section 801A(9) is not to curtail the deduction but to avoid double benefits - The total benefits cannot be higher than the gross income and cannot exceed the profits of the priority undertaking. The assessee would be entitled to the benefit of Sections 801A or 801B separately and to that of Section 80 HHC independently and while computing the deduction under Section 80 HHC the profits or deductions which have been granted under Sections 801A or 801B cannot be taken into consideration. Thus in agreement with the Bombay and Karnataka High Courts that in case the contention of the revenue that the profits and gains, permitted to be deducted under Section 80IA or 80IB, should be deducted out of the profits of the business and thereafter the profits and gains of the export business are to be reckoned for the purpose of calculating the benefit under Section 80HHC is contrary to the statutory provisions and the letter and spirit of the Act. The deductions are independent of each other and therefore, full deduction under each Section can be claimed though the overall benefit has to be restricted to the total profits and gains of such eligible business - in favour of assessee.
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