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2014 (3) TMI 468 - HC - Income TaxComputation of deduction 80HHC of the Act - Exclusion of Excise duty and sales tax from turnover - Whether the Tribunal is right in directing the AO to exclude excise duty and sales tax from the total turnover computing deduction u/s 80HHC of the Act – Held that:- The decision in CIT v. Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME Court] followed - There was no merit in the contentions of the revenue - tax under the Act is upon income, profits and gains - It is not a tax on gross receipts - Under Section 2(24) of the Act the word "income" includes profits and gains. The words "total turnover" in the cannot be interpreted with reference to the definition of the word "turnover" in other laws like Central Sales Tax or as defined in accounting principles. Goods for export do not incur excise duty liability - even commission and interest formed a part of the profit and loss account were not eligible for deduction under Section 80HHC - It is important to bear in mind that excise duty and sales tax are indirect taxes - They are recovered by the assessee on behalf of the Government - if they are made relatable to exports, the formula under Section 80HHC would become unworkable – thus, the excise duty is excise duty is to be excluded for the purpose of computation of deduction u/s. 80HHC – Decided against Revenue.
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