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2014 (3) TMI 934 - HC - Income TaxComputation of deduction 80HHC of the Act – Exclusion of Excises duty - Whether the Tribunal is right in holding that excise duty is to be excluded for the purpose of computation of deduction u/s. 80HHC of the Act – Held that:- The decision in Commissioner of Income-Tax Versus Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME Court] followed - The 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 charge is not on gross receipts but on profits and gains - Where a deduction is necessary in order to ascertain the profits and gains, such deductions should be allowed - Profits should be computed after deducting the expenses incurred for business though such expenses may not be admissible expressly under the Act, unless such expenses are expressly disallowed by the Act. Sales tax and excise duty also do not have any element of "turnover" which is the position even in the case of rent, commission, interest etc. - 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 Tribunal has not committed any error in holding that 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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