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2014 (7) TMI 216 - HC - Income TaxComputation of export incentive u/s 80HHC of the Act - Receipt of job charges treated as part of the "total turnover” – Held that:- Exports profits were required to be computed in the ratio of export turnover to total turnover - there is no difference in the activity relating to export business and job work carried out by the assessee - There is no difference between manufacture and export of jewellery on one hand and manufacture of jewellery for others on job work basis - the receipt by way of job work is an integral part of the dominant business activity - The only difference between regular manufacturing and processing for others is that the assessee did not own the goods processed by it in the case of job work - The expenses and efforts for the job charges were the same in relation to the regular manufacture on assessee's own account - the assessee has not maintained a separate account for manufacturing and sale of jewellery on one hand and job works undertaken by it - the word 'charges' should be read along with the meaning of those specific words forming themselves into a special category - If so, the word 'charges' should be confined to those charges which do not have anything to do with the business and the related activities carried on by the assessee. The charges credited by the assessee in its turnover were the proceeds of the manufacturing and job work charges carried on by the assessee which is part of its principal business - the charges received by the assessee-company for the job works undertaken as in the nature understood could not be held as similar to the word 'charges' provided in sub-clause (1) of clause (baa) of the Explanation given under Section 80 HHC - the word 'charges' appearing in clause (baa) of Explanation given under Section 80HHC needs to be read as charges similar to receipts in the nature of brokerage, commission, interest, rent. etc. - Relying upon CIT Vs. K. Ravindranathan Nair [2007 (11) TMI 10 - Supreme Court of India] - job work charges is the integral part of the business activity of the assessee and charges received by the assessee for the job work undertaken by him cannot be held similar to the word "charges" provided in Explanation (baa) - The job work charges has to be included in the total turnover – There was nothing on record to suggest that the AO did not follow the formula as per the provision of Section 80 HHC while computing the deduction - Decided against Revenue.
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