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2015 (1) TMI 427 - GUJARAT HIGH COURTDeduction u/s 80HHC - Whether in the facts and circumstances of the case, the Appellate Tribunal was right in law in allowing claims for deduction u/s 80HHC of the Income Tax Act, 1961 holding that service charges, interest, delivery and distribution charges cannot be excluded while computing the profit of business for the purpose of deduction - Held that:- From a perusal of the orders of the CIT(A) as well as the Tribunal, it appears that while answering the issue raised in these appeals in favour of the assessee, both the authorities below placed reliance on a decision of the Kerala High Court in "BABY MARINE EXPORTS VS. ACIT" (Supra), wherein, the Kerala High Court laid down that the service charge is a part of the price for sale of the merchandise and that it is neither brokerage, commission, interest charges or collection or any amount of similar nature and on the basis of the same, CIT(A) and the Tribunal held that the 90 per cent of the export premium cannot be deducted while computing the deduction u/s.80HHC of the Act. - High Court of Kerala has now been confirmed by the Apex Court vide its decision in "CIT VS. BABY MARINE EXPORTS" (Supra), wherein, the Apex Court has held that according to Section 80HHC(1), the export house in computing its total income is entitled to deduction to the extent of the profit derived by the assessee from the export of the goods or merchandise, whereas, according to section 80HHC(1A), the assessee being supporting manufacturer shall be entitled to a deduction of profit derived by the assessee from the sale of goods or merchandise. Thus, we do not find that the the Tribunal committed any error in passing the impugned order. - Tribunal was right in law in allowing claim of the assessee for deduction u/s 80HHC of the Act, holding that service charges cannot be excluded while computing the profit of business for the purpose of deduction under the aforesaid section - Decided against Revenue.
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