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2018 (2) TMI 305 - HC - Income TaxComputing the deduction u/s 80HHC - inclusion of loss incurred in the export business - business profits - Held that:- The computation of profits derived from export, for an assessee doing both export and domestic business, has to be made by resorting to the said formula as available under sub-section (3C) of Section 80HHC. The proportion, which the export turnover bears to the total turnover, has to be applied to the business profits to elicit the exact amount eligible for exemption under Section 80HHC, as profits derived from export. As rightly held by the first appellate authority, the business profits include those derived in the domestic market; that of high sea sales of imported goods, the turnover of which has to be included in the total turnover. This is the incentive permitted by the legislature, for earnings in foreign exchange, whether the export business generated profit or not. We, hence, answer the first question against the Revenue and hold that in computing the deduction under Section 80HHC, the loss incurred in the export business would be of no consequence, since the formula as applied above, would take in the total turnover, the export turnover and the total business profit. Reliance placed on Parry Agro Industries Ltd. [2002 (3) TMI 9 - KERALA High Court] by the Tribunal, is perfectly in order and we answer the said question also in favour of the assessee and against the Revenue.
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