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2018 (10) TMI 1510 - HC - Income TaxEntitlement to benefits u/s 80HHB - how the project executed by the assessee requires to be interpreted for being entitled or otherwise to the benefits under Section 80HHB - 'profits derived' from the business - Held that:- The expressions "business of execution of a foreign project" or work forming part of it or the 'profits derived' from the business, take in all aspects of a business involving the activities referred to in Sub-Section (2)(b) of Section 80HHB of the Act together with all activities, commitments and obligations ancillary and incidental thereto and the profits flowing therefrom. It was also held that the definition cannot be restricted to the mere physical activity or putting up the superstructure, machinery or plant, but should be understood to take within its fold all utilization of technical knowledge or rendering of technical services necessary to bring about the construction, assembly and installation. Bearing in mind the above legal principle, if we examine the nature of work done by the assessee in the foreign country, we fully subscribe to the factual finding recorded by the CIT (A) after going through the terms and conditions of the agreement and the drawings, etc. The Tribunal lost sight of the most important factor pointed out by the assessee before the CIT (A) that the term 'shut down' does not denote repairs and maintenance and that it is a technical term, which is peculiar to the industry in question. Therefore, if the Tribunal had to come to a different conclusion, it should have reappreciated the factual position and then rendered a finding, which it has failed to do so. Rather, the Tribunal sought to adopt a very narrow approach by referring to the dictionary meaning of the words 'assembly' and 'installation'. It has to be borne in mind that Section 80HHC of the Act is a provision, which grants incentive to the assessee for growth and development and as held by the Hon'ble Supreme Court in several decisions, such provision should be liberally construed, as it will promote economic growth of the country. The Statute has clearly circumscribed as to what is a foreign project and we agree with the factual findings recorded by the CIT (A) that the scope of work done by the assessee will fall within the meaning of the expression 'foreign project' as defined under Sub-Section (2)(b) of Section 80HHB of the Act. Accordingly substantial questions of law are answered in favour of the assessee.
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