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2018 (11) TMI 53 - HC - Income TaxComputation of deduction u/s 80HHC - Exchange fluctuation, provision written back, should be treated as income derived out of business for computation - Tribunal holding not 90% of Exchange Fluctuation, provision written back, should not be deducted from the business profits under explanation (baa) - Held that:- The assessee had explained to the AO that the difference in value was due to exchange fluctuation, which has been accounted separately in profit & loss account and the value adopted by it is based on actual realisation of foreign exchange. With regard to sale of scrap, the assessee contended that the scrap, which was sold forms an integral part of the revenue generated from the industrial undertaking, since the same is derived from operational activity of the undertaking. After examining the factual position, the CIT(A) accepted the case of the assessee and duly supported its finding by referring to the decisions on the point. Thus, in the facts and circumstances of the case, we are of the considered view that no substantial question of law arises for consideration in these appeals and the decision in the case of Alfa Laval India Ltd. [2003 (9) TMI 43 - BOMBAY HIGH COURT] would squarely apply to the facts and circumstances of this case. As relevant to take note of the decision of the High Court of Himachala Pradesh in Purewal & Associate Ltd., [2016 (1) TMI 809 - HIMACHAL PRADESH HIGH COURT] wherein the Court considered the object of Section 80HHC which was to grant an incentive to earners of foreign exchange and therefore, held that it has to be essentially considered with reference to that object. In paragraph 22 of the judgment, the Court noticed Section 41(1) and pointed out that it creates a legal fiction and can be extended for the purpose allowing from profits of business as referred to in Section 80HHC of the Act. We hold that there is no substantial questions of law arising for consideration in these appeals and the decision purely revolves around the factual matrix and it is not a case of decision on mixed questions of fact and law. Thus, we are not inclined to interfere with the order passed by the Tribunal confirming the order passed by the CIT(A). - Decided against revenue.
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