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2007 (2) TMI 237 - AT - Income TaxDeduction u/s 80HHE - profits of the business - separate books of account are maintained for different units - CIT(A) confirmed the order of the Assessing Officer in considering total turnover of entire business instead of turnover of only the unit located at SEPZ for the purpose of deduction u/s 80HHE - HELD THAT:- It is the case of the assessee that assessee-company is exporting the computer software manufactured in SEPZ unit. The entire activity of the assessee in this Zone is independent from assessee's other business. There is no overlapping and mingling of the services or any link between the manufacturing activities of both. Both are exclusive of each other. As rightly contended by the learned counsel, section 80HHC speaks of deduction in respect of profits derived by the assessee from export of such goods or merchandise; whereas section 80HHE speaks of such business. 'Such business' only could mean the business of export of computer software. The scope of consideration has been narrowed down. In other words, whether the assessee derives income from any other business or not, is not a criteria and it is wholly extraneous while granting deduction u/s 80HHE, which is exclusively for computing deduction in respect of profit from export of computer software etc. Thus, we allow the claim of the assessee on this ground. Interest payable u/s 234B - intimation u/s 143(1)(a) - HELD THAT:- It is not disputed that the assessee received a huge refund as a result of processing of the return under section 143(1)(a). Subsequently, the tax component was enhanced as a result of the reassessment done under section 143(3) read with section 147. As such, the decision of the Hon'ble Delhi High Court in the case of K.K. Marketing is applicable on facts. there is no default on the part of the assessee in paying the advance tax. For the first time the dispute arose consequent to the reassessment done under section 143(3) read with section 147. The stand of the revenue is that charging of interest under section 234B is mandatory. Mandatory does not mean that it is mandatory under all circumstances. It is mandatory when the conditions are fulfilled. The condition is that the assessee should have defaulted. If the assessee has not anticipated reopening or the assessee has not anticipated a superior court decision, which goes against the assessee, it is difficult to hold that such an assessee is a defaulter. If the assessee takes due diligence and care and make the payment and if it is accepted by the revenue, such an assessee cannot be held as a defaulter only because subsequently the assessee's income has been enhanced. Reading of section 234B(3) makes it clear that where, as a result of an order of reassessment or re-computation under section 147 or section 153A, the amount on which interest was payable under sub-section (1) is increased, the assessee shall be liable to pay simple interest at the rate of one per cent.... The reading of the section further makes it clear that first of all there should be a default on the part of the assessee in the regular assessment and the assessee should have been held liable to pay interest under section 234B. In that case, if there is reassessment or recomputation under section 147 or 153A, the liability of the assessee is increased and not otherwise. Thus, the claim of the assessee is liable to be allowed. Hence, the appeal of the assessee on this ground is allowed. In the result appeal of the assessee stands allowed in part.
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