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2007 (4) TMI 297 - AT - Income TaxDeduction claimed u/s 80M - Eligible for deduction "Gross dividend or Net Dividend" income - HELD THAT:- From the record, we found that direct expenditure with respect to such investment works out to be Rs. 12,35,200. It is also a matter of record that assessee was in receipt of dividend once in a year in the form of 8 to 10 dividend vouchers, which were to be deposited in the bank account. Therefore, it cannot be said that any major administrative expenses was attributable to such deposit of dividend warrants in bank. Recently, in case of Punjab State Industrial Development Corporation Ltd. vs. Dy. CIT [2006 (4) TMI 187 - ITAT CHANDIGARH] has held that actual expenditure incurred has to be considered while allowing deduction u/s 80M and there is no question of taking expenditure on estimation or presumption basis. Thus, we direct the AO to allow deduction u/s 80M after reducing a sum of Rs. 12,35,200 from the amount of gross dividend. We direct accordingly. Computation of deduction u/s 80HHC - All indirect cost is to be apportioned between the export turnover and total turnover - Interest cost is indirect cost for deduction u/s 80HHC - HELD THAT:- From the record, we found that during the year, expenditure on account of interest payment amounting to Rs. 43.52 crores, was incurred. None of the interest was paid in connection with exports and was not, therefore, related to exports. Therefore, no part of interest paid was required to be considered for computing indirect cost while computing deduction u/s 80HHC of the Act. Thus, being agreeing the submission of ld AR, we do not find any merit in the order of lower authorities for apportioning the interest expenditure which are not attributable to the export of trading goods, while working out indirect cost liable to be reduced from the amount of export turnover of trading goods, for working out deduction eligible u/s 80HHC(3)(b) of the Act. Deduction u/s 80HHC - apportioning export incentive between export house and supporting manufacturer - HELD THAT:- Whenever, an export house surrenders part of its export turnover, in favour of the supporting manufacturer, it is required to issue a certificate as referred to in cl. (b) of sub-s. (4A), in respect of the amount of turnover specified therein, then the amount of deduction in the case of the assessee being export house shall be reduced by such amount which bears to the total profit derived by the assessee from export of trading goods, the same proportion as the amount of export turnover specified in the said certificate bears to the total export turnover of the assessee in respect of such trading goods. Thus, in respect of the income which the assessee did not disclaim in favour of the supporting manufacturer which pertains to and is attributable to the export incentive, there is no reason to reduce the export incentive relatable to the disclaimed turnover in terms of proviso to s. 80HHC(1) of the Act. We, therefore, direct the AO not to apportion the export incentive in the ratio of export turnover disclaimed to the total export turnover of trading goods under proviso to s. 80HHC(1) of the Act. This ground is, therefore, allowed in favour of assessee. In the result, the appeal of the assessee is allowed in terms indicated hereinabove.
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