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2013 (7) TMI 415 - KARNATAKA HIGH COURTDeduction u/s 80HHC - Premium of transfer of the export license - CIT allowed partial deduction of 10% to assessee whereas Tribunal allowed full benefit - Held that:- In order to qualify for benefit under Section 80HHC, the profit earned should have a nexus to the export of the goods directly merchandised - In the case of premium payment received on transferring export quotas, it does not involve any earnings of foreign exchange and does not result in profits attributable to an export activity for the purpose of Section 80HHC and no deduction under Section 80HHC can be claimed - entitlement to a quota and a premium or price for the transfer of a quota may be incidental to the export activity carried on by the assessee earlier but has no direct nexus in the sense that no export is found in the hands of the assessee in respect of subject amount - Order of the appellate tribunal is set-aside - Following decisions of ANIL DANG vs THE INCOME TAX OFFICER [2010 (12) TMI 944 - Karnataka High Court] and COMMISSIONER OF INCOME TAX vs NAGESH KNITWEARS P.LTD. [2012 (6) TMI 65 - DELHI HIGH COURT] - Decided in favour of Revenue.
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