TMI Blog2005 (10) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... ,584. In the original return, the deduction under s. 80HHC was claimed at Rs. 2.45,98.416 by proportionately reducing the deduction in respect of export incentive. Thereafter, the assessee revised the return by claiming the deduction under s. 80HHC at Rs. 2,60,23,142 on the entire export incentive. The calculation of deduction under s. 80HHC made in the original return and revised return are as under: Particulars Amount Profit of the business 2,60,23,143 Net profit as per computation under s. 28 Less: 90% of export incentive 25,49,584 (90% of 28,32,871) Profit of the business 2,34,73,559 Total turnover 10,18,90,229 Direct export turnover 4,49,53,208 Turnover through export house for 5,69,37,021 which disclaimer certificate received Claim under s. 80HHC in the original return In respect of direct export 2,34,73,559 x 4.49,53,208 -------------------------- 10,18,90,229 + 25,49,584 x 4.49,53,208 = 1,14,81,216 ----------------------- 10,18,90,229 In respect of export through export house: 2,34,73,559 x 5,69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the assessee," 7. Accordingly, 90 per cent of the export incentive will be allowed for the deduction under s, 80HHC in proportion of export turnover and total turnover. Thus, the assessee's claim at 100 per cent deduction for export incentive without following the formulas laid down in provisions of sub-s. (3) is prima facie incorrect and not allowable, Moreover, the export through supporting manufacturer is also not includible in the export turnover for the purpose of working of deduction for ex-port incentive. Thus, the assessee's revised claim under s. 80HHC was rejected and claim made in original return of income of Rs. 2,45,98,416 was allowed by AO. 8. The learned CIT(A) found that intention of the legislature was to allow deduction in respect of income from export and export incentives form part of export income, Under the scheme of s. 80HHC, benefit of deduction of export sale by export house can be claimed either by supporting manufacturer or by export house. It cannot be claimed by both of them, The learned CIT(A) relied upon the decision of Tribunal Delhi Bench in the case of Easter Leather Products (P) Ltd, vs, Dy. CIT (1999) 65 TTJ (Del) 603 : (1999) 68 ITD 35 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch bears to the adjusted profits of the business, the same proportion as the adjusted export turnover in respect of such goods bears to the adjusted total turnover of the business carried on by the assessee; and (ii) in respect of trading goods, be the export turnover in respect of such trading goods as reduced by the direct and indirect costs attributable to export of such trading goods: Provided that the profits computed under cl. (a) or cl. (b) or cl. (c) of this subsection shall be further increased by the amount which bears to ninety per cent of any sum referred to in cl. (iiia) (not being profits on sale of a licence acquired from any other person) and cls. (iiib) and (iiic) of s. 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee. (3A) For the purposes of sub-s. (1A), profits derived by a supporting manufacturer from the sale of goods or merchandise shall be,- (a) in a case where the business carried on by the supporting manufacturer consists exclusively of sale of goods or merchandise to one or more export houses or trading houses, the profits of the business (b) in a case where the business carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere shall, in accordance with the subject to the provisions of this section, be allowed in computing the total income of the assessee, a deduction of the profits derived by the assessee from the sale of goods or merchandise to the export house or trading house in respect of which the certificate has been issued by the export house or trading house. (2)(a)- This section applies to all goods or merchandise, other than those specified in cl. (b), if the sale proceeds of such goods or merchandise exported out of India are received in, or brought into, India by the assessee (other than the supporting manufacturer) in convertible foreign exchange within a period of six months from the end of the previous year or where the Chief CIT of CIT is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Chief CIT of CIT may allow in this behalf. 12. Expln. 1 -The sale proceeds referred to in cl. (a) shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained for the purpose by the assessee with any b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme, benefit of s. 80HHC is legitimately admissible to assessee in a way similar to benefits available to direct exporter. 15. When the plain language of the statute can be read in its ordinary, natural and grammatical sense, then a literal construction of the statute should be made. As has been held in the case of Innamuri Gopalam Maddala Nagendrudu vs. State of A.P. (1963) 14 STC 742 (SC) : (1964) 2 SCR 888: "In construing a statutory provision the first and foremost rule of construction is the literary construction. All that the Court has to see at the very outset is what does the provision say. If the provision is unambiguous and if from the provision the legislative intent is clear, the Court need not call into aid the other rules of construction of statutes. The other rules of construction are called into aid only when the legislative intent is not clear." 16. Therefore, in the present case the provisions in the statute are very clear and the language of the statute cannot be strained. In taxing statute, one has to look what is clearly said. In view of above discussions the claim of the assessee in the revised return without following the computation as provided under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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