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TMI Blog1993 (3) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-company developed software for booking of air tickets and the like. 3. Issue No. 1 : Deduction under section 80HHC Since the assessee had exported computer software it was entitled to deduction under section 80HHC of the Income-tax Act, 1961. It was also entitled to deduction under section 80-O of the Act in respect of the fees which had been received from foreign enterprises. There was no dispute as to the deduction admissible to the assessee under section 80-O. Dispute, however, arose on matters relating to deduction under section 80HHC. It is common ground that the profits and gains of the assessee's business was Rs. 25,81,604. It is also common ground that 4 per cent of the net foreign exchange realisation worked out to Rs. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 80HHC is liable to be given only for export of goods or merchandise. Consultancy is not merchandise or goods and in any event it has not been argued to be so. The Assessing Officer's action in excluding the profit from consultancy services is found to be in order and in accordance with the scheme of the Act. The decisions cited on behalf of the assessee are not applicable to the facts of the case. In the result the appeal on this point is dismissed. " 5. It is in these circumstances that the assessee is now before us. Shri Balasubramaniam, the learned counsel for the assessee contended that the lower authorities were not justified in restricting the deduction admissible to the assessee under section 80HHC of the Act to Rs. 32,09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of income under the head "Income from profits and gains of business or profession". In view of the foregoing, Shri Balasubramaniam contended that the assessee is entitled to succeed. 6. On his part, Shri Argal, the learned Departmental Representative, supported the impugned orders of the lower authorities. 7. We have looked into the facts of the case. We have heard the rival submissions. As we see it, the points urged by Shri Balasubramaniam on behalf of the assessee are well taken. 8. The scheme of the Act in matters relating to the computation of the total income of the assessee is, in substance, as follows : (i) All the incomes of the assessee must first be identified. (ii) Secondly, incomes which by virtue of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under the six heads listed in section 14 comes first. By the same token, it is separate and distinct from the exercise of ascertaining both the gross total income (within the meaning of section 80B(5) of the Act) and the total income of the assessee. " It will at once be clear from the foregoing that the lower authorities misdirected themselves in law when they held that for purposes of computing the deduction admissible to the assessee under section 80HHC of the Act, the fees received by the assessee from foreign enterprises which is the subject-matter of deduction under section 80-O of the Act must be deducted from the assessee's income under the head 'Profits and gains of business'. We, therefore, set aside the orders of the authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. What is required to be seen is whether the assessee satisfies the pre-conditions prescribed under various sections of Chapter VI-A. If the assessee satisfies those conditions, then the benefit cannot be denied. Secondly, Chapter VI-A, or for that matter the Income-tax Act, does not contain any provision stipulating that the assessee cannot get deductions in respect of the same receipt under more than one section of Chapter VI-A. The only limitation that has been incorporated in Chapter VI-A is section 80A(2) which says that the aggregate amount of deductions under Chapter VI-A shall not, in any case, exceed the gross total income of the assessee [as defined in section 80B(5)]. 12. We, therefore, allow the assessee's claim and direct the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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