TMI Blog2011 (10) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... profits in respect of non-100% export oriented unit shall be considered for computation of deduction u/s 80-HHC - Decided in favor of assessee - IT Appeal No. 4164 (Delhi) of 2009 - - - Dated:- 31-10-2011 - R.P. Tolani, K.D. Ranjan, JJ. K. Sampath for the Appellant. Rohit Garg for the Respondent. ORDER K.D. Ranjan, Accountant Member This appeal by the assessee for assessment year 2003-04 arises out of order of the ld. CIT (Appeals)-VI, New Delhi. 2. The grounds of appeal raised by the assessee reads as follows :- "1. That the order of the ld. Commissioner of Income-tax (Appeals) is bad both on law and facts; 2. That the action of the ld. Commissioner of Income-tax, in initiating proceeding under section 263 is bad both on law and facts; 3. That the ld. Commissioner of Income-tax (Appeals) has erred in sustaining the addition of a sum of Rs. 32,87,203/- by wrongly re-computing the deduction under section 80-HHC." 3. The first issue for consideration relates to initiation of proceedings under section 263 of the Act. In this case original assessment was made under section 143(3) on 30/01/2006. The ld. CIT, Delhi-I set aside the order on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 80-HHC was claimed at Rs. 24,26,60,362/-. The turnover of hundred per cent export-oriented unit was at Rs. 28,29,23,915/-. Thus the total turnover of hundred per cent export-oriented unit and non hundred per cent export-oriented unit was Rs. 52,55,84,277/-. The assessing officer computed deduction under section 80-HHC of the Act by taking the total turnover of the business at Rs. 52,55,84,277/-. 5. Before the ld. CIT (Appeals) it was submitted by the assessee that the assessee was entitled for deduction under section 10-B on account of export of goods carried out by it from hundred per cent export-oriented unit whereas separate deduction was available to the assessee under section 80-HHC of the Act based on the formula in section 80-HHC(3) of the Act. While calculating deduction under section 80-HHC, the assessee had rightly taken total business turnover as turnover pertaining to export from non-EOU because the treatment of turnover and resulting profit from hundred per cent EOU were prescribed separately. It was further submitted that provisions of section 80-HHC(4)(b) clearly stipulated that any exempt income under any provisions of Income-tax Act was not required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 211 (Chd.). 7. On the other hand, the ld. Sr. DR supported the order of the ld. CIT (Appeals). He relied on the decision of ITAT, Mumbai in the case of Tata BP Solar India v. Addl. CIT [2011] 130 ITD 386/9 taxmann.com 8 (Mum.). 8. We have heard both the parties and gone through the material available on record. Under section 80-HHC(3)(a) the profits derived from exports shall be the amount which bears to the profits of the business, the same proportion as the export turnover in respect of such goods bears to the total turnover of the business carried on by the assessee. As per the contention of the Revenue the expression 'total turnover' would include the turnover of entire business carried on by the assessee i.e. the turnover of hundred per cent export oriented unit and the non-hundred per cent export unit. On the other hand, the contention of the assessee is that the turnover of hundred per cent export unit cannot be included in the total turnover of the business for the purpose of deduction under section 80-HHC of the Act. 9.1 From the facts stated above, it is apparent that the assessee during the relevant previous year had two export units. One was eligible fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under those provisions for any assessment year, deduction in respect of, and to the extent of, such profits and gains shall not be allowed under any other provision of this Act or such assessment year and shall in no case exceeds the profits and gains of such undertaking or unit or enterprise or eligible business, as the case may be. Sub section (4) of section 80-A contains non-obstante clause in relation to section 10-A or section 10-AA or section 10-B or section 10-B(a) or any provisions of Chapter VI-A under the heading "C - Deductions in respect of certain incomes". Therefore, the deduction once claimed and allowed under section 10-B shall not be taken into consideration for computation of deduction under Chapter VI-A of the Act. Therefore, the profits of hundred per cent export unit will not be eligible for deduction under section 80-HHC of the Act. 9.3 Under section 80-HHC(1) the assessee is eligible for deduction of profits derived from export of eligible goods or merchandise. Under section 80-HHC(3)(a) for the purpose of deduction under section 80-HHC(1) in case of an assessee where the export out of India is of goods or merchandise manufactured or processed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which provisions of section 80-HHC(1) are applicable. If the turnover of hundred per cent export oriented unit is included in the total turnover the profits derived from the export unit which is not a hundred per cent export oriented unit will always be a lower amount and thus the profits derived will be distorted one and will not be giving the correct export profits. When section 80-A(4) of the Act does not permit further deduction under Chapter VI-A in respect of deductions of profits claimed under section 10-B and allowed, considering the figures of turnover in relation to hundred per cent export unit in computation of total turnover will not be as per provisions of section 80-HHC of the Act. It is not the case of the assessing officer that combined books of accounts have been maintained by the assessee, both in respect of hundred per cent export oriented unit and unit eligible for deduction under section 80-HHC of the Act. Therefore, in our considered opinion, the turnover of hundred per cent export oriented unit cannot be included in the total turnover for the purpose of computation of deduction under section 80-HHC of the Act. Only the turnover which is in the nature of opera ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
