TMI Blog2014 (9) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) - If there is a loss the assessee would not be entitled to deduction - section 80AB has been given an overriding effect over all other sections, in Chapter VI-A. Section 80HHC does not provide that its provisions are to prevail over section 80AB or over any other provision of the Act - both the deductions under Section 80HHC and 80IA can be granted from the total income - the assessee herself has shown the computation, which was allowed by the AO - the assessee has claimed deduction u/s 80IA in the return of the income on the basis of the balance profit remaining after deduction of benefit u/s 80HHC of the Act – there is no reason to interfere with the order – Decided against Assessee. - Income Tax Appeal No. - 15 of 2005 - - - Dated:- 2-9-2014 - Hon'ble Tarun Agarwala And Hon'ble Dr. Satish Chandra,JJ. For the Appellant : Vipin Sinha, Krishna Dev Vyas, Navin Sinha, S. D. Singh For the Respondent : A. N. Mahajan, S.C.,Dhananjai Awasthi ORDER (Per Hon'ble Dr. Satish Chandra, J) The present appeal is filed by the assessee against the order dated 29.07.2004 passed by the Income Tax Appellate Tribunal, Agra in ITA No. 195/Agra/2000 for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ored the order passed by the A.O. Being aggrieved, the assessee has filed the present appeal. With this background, heard Shri S.D. Singh, the learned Senior Counsel assisted by Shri Krishna Dev Vyas, the learned counsel for the assessee, who has justified the order passed by the First Appellate Authority. He read out the then Section 80A of the Act which on reproduction reads as under :- 80A (1) In computing the total income of an assessee, there shall be allowed from his gross total income, in accordance with and subject to the provisions of this Chapter, the deductions specified in sections 80C to [80U]. (2) The aggregate amount of the deductions under this Chapter shall not, in any case exceed the gross total income of the assessee. (3) Where, in computing the total income of an association of persons or a body of individuals, any deduction is admissible under Section 80G or Section 80GGA or Section 80HH or Section 80HHA or Sections 80HHB or Section 80HHC or Section 80HHC or Section 80-I or Section 80-IA or Section 80J* or Section 80JJ, no deduction under the same section shall be made in computing the total income of a member of the association of persons or body ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80-I can be taken on the reduced balance after taking into account the benefit taken under Section 80HH. (d) Great Eastern Exports Vs. Commissioner of Income Tax [2011] 332 ITR 14 (Delhi) In this case it was observed that by sub-section (13) of section 80-IB of the Income-tax Act, 1961, the provisions of sub-section (9) to section 80-IA are made applicable to section 80-IA. By a plain language of sub-section (9) of section 80-IA, applying the test of literal construction, it is clear that: (a) once an assessee is allowed deduction under Section 80-IA, to the extent of such profits and gains he is not to be allowed further deductions under Part C; and (b) in no case the deduction shall exceed the profits and gains of such eligible business of the undertaking or enterprise, as the case may be. The expression deduction to the extent of such profits clearly signifies that if an assessee is claiming the benefit of deduction of particular amount of profits and gains under section 80-IA to that extent profits and gains are to be reduced while calculating the deduction under heading C of Chapter VI-A of the Act. Further the word and is disjunctive which would mean that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the section. It the wording of the section is clear, then benefits which are not available cannot be conferred by ignoring or misinterpreting the words in the section. A plain reading of Section 80HHC makes it clear that in arriving at profits earned from export of both self manufactured goods and trading goods, the profits and losses in both trades have to be taken into consideration. If after such adjustments there is a positive profit the assessee would be entitled to deduction under Section 80HHC(1). If there is a loss the assessee would not be entitled to deduction. The word profit in sub-section (1) and (3)(a) and (b) of section 80HHC means a positive profit. In other words, if there is a loss then no deduction would be available under sub-section (1) or sub section (3)(a) or sub-section (3)(b). In arriving at the figure of positive profit, both the profits and the losses will have to be considered. It the net figure is a positive profit then the assessee will be entitled to deduction; if the net figure is a loss then the assessee will not be entitled to deduction. A plain reading of sub section (3)(c) shows that profits from such exports has to be profits of exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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