TMI Blog2003 (3) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... rred by the Tribunal, in the affirmative, that is, in favour of the assessee and against the Revenue - - - - - Dated:- 12-3-2003 - Judge(s) : G. SIVARAJAN., J. M. JAMES. JUDGMENT The judgment of the court was delivered by G. SIVARAJAN J.-The Income-tax Appellate Tribunal, Cochin Bench, has referred the following questions of law to this court under section 256(1) of the Income-tax Act, 1961,for decision at the instance of the Revenue; "(1) Whether, on the facts and in the circumstances of the case, and on an interpretation of the relevant provisions, the Tribunal is right in law in holding on principle that the assessee is entitled to deduction under section 80HHC of the Income-tax Act? (2) Whether, on the facts and in the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , held that there was actually loss from Kerala tea which was exported abroad and only a small profit from Tamil Nadu tea, the net result was loss and therefore in terms of section 80AB, the assessee was not entitled to any deduction under section 80HHC of the Act. This was confirmed in appeal by the Commissioner of Income-tax (Appeals). In second appeal by the assessee, the Tribunal allowed the claim of the assessee by holding that section 80AB has no application to a case covered by section 80HHC of the Act. We have heard Sri P. K. R. Menon, learned senior Central Government standing counsel appearing for the Revenue, and Sri Anil D. Nair, learned counsel appearing for the respondent-assessee. The contention of senior counsel for the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in CIT v. A. V. Thomas and Co. Ltd. [1997] 225 ITR 29, the decision of the Bombay High Court in CIT v. Shirke Construction Equipments Ltd. [2000] 246 ITR 429 and also the decision of the Gujarat High Court in CIT v. Arvind Mills Ltd. [2002] 254 ITR 529. The short question that arises for consideration in this case is as to whether the assessee can be denied the benefit of deduction available under section 80HHC, in a case where the assessee had no profit from the export business. In order to decide this question, it is necessary to see the provisions of section 80HHC of the Act, as is stood at the relevant time. Section 80HHC(I) reads as follows: "80HHC Deduction in respect of profits retained for export business. - (1) Where an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r profession'; (b) in a case where the business carried on by the assessee does not consist exclusively of the export out of India of the goods or merchandise to which this section applies, the amount which bears to the profits of the business (as computed under the head 'Profits and gains of business or profession') the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee." Sub-section (1) of section 80HHC provides that the assessee being an Indian company or a person resident in India, who is engaged in the business of export out of India of any goods or merchandise to which this section applies, there shall in accordance with and subject to the provisions of this section, be al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as could be seen from the relevant portion of the assessment order, which is extracted in the Tribunal's order in paragraph 9, the business income of the assessee was computed after deducting the loss of Rs. 24,31,425. The Assessing Officer has not granted the relief under section 80HHC only on the ground that the assessee did not in fact have any profit from the export business. Whether that can be a ground for denying the benefit is the only question. Going by the provisions of section 80HHC(1) read with sub-section (3), we do not find any scope for denying the benefit of this section on the ground that there was no profit from the export business. This is for the reason that the profits of the export business for the purpose of section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shirke Construction Equipments Ltd. [2000] 246 ITR 429 and also the decision of the Gujarat High Court in CIT v. Arvind Mills Ltd. [2002] 254 ITR 529, support the view which have already taken. We have held in our judgment rendered today in I.T.R. No.96 of 1999 (CIT v. Smt. T.C. Usha [2004] 266 ITR 497 (Ker)) that section 80HHC is a self-contained code in itself and section 80AB is subject to the said section. Since we have already dealt with the decisions relied by senior counsel for the Revenue in our judgment in I.T.R. No.96 of 1999 (CIT v. Smt. T. C. Usha [2004] 266 ITR 497 (Ker)), we are not repeating the same in this judgment. In the above circumstances, we answer the two questions referred by the Tribunal, in the affirmative, that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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