TMI Blog2007 (9) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. JUDGMENT The judgment of the court was delivered by AJAY KUMAR MITTAL J.— In this reference at the instance of the Revenue, the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short "the Tribunal"), vide its order dated November 16, 1994, passed in R. A. No. 52/Chandi/1994 arising out of I. T. A. No. 201/Chandi/1992 has referred the following question of law under section 256(1) of the Income-tax Act, 1961 (for short "the Act"), for the assessment year 1988-89: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the case of the assessee was covered under section 80HHC(3)(a) and not under section 80HHC(3) (b) of the Income-tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness actively does not consist exclusively of exports outside India of the goods or merchandise would be entitled to have deduction as per section 80HHC(3)(b) on a pro rata basis or under section 80HHC(3)(a) of the Act. 4. It is apposite to refer to section 80HHC of the Act as stood at the relevant time which reads thus: "80HHC.(1) Where an assessee, being an Indian company or a person (other than a company) resident in India, 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 allowed, in computing the total income of the assessee, a deduction equal to the aggregate of- (a) four per cent. of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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." 5. A plain reading of clause (a) of sub-section (3) of section 80HHC of the Act shows that for the purposes of sub-section (1), profits derived from the export of the eligible goods or merchandise out of India in a case where business carried on by the eligible assessee consists exclusively of the export out of India of the goods or merchandise shall be the profits of the business as co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal sale of the very same goods, clause (b) of sub-section (3) will apply." 7. As noticed from the statement of the facts, the business carried on by the assessee did not consist exclusively of exports outside India of the goods or merchandise and had a mixture of export as well as domestic activities and, therefore, the assessee would be entitled to deduction under clause (b) of sub-section (3) of section 80HHC of the Act. 8. In order to be fair to learned counsel for the assessee, we refer to the judgment of the Madras High Court in CIT v. Rathore Brothers [2002] 254 ITR 656 on which the assessee had placed reliance. In the said case the assessee was not carrying on exclusively export business and was maintaining separate hook ..... X X X X Extracts X X X X X X X X Extracts X X X X
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