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TMI Blog2007 (9) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 80HHE of the Act. The restriction sought to be carved out by the sub-section is that the profits which have been subjected to deduction under s. 80HHE should not again be subjected to any other deduction which the assessee may otherwise be entitled to claim, either for the same assessment year or in any other assessment year. The explicit language of sub-s. (5) of s. 80HHE cannot be read so as to mean that the assessee having once claimed deduction u/s 80HHE in respect to profits of an eligible business, would be debarred for all times to claim deduction under any other provisions of the Act in respect of the profits of such business for any other assessment year. It is in this connection, we find that in the case of Legato Systems [ 2004 (11) TMI 294 - ITAT DELHI-E] . The Tribunal while considering the import of sub-s. (5) of s. 80HHE,observed that it was intended to avoid double deduction inasmuch as the profits calculated in accordance with sub-s. (1) of s. 80HHC for a particular assessment year cannot be claimed as a deduction either for the same or any other assessment year. Similar has been the reasoning adopted in the case of Jindal Exports (P) Ltd.[ 1989 (8) TMI 108 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under s. 10A of the Act amounting to Rs. 1,47,48,225. In the assessment completed under s. 143(3) of the Act on 31st March, 2005, the AO denied the claim of exemption under s. 10A of the Act. The claim of the assessee for exemption under s. 10A related to the profits derived in its industrial undertaking at NEPZ. This unit of the assessee was set up and started commercial operations in the previous year relevant to asst. yr. 1997-98. In the initial year i.e. asst. yr. 1997-98, the assessee suffered losses in the said unit and thus no exemption was claimed in that year. In the asst. yr. 1998-99, the assessee claimed deduction under s. 80HHE of the Act in relation to the profits of the said unit. From the asst. yr. 1999-2000 onwards, the assessee claimed exemption under s. 10A of the Act in respect of profits derived from the said unit and the same was allowed till asst. yr. 2001-02. In the assessment year under consideration i.e. asst. yr. 2002-03, the assessee has been denied the exemption under s. 10A of the Act. The exemption has been denied on the ground that since the assessee had claimed and was allowed deduction under s. 80HHE in the asst. yr. 1998-99, thus the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is submitted that the provisions of s. 80HHE(5) merely provide that no deduction under any other provisions of the Act shall be available to such profits on which the deduction has been claimed under s. 80HHE of the Act. According to the learned counsel, the emphasis in s. 80HHE(5) was ill relation to the profits which are the subject-matter of deduction. The said sub-section merely provided for not allowing of double deduction on the same profits. 5. On careful consideration of the rival submissions and the relevant provisions of the Act, we proceed to dispose of the issue on the following lines. The facts relevant to the impugned dispute have already been noted by us in the earlier paras and are not repeated for the sake of brevity. So, however, it would be pertinent to note that in the initial assessment year of 1997-98, the assessee suffered a loss in its NEPZ unit and, therefore, did not claim exemption under s. 10A of the Act. In the second year i.e., asst. yr 1998-99, it claimed deduction under s. 80HHE in relation to the profits from NEPZ unit. Thereafter, from asst.yr 1999-2000 onwards, it claimed exemption under s. 10A on profits from the NEPZ unit. In the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such business. In our humble opinion, this interpretation does not emerge from a plain reading of s. 80HHE(5) of the Act. Sub-s. (5) of s. 80HHE merely provides that where a deduction under s. 80HHE has been claimed and allowed in respect of profits of an eligible business, no deduction in relation to such profits be allowed under any other provision of the Act either for the same or any other assessment year. The interpretation placed by the Revenue, in our view, ignores the presence of the words "such profits" in the sub-s. (5) of s. 80HHE of the Act. The restriction sought to be carved out by the sub-section is that the profits which have been subjected to deduction under s. 80HHE should not again be subjected to any other deduction which the assessee may otherwise be entitled to claim, either for the same assessment year or in any other assessment year. The explicit language of sub-s. (5) of s. 80HHE cannot be read so as to mean that the assessee having once claimed deduction under s. 80HHE in respect to profits of an eligible business, would be debarred for all times to claim deduction under any other provisions of the Act in respect of the profits of such business for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the course of hearing before us, no material or evidence has been brought on record to negate the factual findings of the CIT(A) on this ground. In fact, the findings of the CIT(A) are in line with the material which has been placed in the paper book filed before us by the assessee in this regard. As a consequence, we hereby affirm the decision of the CIT(A) on this issue. Accordingly, the Revenue fails on this ground. 10. The last ground in this appeal relates to the action of the CIT(A) in setting aside the action of the AO in denying exemption under s. 10A with respect to a sum of Rs. 18,51,545 representing the profits earned by the assessee from its Japan branch. We find that the AO in the assessment order has denied the claim of the assessee on the ground that the provisions of s. 10A do not cover the profits of a foreign branch of the assessee, The CIT(A) however has allowed the claim of the assessee on the basis of the Expln. 3 to s. 10A of the Act. In para 6.3 of her order, the CIT(A) makes the following discussion: "6.3 There is no doubt as per Expln. 3 to s. 10A as noted above the profits and gains derived from onsite development of computer software including se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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