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TMI Blog2005 (10) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... received export incentive of Rs. 25.49,584. In the original return, the deduction under s. 80HHC was claimed at Rs. 2.45,98.416 by proportionately reducing the deduction in respect of export incentive. Thereafter, the assessee revised the return by claiming the deduction under s. 80HHC at Rs. 2,60,23,142 on the entire export incentive. The calculation of deduction under s. 80HHC made in the original return and revised return are as under: Particulars Amount Profit of the business 2,60,23,143 Net profit as per computation under s. 28 Less: 90% of export incentive 25,49,584 (90% of 28,32,871) Profit of the business 2,34,73,559 Total turnover 10,18,90,229 Direct export turnover 4,49,53,208 Turnover through export house for 5,69,37,021 which disclaimer certificate received Claim under s. 80HHC in the original return In respect of direct export 2,34,73,559 x 4.49,53,208 -------------------------- 10,18,90,229 + 25,49,584 x 4.49,53,208 = 1,14,81,216 ----------------------- 10,18,90,229 In respect of export through export house: 2,34,73,559 x 5,69,37,021 = 1,31,17,200 ------------------------ 10,18,90,229 ------------ 2,45,98,416 ------------ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough supporting manufacturer is also not includible in the export turnover for the purpose of working of deduction for ex-port incentive. Thus, the assessee's revised claim under s. 80HHC was rejected and claim made in original return of income of Rs. 2,45,98,416 was allowed by AO. 8. The learned CIT(A) found that intention of the legislature was to allow deduction in respect of income from export and export incentives form part of export income, Under the scheme of s. 80HHC, benefit of deduction of export sale by export house can be claimed either by supporting manufacturer or by export house. It cannot be claimed by both of them, The learned CIT(A) relied upon the decision of Tribunal Delhi Bench in the case of Easter Leather Products (P) Ltd, vs, Dy. CIT (1999) 65 TTJ (Del) 603 : (1999) 68 ITD 358 (Del), where it has held that though s. 80HHC does not specifically provide benefit for export incentive to supporting manufacturer but considering the scheme, benefit of s. 80HHC is legitimately admissible to assessee in a way similar to benefits available to direct exporter. Where construction results in equity rather than injustice, then such construction should be preferred to li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided that the profits computed under cl. (a) or cl. (b) or cl. (c) of this subsection shall be further increased by the amount which bears to ninety per cent of any sum referred to in cl. (iiia) (not being profits on sale of a licence acquired from any other person) and cls. (iiib) and (iiic) of s. 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee. (3A) For the purposes of sub-s. (1A), profits derived by a supporting manufacturer from the sale of goods or merchandise shall be,- (a) in a case where the business carried on by the supporting manufacturer consists exclusively of sale of goods or merchandise to one or more export houses or trading houses, the profits of the business (b) in a case where the business carried on by the supporting manufacturer does not consist exclusively of sale of goods or merchandise to one or more export house or trading houses, the amount which bears to the profits of the business the same proportion as the turnover in respect of sale to the respective export house or trading house bears to the total turnover of the business carried on by the assessee. Explanation-For the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, other than those specified in cl. (b), if the sale proceeds of such goods or merchandise exported out of India are received in, or brought into, India by the assessee (other than the supporting manufacturer) in convertible foreign exchange within a period of six months from the end of the previous year or where the Chief CIT of CIT is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Chief CIT of CIT may allow in this behalf. 12. Expln. 1 -The sale proceeds referred to in cl. (a) shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the RBI. 13. From the above definition, it is very clear that for the purpose of s. 80HHC(1) the profit is computed for the assessee who is: (i) Who is a manufacturing exporter under s. 80HHC(3)(a) (ii) Who is a trading exporter under s. 80HHC(3)(b) (iii) Who is manufacturer and a trading exporter under s. 80HHC(3)(c). From the definition under s. 80HHC(3) r/w s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : "In construing a statutory provision the first and foremost rule of construction is the literary construction. All that the Court has to see at the very outset is what does the provision say. If the provision is unambiguous and if from the provision the legislative intent is clear, the Court need not call into aid the other rules of construction of statutes. The other rules of construction are called into aid only when the legislative intent is not clear." 16. Therefore, in the present case the provisions in the statute are very clear and the language of the statute cannot be strained. In taxing statute, one has to look what is clearly said. In view of above discussions the claim of the assessee in the revised return without following the computation as provided under s. 80HHC(3A) r/w s. 80HHC(1A) and Expln. (b) to s. 80HHC which defines export turnover is not acceptable. The AO has rightly rejected the claim of the assessee in the revised return for an amount of Rs. 2,60,23,142 and rightly accepted the claim under s. 80HHC for amount of Rs. 2,45,98,416, Le., the income as per original return at Rs. 14,24,730 has rightly been accepted by the AG. Thus, the order of learned CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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