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TMI Blog2006 (3) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... . Dy. CIT [2004] 266 ITR 521. The issue before the Court was whether the deduction could be allowed with respect to the profits from the export of manufactured goods where the assessee incurred loss in export of trading goods. The Hon'ble Court pointed out that net result of export of manufactured and trading goods has to be considered for the purpose of deduction under section 80HHC. Only if there is positive profit, the assessee would be entitled to the deduction. However, if there is a loss, the assessee would not be entitled to the deduction. Thereafter, the Hon'ble Court also referred to sections 80AB and 80HHC. It was pointed out that provisions of section 80AB have been given an overriding effect overall other sections in Chapter VI- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjusted against the export profits of the current year. Section 80HHC refers to computation of profits from export activity only. Therefore, non-export losses whether of current year or of earlier years cannot be considered. Section 72 provides that brought forward losses of the business will be treated as current year's losses for the purpose of set-off against the current year's income from the business. This will also be consisting with section 80HHC(3)(c), which provides for computation of 'profits derived from such export'. In working out profits derived from export, one can only adjust losses from export activity whether of the current year or brought forward from earlier years. There is no scope to set off non-export brought forwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tting off of the profits of manufactured goods against the losses from trading goods, yet the Hon'ble Supreme Court very expressedly held that provisions of section 80AB have an overriding effect over the provisions of section 80HHC. Nowhere the Hon'ble Court pointed out that such overriding effect was only in relation to the export business of manufactured and trading goods and, therefore, the aforesaid finding of the Hon'ble Court was a general finding of law not only in relation to section 80HHC but also in relation to all other sections in Chapter VI-A. The Court in no uncertain terms pointed out that section 80AB and other section override the provisions of section 80HHC and not the vice versa. Section 80A(2) clearly provides that sum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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