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TMI Blog2010 (9) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... included in the total turnover for the purpose of computation of deduction u/s 80HHC of the I.T. Act, 1961 - 50 of 2006 - - - Dated:- 3-9-2010 - Sunil Ambwani, Kashi Nath Pandey,JJ. We have heard Shri A.N. Mahajan, learned counsel for the department. Shri Shakeel Ahmad appears for the assessee. This income tax appeal under Section 260A of the Income Tax Act, 1961 arises out of order dated 22.7.2005 passed by the Income Tax Appellate Tribunal in ITA No.878/LUC/2001 for the assessment year 1995-96. The following substantial question of law arises in the income tax appeal for the decision of this Court:- "Whether on the facts and in the circumstances of the case, the Hon'ble I.T.A.T. was justified in law in allowing assessee's c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover" in the formula in section 80HHC one has to give a schematic interpretation. The various amendments made therein show that receipts by way of brokerage, commission, interest, rent, etc., do not form part of business profits as they have no nexus with the activity of export. The amendment made from time to time indicate that they became necessary in order to make the formula workable. If so, excise duty and sales tax also cannot form part of the "total turnover" under section 80HHC (3): otherwise the formula becomes unworkable." Shri Shakeel Ahmad, learned counsel appearing for the assessee points out that these judgments have also been followed in CTT Vs. Ramco Industries Ltd., 316 ITR 434 by the Madras High Court. The reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness profits is not given deduction. It is the business profit which is proportionately reduced by the above fraction/ratio of export turnover? total turnover which constitute 80HHC concession (deduction). Income in the nature of "business profits" was, therefore, apportioned. The above formula fixed a ratio in which "business profits" under Section 28 of the Act had to be apportioned. Therefore, one has to give weightage not only to the words "total turnover" but also to the words "export turnover", "total export turnover" and "business profits". That is the reason why we have quoted hereinabove extensively the illustration from the Direct Taxes (Income tax) Ready Reckoner, of the relevant word. In the circumstances, we cannot interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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