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TMI Blog2011 (8) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment Year 1991-92 for which the relevant previous year was the financial year ended on March 31, 1991. The assessee was amalgamated with M/s. Chand Chhap Fertilizers and Chemicals Limited with effect from January 01, 1994 pursuant to an order dated September 13, 1994 passed by this Court. The amalgamated company was renamed as Duncans Industries Limited with effect from November 01, 1994. b) The assessee carried on the business of inter alia, growing and manufacturing tea in its own tea estates (hereinafter referred to as the "garden tea business"). Such tea was sold by the assessee not only in the domestic market but also by way of export outside India. c) Apart from the said garden tea business, the assessee carried on a separate business of exporting tea purchased by it (hereinafter referred to as the "purchased tea business"). In respect of the said separately purchased tea business, the assessee maintained separate books of account. d) During the previous year ended on March 31, 1991, the assessee earned a profit of Rs.6,14,65,671/- in the purchased tea business which was separately disclosed in its accounts. e) In respect of the profit derived b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee and he worked out the quantum of deduction under Section 80HHC at Rs.4,73,57,023/- by applying the provisions of sub-section (3) of Section 80HHC to the aggregate figures so arrived at by him. j) Being dissatisfied, the assessee preferred an appeal before the Commissioner of Income-tax (Appeal), who, however, by an order dated February 27, 1997 following his order dated February 24, 1997 for the Assessment Year 1990-91, declined to grant relief to the appellant. k) Against the identical issue involved in the assessee's case for the Assessment Year 1990-91, the appellant preferred separate appeals before the Income-tax Appellate Tribunal against the order of the Commissioner of Income-tax (Appeals) for the Assessment year 1990- 91 and 1991-92. l) The Tribunal by an order dated June 23, 2004 allowed the assessee's appeal for the Assessment Year 1990-91 but the appeal for the Assessment Year 1991-92 was dismissed. The Tribunal accepted that the purchased tea business and garden tea business were two separate and distinct businesses and that the Assessing Officer had separately computed the profits in respect of each of the two businesses. The Tribunal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, is engaged in the business of export out of India of any goods or merchandise to which this section applies, then shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee, the deduction of the profits derived by the assessee from the export of such goods or merchandise: Provided that if the assessee, being a holder of an Export House Certificate or a Trading House Certificate, (hereafter in this section referred to as an Export House or a Trading House, as the case may be,) issues a certificate referred to in clause (b) of sub0section (4A), that in respect of the amount of the export turnover specified therein, the deduction under this sub-section is to be allowed to a supporting manufacturer, then the amount of deduction in the case of the assessee shall be reduced by such amount which bears to the total profits of the export business of the assessee the same proportion as the amount of export turnover specified in the said certificate bears to the total export turnover of the assessee" Prior to substitution of the language of Sub-section (3) of Section 80HHC by the Finance Act, 1990 w.e.f. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the separate business of the assessee should be computed separately for the purpose of calculating the benefit of deduction under Section 80HHC as would appear from the fact that the phrase "the business" has been has been employed therein. Dr. Pal, therefore, prays for setting aside the order passed by the Tribunal and for giving the same benefit has been given to his client in respect of earlier assessment year by separately calculating the profit of the two businesses. In support of his contention, Dr. Pal relies upon the following decisions: 1) Commissioner of Income-tax vs. Rathore Brothers, reported in (2002) 254 ITR 656; 2) Commissioner of Income-tax vs. Jindal Fine Industries, reported in (2008) 307 ITR 307; 3) Commissioner of Income-tax vs. M. Gani & Co., reported in (2008) 301 ITR 381; 4) Commissioner of Income-tax vs. Suresh B. Mehta, reported in (2007) 291 ITE 462; Mr. Shome, the learned Senior Advocate appearing on behalf of the Revenue, has, on the other hand, opposed the aforesaid contention of Dr. Pal and has contended that after the amendment of sub-section (3), at present, there is no scope of separate computation in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income." Section 80-B(5) is also relevant. Section 80-B(5) provides that "gross total income" means total income computed in accordance with the provisions of the Income-tax Act. 14. Section 80-AB is also in Chapter VI-A. It starts with the words "where any deduction is required to be made or allowed under any section of this Chapter." This would include S. 80-HHC. Section 80-AB further provides that "notwithstanding anything contained in that section." Thus S. 80-AB has been given an overriding effect over all other sections in Chapter VIA. Section 80-HHC does not provide that its provisions are to prevail over S. 80-AB or over any other provision of the Act. Section 80-HHC would thus be governed by S. 80-AB. Decisions of the Bombay High Court and the Kerala High Court to the contrary cannot be said to be the correct law. Section 80-AB makes it clear that the computation of income has to be in accordance with the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any. Thus the word "profit" has the same meaning in S. 80-HHC (1) and (3)." (Emphasis supplied by us). The principles mentioned above have been all along followed by the Supreme Court in the subsequent cases of ITO, Bangalore vs. Induflex Products Pvt. Ltd ( (2006) 1 SCC 458) and Commissioner of Income-tax, Pune vs. Shirke Construction Equipment Ltd. (AIR 2007 SC 2089). In our opinion, in view of the aforesaid principles laid down by the Apex Court there is no scope of advancing any argument that the different business of the assessee are required to be considered separately for the purpose of calculating the deductions under Section 80 HHC of the Act. We now propose to deal with the decisions cited by Dr. Pal. Dr. Pal has mainly relied upon the decision of the Madras High Court in the case of Commissioner of Income-tax vs. Rathore Brothers (supra), which was decided prior to the passing of the decision of the Supreme Court in the case of IPCA Laboratory Ltd. vs. Deputy Commissioner of Income-tax, Mumbai (supra) and in the other three decisions of different High Courts, the above case of Rathore Brothers has been followed. In none of the other cases, the High Court took ..... X X X X Extracts X X X X X X X X Extracts X X X X
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