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TMI BlogDeduction in respect of profits retained for export businessX X X X Extracts X X X X X X X X Extracts X X X X ..... he amount of deduction in the case of the assessee shall be reduced by such amount which bears to the 4 [ total profits derived by the assessee from the export of trading goods, the same proportion as the amount of export turnover specified in the said certificate bears to the total export turnover of the assessee in respect of such trading goods ]. (1A) Where the assessee, being a supporting manufacturer, has during the previous year, sold goods or merchandise to any Export House or Trading House in respect of which the Export House or Trading House has issued a certificate under the proviso to sub-section (1), there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee, 5 [ a deduction to the extent of profits, referred to in sub-section (1B), ] derived by the assessee from the sale of goods or merchandise to the Export House or Trading House in respect of which the certificate has been issued by the Export House or Trading House .] 6 [ (1B) For the purposes of sub-sections (1) and (1A), the extent of deduction of the profits shall be an amount equal to- ( i ) eighty per cent thereof for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (52 of 1962), shall, for the purposes of this section, be deemed to be the sale proceeds thereof .] 15 [ (3) For the purposes of sub-section (1),- ( a ) where the export out of India is of goods or merchandise manufactured 16 [ or processed ] by the assessee, the profits derived from such export shall be the amount which bears to the profits of the business, the same proportion as the export turnover in respect of such goods bears to the total turnover of the business carried on by the assessee ; ( b ) where the export out of India is of trading goods, the profits derived from such export shall be the export turnover in respect of such trading goods as reduced by the direct costs and indirect costs attributable to such export ; ( c ) where the export out of India is of goods or merchandise manufactured 17 [ or processed ] by the assessee and of trading goods, the profits derived from such export shall,- ( i ) in respect of the goods or merchandise manufactured 18 [ or processed ] by the assessee, be the amount which bears to the adjusted profits of the business, the same proportion as the adjusted export turnover in respect of such goods bears to the adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or clause ( b ) or clause ( c ) of this sub-section or after giving effect to the first proviso, as the case may be, shall be further increased by the amount which bears to ninety per cent of any sum referred to in clause ( iiie ) of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee, if the assessee has necessary and sufficient evidence to prove that,- ( a ) he had an option to choose either the duty drawback or the Duty Free Replenishment Certificate, being the Duty Remission Scheme; and ( b ) the rate of drawback credit attributable to the customs duty was higher than the rate of credit allowable under the Duty Free Replenishment Certificate, being the Duty Remission Scheme. Explanation . -For the purposes of this clause, rate of credit allowable means the rate of credit allowable under the Duty Free Replenishment Certificate, being the Duty Remission Scheme calculated in the manner as may be notified by the Central Government : ] 20 [Provided also that in case the computation under clause ( a ) or clause ( b ) or clause ( c ) of this sub-section is a loss, such loss shall be set of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed 26 [ in accordance with the provisions of this section :]] 27 [Provided that in the case of an undertaking referred to in sub-section (4C), the assessee shall also furnish along with the return of income, a certificate from the undertaking in the special economic zone containing such particulars as may be prescribed, duly certified by the auditor auditing the accounts of the undertaking in the special economic zone under the provisions of this Act or under any other law for the time being in force. ] 28 [ (4A) The deduction under sub-section (1A) shall not be admissible unless the supporting manufacturer furnishes in the prescribed form along with his return of income,- ( a ) the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed on the basis of the 29 [ profits ] of the supporting manufacturer in respect of his sale of goods or merchandise to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r shall not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962) : Provided that in relation to any assessment year commencing on or after the 1st day of April, 1991, the expression total turnover shall have effect as if it also excluded any sum referred to in clauses ( iiia ), ( iiib ) 36 [ , ( iiic ), ( iiid ) and ( iiie ) ] of section 28 ; ] 37 [ ( baa ) profits of the business means the profits of the business as computed under the head Profits and gains of business or profession as reduced by- ( 1 ) ninety per cent of any sum referred to in clauses ( iiia ), ( iiib ) 38 [ , ( iiic ), ( iiid ) and ( iiie ) ] of section 28 or of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits ; and ( 2 ) the profits of any branch, office, warehouse or any other establishment of the assessee situate outside India ; ] ( bb ) 39 [ *** ] 40 [ 41 [ ( c ) ] Export House Certificate or Trading House Certificate means a valid Export House Certificate or Trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds where the Chief Commissioner and ending with the words may allow in this behalf by the Finance Act, 1999, w.e.f. 1-6-1999. Prior to substitution, the said portion, as inserted by the Finance Act, 1990, w.e.f. 1-4-1991, read as under : where the Chief Commissioner or Commissioner 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 Commissioner or Commissioner may allow in this behalf. 12. Inserted by the Finance Act, 1999, w.e.f. 1-6-1999. 13. Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991. 14. Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992. 15. Substituted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992. Prior to substitution, sub-section (3) was substituted by the Finance Act, 1990, w.e.f. 1-4-1991. 16. Inserted by the Finance Act, 1992, w.e.f. 1-4-1992. 17. Inserted by the Finance Act, 1992, w.e.f. 1-4-1992. 18. Inserted by the Finance Act, 1992, w.e.f. 1-4-1992. 19. Second, third and fourth provisos inserted by the Taxation Laws (Amendment) Act, 2005, w. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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