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TMI Blog2014 (4) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... SE-Unit or to all the businesses carried out by the Assessee namely the SE-Unit as well as the F-Unit is to be determined - use of the word 'total' in section 80HHC(3) of the Act signifies that it is not limited to a particular unit but refers to all the businesses carried on by the Assessee - The decision in GJ. Fernandez Versus ACIT [2010 (10) TMI 843 - Karnataka High Court] followed - the word 'export turnover' is also defined in explanation (ba) - It excludes certain amounts mentioned - it does not exclude the turnover of the business other than the one doing export business - the word 'business' means the all businesses carried on by the Assessee and it is not limited to the export oriented unit namely the SE-Unit - decided in favour of Revenue. - ITR No. 15 of 2002 - - - Dated:- 10-4-2014 - Shri Yatindra Singh, C.J. And Shri Prashant Kumar Mishra,JJ. For the Applicant : Shri Anand Dadariya, counsel For the Respondent : Shri Shashank Dubey, Senior counsel with Shri Anand Mohan Tiwari ORDER 1. The main point involved in this reference at the instance of the Income Tax Department (the Department) under section 256 (1) of the Income Tax Act, 1961 (the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Department filed an application under section 256(1) of the Act to refer the questions to the High Court. This application was allowed on 14.09.2001 and the following two questions have been referred to this court: (i) Whether on the facts and circumstances of the case, the Tribunal was justified in law in directing the AO to calculate relief under section 80HHC taking into consideration the 'profit of the business' and 'total turnover' of the business carried on by the assessee in respect of its solvent extraction unit alone and directing the AO to ignore the profits and turnover of the Flour Mill. (ii) Whether the use of the expression profit of the business and total turnover of the business carried on by the assessee in section 80HHC(3)(a) is restricted to only the profit and turnover of the business of export out of India of any goods or merchandise or is applicable to the total profit and total turnover of all other businesses which may also include non export goods and merchandise. 10. The Tribunal has framed the questions in detail. However, the basic point in both the questions has been mentioned by us in the opening paragraph of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word 'business' used in section 80HHC(3) of the Act. Is it confined only to export oriented unit namely the SE-Unit or to all the businesses carried out by the Assessee namely the SE-Unit as well as the F-Unit. 15. There is difference of opinion among the High Courts: The Madras High Court in three decisions namely Commissioner of Income-Tax v. Madras Motors Ltd {(2002) 257 ITR 60 (Mad)} (the Madras-Motors case); Commissioner of Income-Tax v. M. Gani Co. {(2008) 301 ITR 381 (Mad)}; and Commissioner of Income-Tax v. Suresh B. Mehta {(2007) 291 ITR 462 (Mad)} and The Delhi High Court in The Commissioner of Income Tax (Central) v. Padmini Technologies Ltd. (ITA-1265 of 2007, decided on 14.09.2011) (the Padmini-Technologies case) have taken a view favourable to the Assessee; Whereas, the Karnataka High Court in G.J. Fernandez v. Assistant Commissioner of Income Tax {(2011) 241 CTR (Kar) 100} (the Fernandez case) has taken decision in favour of the Department. 16. Out of the three decisions of the Madras High Court, the Madras- Motors case is a detailed one and the Padmi-Technologies case of the Delhi High Court is based on the same. 17. The Madras-Motors c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i High Court in Padmini-Technologies case. 25. In view of the above, both the questions are answered in negative in favour of the Department and against the Assessee. CHIEF JUSTICE JUDGE Appendix-1 Deduction in respect of profits retained for export business. 80HHC. (1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of export out of India of any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of the profits derived by the assessee from the export of such goods or merchandise: ... (2)(a) This section applies to all goods or merchandise, other than those specified in clause (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 manufactuer) in convertible foreign exchange, within a period of six months from the end of the previous year or, where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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