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TMI Blog2014 (5) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... nce between the language of 80HHC(3) and that of Section 80HHE(3) - There may not be any material difference between sub-Section 3 of each of the sections but they certainly operate in different fields – Decided in favour of Assessee. Determination of admissible deduction u/s 80HHE(1) of the Act - Whether the turnover and profit or loss arising out of the business of gear box etc. is to be taken into account for the purpose of determining admissible deduction u/s 80HHE(1) of the Act – Held that:- The turnover of business which can be taken into account is only the turnover of the computer software or in respect of providing technical service as the case may be - Any reference to Section 80HHC for the purpose of understanding the mechanis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, Papers, Power House, Railways, Mining etc. The assessee has also got a software business called Computer Aided Design Software at Chennai. This was established as a separate line of activity in Chennai to export 100% of its product. In computing the income of the assessee, the Assessing Officer computed the income arising out of the business in respect of gear box etc under the heading A and in respect of the software business under the heading B . In other words, these two different activities were differently treated even in the assessment order. The CIT (A) proceeded on the basis that obviously there is no absolute clarity in the language of the Section, otherwise all this debate about the interpretation of the term total tur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged in the business of export out of India of any goods or merchandise except minerals and mineral oil , whereas Section 80HHE contemplates a case where the assessee is engaged in the business of export of computer software or in the business of providing technical services outside India. Mr. Bajoria submitted that it is altogether erroneous to proceed on the basis that the sections operate in the same field or are intended to cover the same activity. Therefore, the ratio of the judgments arising out of any interpretation of Section 80HHC cannot be applied to any question arising out of Section 80HHE. Mr. Bhowmick, learned advocate appearing for the Revenue, submitted that the decided cases appear to have proceeded in the line th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of Section 80HHE, if the judgments rendered in the cases arising out of Section 80HHC are to be applied then a wrong result is bound to follow. We are, as such, of the opinion that the first question, formulated above, must be answered in the affirmative and in favour of the assessee. In so far as the second question is concerned, Mr. Bajoria drew our attention to a judgment of the Delhi High Court in the case of C.I.T. vs. Padmini Technologies Ltd., reported in 254 CTR 611. The assessee, in the case before Delhi High Court, was running and managing two separate units. One of the units was engaged in the business of multimedia including exports thereof and the other unit was engaged in the manufacture of PET jars. The Delhi High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns it can be said that the business referred to in sub-Section (3) is the business appearing from sub-Section (1). What did the legislature have in mind while using the word business has not been left unidentified. In sub- Section (1), the word business has itself been defined in clauses (i) and (ii) of sub-Section (1) quoted above. Therefore, the conclusion is bound to be that the turnover of business which can be taken into account is only the turnover of the computer software or in respect of providing technical service as the case may be. Any reference to Section 80HHC for the purpose of understanding the mechanism of sub-Section (3) of Section 80HHE is likely to lead to wrong conclusion. The legislature, in this case, was only conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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