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TMI Blog2008 (10) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Act ):- [Whether] on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal has erred in law in holding that export turnover of the unit situated in the Export Promotion Zone has to be taken into account while computing the eligible deduction under Section 80HHC of the Income-tax Act, 1961 ?‖ 2. The facts are that the assessee claimed deduction under Section 80HHC to the extent of ₹ 16,59,226/-. In claiming such deduction, the assessee also included the export turnover of its unit situated in the Export Promotion Zone (EPZ). 3. The Assessing Officer disallowed the claim of the assessee on the ground that the income of the unit located in the EPZ did not form part of the total income by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he tribunal concluded that the export turnover of the unit situated in the EPZ has to be taken into consideration for computing the eligible deduction under Section 80HHC. It is in respect of this conclusion of the tribunal that the revenue sought a reference and the above mentioned question has been referred to us for our decision. 5. Before us, the learned counsel for the revenue contended that the assessee was entitled to exemption in respect of all income arising from its unit in the EPZ by virtue of Section 10-A. He submitted that Section 10-A falls within Chapter III which deals with incomes which do not form part of the total income. The argument of the learned counsel for the revenue was that once the income from the unit in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her provision of this Act, in computing the total income of the assessee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment years, or of any previous year, relevant to any subsequent assessment year,- (i) xxx xxx xxx xxx (ii) xxx xxx xxx xxx (iii) no deduction shall be allowed under Section 80HH or Section 80HHA or Section 80-I or Section 80-J in relation to the profits and gains of the industrial undertaking.‖ Section 10(A)(6)(iii) as it exists on the statute book today is as under:- ― 10A. Special provision in respect of newly established undertakings in free trade zone, etc.- (1) xxx xxx xxx xxx xxx (2) xxx xxx xxx xxx xxx (3) xxx xxx xxx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned counsel for the assessee also submitted with reference to the Supreme Court decision in the case of Commissioner of Income-tax, West Bengal I, Calcutta v. Vegetables Products Limited: 88 ITR 192(SC) that where two interpretations are possible, the one beneficial to the assessee ought to be taken. He also submitted that, in any event, where a plain and literal interpretation of the statute is clear, then the same should be taken without referring to any other provisions of the Act. For this proposition, he placed reliance on the decision of the Supreme Court in the case of The State of West Bengal v. Kesoram Industries Limited and Others: 2004 (10) SCC 201 (227). 9. In rejoinder, the learned counsel for the revenue submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial provision for the purposes of encouraging exports. Although in this case, there is no doubt with regard to the interpretation or the manner in which the deduction under Section 80HHC is to be computed, even if there were any such doubts, the provision would have to be interpreted to fulfill the objective of giving a benefit to the assessee who indulges in exports. Looked at in any manner, we are of the opinion that the export turnover from the unit in the EPZ is not to be excluded while computing the deduction under Section 80HHC. The deduction that is to be computed is without reference to the total income. Once the deduction is computed in terms of the formula prescribed in Section 80HHC(3), the amount so arrived at is to be deducted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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