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TMI Blog2010 (9) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... of service of notice, the Bench therefore decided to dispose the appeal after hearing the learned DR and considering the material placed on record. 3. We have gone through the orders of the authorities below and found that assessee s claim for deduction u/s 80IB was reduced by the AO on the plea that TDS has not been deducted in respect of payment of ₹ 16,49,762/-, therefore same cannot be allowed in view of the provisions of Section 40(a) of the Act. The AO was of the view that in view of sub-sections (3) to (11), 11A and 11B, no deduction can be allowed with respect to the amount disallowed as inadmissible under Chapter XVII-B of the Act. 4. By the impugned order, CIT(A) allowed assessee s claim of deduction u/s 80IB after ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to undertake a two-step exercise in the following sequence. He has to first compute the profits of the business under the head Profits and gains of business or profession. In other words, he will have to compute business profits, in terms of the Act, by applying the provisions of sections 28 to 44 thereof. This means that profit of export business is to be computed by applying the provisions of section 28 to 44 and the addition made according to these sections also merged into the profit, which qualify for the deduction. A more explicit and clear observation on this aspect of the matter is to be found in para 21 of the Special Bench Judgment of Calcutta Bench of ITAT reported as 116 ITD 1 at page 43. Para 21 therein states a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct provides that the profit gains of business shall be computed with in accordance with the provisions contents in section 30 to 43D of the I.T.Act. The profits gains of the business is computed by the AO under the head profit gains of business should be taken as the profits of the business for the purpose of computation of deduction u/s 80HHC. In my view, the addition so made also qualifies for the deduction under the provisions of section 80IB. There is no bar according to the statutes that additions made by the AO will not qualify for the deduction. The disallowance of expense is for technical breach of non-deduction of TDS for which separate interest and penal provisions are provided u/s 201 and 271C respectively. To penalize ..... X X X X Extracts X X X X X X X X Extracts X X X X
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