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TMI Blog1990 (9) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80-0 were rejected by the Board on the ground that the agreements included supply of drawings, designs, etc., for construction projects within the meaning of section 80HHB and, therefore, the agreements were out of the ambit of section 80-0 in view of the provisions of section 80HHB(5). Admittedly, the Board did not, as such, examine whether the agreements in question satisfied the conditions laid down for approval in section 80-0 of the Act. This approach of the Board, in my judgment, is not quite correct. Section 80-0 clearly provides that where the gross total income of an assessee includes any income by way of royalty, commission, fees or any similar payment received from the government of a foreign State or a foreign enterpri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1990 (Gammon India Ltd. v. CBDT [1990] 184 ITR 458). A question was, however, raised as to whether it would be proper for the Board to ignore the overriding provisions of section 80HHB(5) in terms of which income of the nature covered by section 80HHB(1)(a) or (b) does not qualify for deduction under any other provisions under the heading 'C' of Chapter VI-A including section 80-O. In this context, it is desirable to mention that section 80HHB was brought into the Income-tax Act by the Finance Act, 1982, with effect from April 1, 1983. The Finance Bill, 1982, was introduced in the Lok Sabha on February 27, 1982. As per clause 18 of the Bill, section 80HHB had four sub-sections. Sub-section (5) was introduced subsequently. The relevant p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat where an Indian company or a non-corporate taxpayer resident in India derives any profits and gains from the Business of execution of project under a contract entered into by him with the Government of foreign State or any statutory or other public authority or agency in foreign State or with a foreign enterprise, he will be entitled to a deduction, in the computation of his taxable income, of 25 per cent. of such profits and gains, subject to certain conditions. This concession will also be available where the assessee undertakes the execution of any work in connection with any foreign project undertaken by any other person." From the Notes on Clauses and Memo explaining the provisions, it is evident that the provisions of section 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of view of the conditions laid down in section 80-0 and leaves it to the Assessing Officer whether or not a part or whole of the income under the agreement also falls under section 80HHB so as to deprive him of the benefit under section 80-0, the assessee will not be prejudiced inasmuch as he, then, will have a right of appeal and reference, etc. In the above view of the matter, in my judgment, it is only appropriate that the Board continues to consider the agreements in question purely from the point of view of section 80-0 and grant or refuse approval on that basis. The Board may, if so advised, qualify the approval by making it clear that it will be open to the Assessing Officer to examine whether the whole or a part of the income und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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