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TMI Blog2009 (4) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... Senior Standing Counsel for Income Tax for the Respondent. JUDGMENT K. RAVIRAJA PANDIAN,J - The correctness of the order of the Tribunal dated 22.2.2006 is put in issue in this appeal by the assessee by formulating the questions of law as follows: "1.Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the appellant is not entitled to deduction Under 80HHC without giving an opportunity to the appellant? 2. Whether the Tribunal is correct in confirming the order of the respondent with reference to the computation of deduction under Section 80HHC even though the Appellant had exported directly and also exported through certain export houses falling within the ambit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, if that is done, the profits would result in a negative figure and as such the assessee would not be eligible for deduction under Section 80 HHC. The Tribunal decided the matter in favour of the revenue. The correctness is canvassed in this appeal by formulating the above questions of law. 3. Learned counsel for the appellant strenuously argued that the assessee was not given an opportunity to put forth his case before the Tribunal and the matter requires to be remitted to the Assessing Officer so as to re-compute the deduction. He further contended that there is no loss, if deduction is properly computed. It is only a profit earning concern and as such he is entitled to the benefit under Section 80 HHC. 4. On the contrary, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.470.04.832 The profit of the business as per explanation (baa) to sec.80HHC for the year comes to Rs.(-) 7,62,82,713/-. The appellant ignored this negative figure and treated it as nil and claimed deduction u/s 80HHC on DEPB income at Rs.4,70,04,832/-." 6. Before the Tribunal, the solitary issue raised was that the Commissioner of Income Tax erred in holding that relief under Section 80-HHC should be allowed to the assessee by ignoring the loss in the export business and that the relief u/s 80HHC should be allowed on export incentives only. It is true that the appellant was not heard while passing the order by the Tribunal but it is not the mistake of the Tribunal. The Tribunal has recorded a finding that despite th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80HHC means a positive profit. In other words, if there is a loss then no deduction would be available under sub-section (1) or sub-section (3)(a) or sub-section 3(b). In arriving at the figure of positive profit, both the profits and the losses will have to be considered. If the net figure is a positive profit then the assessee will be entitled to deduction; if the net figure is a loss then the assessee will not be entitled to deduction. Circular No.636 dated August 31, 1992 of the Central Board nowhere provides for negative profits. It also shows that only positive profits can be considered for purposes of deduction under Section 80HHC. 8. In view of the above, we do not find any merit in this appeal. The tax case appeal is dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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