9911796707
TMI Blog2024 (8) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of these components. A literal reading of the provisions and literal application of the formula does not enable us to exclude the export turnover of the unit in the EPZ from the export turnover of such goods nor from the total turnover of the business. The profit arising out of these units in the EPZ is also not excludable from the profits of the business. We may note that Section 80HHC is a beneficial 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. 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 from the total income. However, while computing the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts in excluding 90% interest received from customers for eligible profits of business of business while calculating deduction under Section 80 HHC of the Act, 1961, stands finally adjudicated by the in [2019] 103 Taxmann.com 249 (Guj.), titled as Principal Commissioner of Income Tax vs. Atul Ltd. The Gujarat High Court relied upon its earlier Division Bench judgment in case of Nirma Industries Ltd. vs. Dy. CIT [2006] 283 ITR 402 (Gujarat). The same was again followed by the Gujarat High Court in CIT vs. Nirma Ltd. [2014] 367 ITR 12. The view taken by the Gujarat High Court has been upheld by the Hon ble Supreme Court. 6. Learned counsel for the revenue does not controvert with regard to the said judgments having been passed by the Gujarat High Court but submits that this Court should independently examine the matter. 7. We have considered the submissions. 8. For the purpose of adjudication of the present appeal, it would be apposite to quote the concerned paras of Atul Ltd. (supra) as under:- 4. Heard the learned Counsel appearing on behalf of the revenue at length. As observed hereinabove, the question, which is posed for the consideration of this Court is, whether the interest c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the business. As observed hereinabove, the issue is directly covered by the decision of the Division Bench of this Court in the case of Nirma Industries (supra). We are in complete agreement with the view that the interest earned/charged by the assessee on the delayed payment of sale consideration (for 90 days) is not required to be excluded for the purpose of computation of deduction under Section 80HHC of the Act. No substantial question of law arises in the present Tax Appeal. Hence, the present Appeal deserves to be dismissed. 9. The question regarding exclusion of 90% interest received from customers for being included as eligible profits of business and thereby requires to be excluded for the computation of deduction under Section 80HHC of the Act, 1961, stands concluded in the aforesaid judgment. 10. We are agree with the view already taken by the Gujarat High Court and decide the aforesaid question of law accordingly in favour of the assessee. 11. We notice that the Gujarat High Court also considered the judgment passed by the Hon ble Supreme Court in CIT vs. K. Ravindranathan Nair (2007) 295 ITR 228/165 Taxman 285 and found that the same has been passed on its own fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended on behalf of the revenue that once the income from the unit in EPZ was included from scope and ambit of total income, it could not be reintroduced for the sake of making a deduction under section 80HHC as profits and gains of the business. Delhi High Court held as under:- 10. Having considered the arguments advanced by the counsel for the parties, while we agree with what the learned counsel for the revenue states that the provisions of Section 10 (A) (4) (iii) would not be applicable for the present assessment year, i.e., 1989-90, we would still not be in a position to agree with his submissions that the export turnover of the unit in the free trade zone is to be excluded for the purposes of computing deduction under Section 80HHC. The deduction under Section 80HHC is to be computed as per the formula specified in Section 80HHC (3) which speaks of three components. The three components being the export turnover in respect of the goods in question, the total turnover of the business carried on by the assessee and the profits of the business. None of these components has reference to the expression total income. The deduction has to be computed on the basis of these compo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
