75th Founding Day Lecture Meeting on “India@2030” Know More

October 2008

Export profit : Deduction u/s.80HHC of Income-tax Act, 1961 : A.Y. 2001-02 : Separate accounts maintained for export sales and domestic sales : Deduction not to be on basis of total turnover of all business : Assessee entitled to deduction fully on export

By K. B. Bhujle, Advocate
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6 Export profit : Deduction u/s.80HHC of
Income-tax Act, 1961 : A.Y. 2001-02 : Separate accounts maintained for export
sales and domestic sales : Deduction not to be on basis of total turnover of all
business : Assessee entitled to deduction fully on export profits.


[CIT v. M. Gani and Co., 301 ITR 381 (Mad.)]

The assessee was a manufacturer of garments and fancy items
and an exporter. For the A.Y. 2001-02 the assessee claimed deduction u/s.80HHC
of the Income-tax Act, 1961 on the export turnover ignoring the results of
domestic turnover. The Assessing Officer considered the composite turnover
comprised of both export turnover and domestic turnover and recomputed the
deduction u/s. 80HHC. The Tribunal allowed the claim of the assessee.

 

On appeal by the Revenue, the Madras High Court upheld the
decision of the Tribunal and held as under :

“The assessee having maintained separate books of account
for export business and domestic business, it was entitled to deduction
u/s.80HHC of the Act fully on the export profit.”

 


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