Olam Exports (India) Ltd. vs Commissioner of Income Tax

C.N. Ramachandran Nair, J.—In the appeal filed by the assessee, the questions raised pertain to computation of deduction for export profit u/s 80HHC of the Income Tax Act. The assessee having its industry in a backward area was entitled to deduction u/s 80IB of the Income Tax Act. However, by virtue of Section 80IB(13), read with Section 80IA(9) of the Act the assessee will not be entitled to claim deductions both u/s 80IB and u/s 80HHC of the Act. Tribunal following their Full Bench decision upheld the disallowance u/s 80IB(13) of the Act, but granted deduction u/s 80HHC of the Act. Even though senior counsel appearing for the assessee contended that deduction u/s 80HHC is a full code by itself and no exclusion would be made while computing eligible deduction, we notice that Section 80IB and u/s 80HHC come under Chapter VI-A and by virtue of specific exclusion u/s 80IB(13) of the Act the assessee is not entitled to simultaneous deduction of both. In other words, while computing deduction u/s 80HHC deduction granted u/s 80IB cannot be reckoned or has to be excluded. We find the order of the Tribunal is consistent with the statutory provisions and, therefore, appeal on this issue is rejected.

So far as computation of relief u/s 80HHC is concerned, we find that assessment requires reconsideration because by virtue of the decision of the Supreme Court in Janatha Cashew Exporting Co. Vs. Commissioner of Income Tax, the assessee is entitled to deduction of export profit arising from export of goods made through Export Houses, the assessee acting as supporting manufacturer. However, it is on condition of availability of disclaimer certificate issued by the Export Houses. It is for the assessee to produce disclaimer certificate in revised assessment proceedings before the officer. So far as assessee''s claim for determination of deduction before excluding carry forward or set-off loss is concerned, the decision of the Supreme Court in Commissioner of Income Tax, Pune Vs. Shirke Construction Equipment Ltd., is against the proposition canvassed by the assessee. Therefore, assessment on this does not warrant any modification. Appeal is consequently disposed of partly allowing the claim and directing the Assessing Officer to re-work relief u/s 80HHC in terms of the decision above referred after giving an opportunity of hearing to the assessee.