ITA 675 OF 2004 IN HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax) ORIGINAL SIDE CIT,KOLKATA-II Versus DUNCAN INDUSTIRES LTD. BEFORE: Hon'ble JUSTICE GIRISH CHANDRA GUPTA Hon'ble JUSTICE ARINDAM SINHA Date : 23rd April, 2015. For respondent/assessee : MR.J.P. KHAITAN,SR. ADVOCATE Court : subject matter of challenge in this appeal is judgement and order dated 23rd June, 2004 passed by learned Income Tax Appellate Tribunal pertaining to assessment year 1990-91. Although judgement related to assessment year 1991-92 as well but appeal is restricted to assessment year 1990-91. question formulated at time of admission of appeal reads as follows:- W hether on facts and in circumstances of case, for assessment year 1990-91, assessee is entitled to deduction under Section 80HHC(3)(a) of Income Tax Act, 1961 as claimed by it or under Section 80HHC(3)(b) as held by Assessing Officer? No one appeared for appellant. Mr. Khaitan, learned Senior Advocate has very fairly assisted us in haring out matter. question for consideration indicated above naturally depends upon construction of following two clauses of sub-section (3) of section 80HHC. ( 3)For purposes of sub-section (1), profits derived from export of goods or merchandise out of India shall be - (a )in case where business carried on by assessee consists exclusively of export out of India of goods or merchandise to which this section applies, profits of business as computed under head P rofits and gains of business or profession . (b) In case where business carried on by assessee does not consist exclusively of export out of India of goods or merchandise to which this section applies, amount which bears to profits of business (as computed under head P rofits and gains of business or profession ) same proportion as export turnover bears to total turnover of business carried on by assessee. It is not in dispute that assessee being Indian company in this case, carried on business which did not consist exclusively of export out of India of goods or merchandise to which this section applies. Therefore, clause (a) had no manner of application. benefit under Section 80HHC has to be, in that case, worked out in accordance with clause (b). learned Tribunal has taken contrary view on basis of views expressed by Madras Bench of Tribunal wherein following opinion was expressed:- B ut in context of Section 80HHC intention is to identify export profit and we must therefore consider unit which carries on such export activity to be business in respect of which profit is to be computed in accordance with provisions of Act. In fact, reference to other sections such as 80J would even support view that just as industrial undertaking is independently considered for computation of profit therefrom for relief under that section, export business is to be identified as separate unit for purpose of section 80HHC also as it is only method of ascertaining profits of that particular business to which relief is to be given. These sections are welfare measures intended to be carried out in full and not to be curtailed by restrictive construction. We are satisfied that assessee falls within scope of sub- section 3(a) because turnover and profit is easily ascertainable and consequently it is not case where recourse had to be made under sub-section (3)(b) for purpose of granting relief. reasoning that export business is to be identified as separate unit for purpose of Section 80HHC is clear violation of section quoted above. section is very clear. assessee carrying on business exclusively of export of of type of goods covered by Section 80HHC shall have his income assessed in same manner as computed under head Profits and Gains of business or profession. But assessee not exclusively carrying on business of export shall have his income computed for purposes of Section 80HHC on proportionate basis as indicated in Clause (b) of Sub-section (3). Any other view was not possible. view taken by learned Tribunal is patently wrong. In result, question formulated is answered by holding that assessee is entitled to deduction under Sub-section (3)(b) of Section 80HHC as held by assessing officer. order of Tribunal is set aside and order of assessing officer is restored. appeal is, thus, disposed of. (GIRISH CHANDRA GUPTA, J.) (ARINDAM SINHA, J.) ssaha AR(CR) C. I. T. Kolkata - II v. Duncan Indiustries Ltd