INCOME TAX ACT, 1961

Section 80HHC

Deduction under section 80HHC - Computation of - Excluding Re-assortment charges and Labour Commission for the purpose of calculating deduction under section 80HHC -

Assessee claimed deduction under section 80HHC. AO excluded the amount of Reassortment Charges and Labour Commission Charges. Having restricted the deduction under section 80HHC, AO passed the order. CIT(A) allowed the appeal of assessee. However, Tribunal allowed the appeal of Revenue. Tribunal held that such charges were not includible in business profits for the purpose of computation of special deduction under section 80HHC. Held: Section 80HHC was amended with effect from 1-4-1992 and Explanation was brought in the same. Prior to the amendment export profits included interest, commission, etc., which did not have element of turnover came to be included in the profit and loss account. By way of amended provisions in the Explanation (ba) to section 80HHC it was no longer permissible to do so. The question of retrospective operation of the 1991 amendment to section 80HHC arose for consideration of Supreme Court in case of P.R. Prabhakar v. CIT [(2006) 284 ITR 548 (SC) : 2006 TaxPub(DT) 1754 (SC)] and disposed of the appeal setting aside the order passed holding that amendment of 1-4-1992 is prospective in nature. Thus, appeal of assessee was allowed.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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