COMMISSIONER OF INCOME TAX Vs. HARRISON MALAYALAM LTD.

JUDGEMENT

(1.) Respondent Assessee is a public Limited Company engaged in growing and manufacturing tea besides trading activities. The assessee had an export turnover of Rs.7,24,99,271/-. The total turnover of the assessee came to Rs.40,82,91,806/-. The Assessee had exported tea and had received sale proceeds in foreign exchange. The assessee claimed that the profits derived from export should be computed in accordance with clause (b) of Sub Section (3) of Section 80 HHC.

(2.) For the Assessment year 1987-88, Respondent claimed the deduction u/s 80HHC to the extent of Rs.16,27,562/-. The deduction was restricted to the profits derived from export. For this purpose, the profit derived from export had been calculated in accordance with sub section (3) of Section 80 HHC. However, the provisions of Section 80 AB was also applicable.

(3.) While completing the assessment u/s 143 (3), it was found that there was a loss from Kerla Tea and only a small profit from Tamil Nadu Tea. The Net result of trading in tea was a loss. The business income included in the total income is actually the income from the other activities & income from services rendered, after setting off the losses from tea Ld. Assessment Officer vide its order dated 19.3.1990 held that the deduction is not permissible, as Section 80AB is to be applied.