COMMISSIONER OF INCOME-TAX Vs. DABUR INDIA LIMITED

JUDGEMENT

(1.) This reference, at the instance of the revenue, arises out of the order dated 11.09.1998 passed by the Income-tax Appellate Tribunal in ITA No. 145/Del/1992 pertaining to the assessment year 1989-90. The following question has been referred to us by the tribunal under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as the said Act ):

(2.) The facts are that the assessee claimed deduction under Section 80HHC to the extent of Rs. 16,59,226/-. In claiming such deduction, the assessee also included the export turnover of its unit situated in the Export Promotion Zone (EPZ).

(3.) The Assessing Officer disallowed the claim of the assessee on the ground that the income of the unit located in the EPZ did not form part of the total income by virtue of the provisions of Section 10-A of the said Act. Consequently, the Assessing Officer did not include the turnover of the said unit situated in the tax free export promotion zone for the purposes of computing deduction under Section 80HHC of the said Act. The Commissioner of Income-tax (Appeals) confirmed the order of the Assessing Officer. The assessee, being aggrieved, preferred an appeal before the tribunal and contended that though the income of the unit located in the EPZ did not form part of the total income by virtue of the provisions of Section 10-A of the said Act, the deduction under Section 80HHC was not dependent on this fact. It was contended on behalf of the assessee that the case of the assessee squarely fell within the provisions of Section 80HHC(3) and, according to a plain reading of the said provision, the turnover of the unit situated in the EPZ could not be excluded while computing the deduction under Section 80HHC.