Deduction u/s 80HHC is to be allowed to the extent of Gross Total Income

Deduction u/s 80HHC is to be allowed to the extent of Gross Total Income

Brief of the case

In the case of V. M. Salgaocar & Brother Pvt. Ltd vs. The Asst. Commissioner of Income Tax, Goa High Court has held that deduction u/s 80HHC is to be allowed to the extent of gross total income and not to the extent of business profit only.

Facts of the case

1. The assessee is engaged in the business of export of processed iron ore which is manufactured and produced by the appellant as well as ore in which the appellant trades. the Assessing Officer has determined the income chargeable under
2. The head “Profits and gains of business or profession” at Rs.17,63,97,551/-. income chargeable under the head “Income from House property” was determined at Rs.13,008/- and the income chargeable under the head “Income from other sources” at Rs.2,14,84,346/- the gross total income was determined by the Assessing Officer was a sum of Rs.19,78,94,900/-. when it came to giving a deduction on the said amount, the Assessing Officer had restricted the deduction under Section 80HHC to Rs.17,40,33,719/-.
3. Aggrieved by the said determination, the assessee had preferred an appeal to the Commissioner of Income Tax (Appeals) who by order dated 30.09.2004 rejected the appellant’s contention having regard to the judgment of the Apex Court in Ipca Laboratory Ltd., V/s Deputy CIT 266 ITR 521 where the provisions under Section 80AB were applicable. The learned Senior Counsel further submits that relying upon the judgment of the Andhra Pradesh High Court in CIT V/s Visakha Industries Ltd., 251 ITR 471, the Commissioner of Income Tax (Appeals) held that the deduction under Chapter VI-A is to be computed with reference to the profits of a particular undertaking and not with reference to the gross total income of the assessee.
4. Aggrieved by the said order, the assessee had preferred an appeal before the Tribunal which met with the same fate and dismissed such appeal.

Aggrieved by the decision of Tribunal assessee has filed an appeal in High court.