- (1.) HEARD Mr. Sanjeev Shah, learned counsel for the appellant-assessee, and Mr. K. R. Chaudhary, learned counsel for the respondent-Revenue.
(2.) THE Income-tax Appellate Tribunal by its order dated January 8, 2003, for the assessment year 1997-98 relating to the appellant-assessee relying upon the Division Bench judgment of this court in the case of IPCA Laboratories Ltd. v. Deputy CIT (No. 1) [2001] 251 ITR 401, held that the Assessing Officer was not wrong in holding that in view of the fact that the assessee had loss from the export of trading goods, computed under Sub-section (3) of Section 80hhc the ultimate figure of deduction under Sub-section (3) is negative profit (loss) and, therefore, the deduction under Section 80hhc of the Income-tax Act, 1961, was not available to the assessee.
(3.) CHALLENGING the said order, learned counsel for the assessee submitted that the loss suffered by the assessee from the export of trading goods while computing the deduction under Sub-section (3) of Section 80hhc was required to be taken as nil. Learned counsel submitted that the proviso to Sub-section (3) (c) of Section 80hhc is an independent provision unconnected with Sub-section (3) and in view thereof on the profits earned by the assessee on the export of merchandise manufactured by the assessee, the deduction under Section 80hhc was admissible. Learned counsel for the assessee sought to distinguish the Division Bench judgment of this court in IPCA Laboratories Ltd. [2001] 251 ITR 401 and the judgment of the Supreme Court in IPCA Laboratory Ltd. v. Deputy CIT [2004] 266 ITR 521 confirming the Division Bench judgment of this court. Learned counsel for the appellant relied upon the judgment of the Delhi High Court in Modi Cement Ltd. v. Union of India [1992] 193 ITR 91 and the judgment of the Allahabad High Court in the case of Indo-Gulf Fertilizers and Chemicals Corporation Ltd. v. Union of India [1992] 195 ITR 485. Learned counsel also invited our attention to Black's Law Dictionary to cite the meaning of the expression "further" and "increase" occurring in the proviso appended to Sub-section (3) of Section 80hhc. He also invited our attention to the circular issued by the Central Board of Direct Taxes pursuant to the amendment of Section 80hhc in the year 1991.;