ASSTI. COMMR. OF L.T. BANGALORE versus M/S. MICRO LABS LTD.

Citation: [2015] 11 S.C.R. 1154 · Decided: 10-12-2015 · Supreme Court of India · Bench: ANIL R. DAVE
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Judgment (excerpt)

A 
B 
c 
D 
E 
[2015) 11S.C.R.1154 
ASSTI. COMMR. OF l.T. BANGALORE 
v. 
M/S. MICRO LABS LTD. 
(Civil Appeal No. 7427 of 2012) 
DECEMBER 10, 2015 
[ANIL R. DAVE AND DIPAK MISRA, JJ.] 
Income Tax Act, 1961: s.80-1 -
Whether while 
considering the deduction under the provisions of s. 801A or/ 
ands. 80-18, assessee is not entitled to deduction in respect 
of the profits and gains under the provisions of s. 80HHC or 
whether the assessee is entitled to deductions under the 
stated all the three sections in respect of the same profits i.e. 
whether deduction allowed uls. 801A is to be reduced from the 
gross profits while computing deduction uls. 80HHC - In view 
of difference of opinion, matter referred to larger bench. 
Referring the matter to Larger Bench (in view of 
difference of opinion), the Court 
PER: ANIL R. DAVE, J.: 
F 
HELD: One can very well see from the provisions 
of Section 80-IA(9) that if an Assessee is engaged in 
infrastructure development as well as in the export 
business, he cannot claim deduction of his entire profits 
and gains under the provisions of Section 80HHC as well 
G as under Section 80-IA or/and Section 80-18 of the Act. 
H 
Section 80-IA(9) is quite unambiguous, which clearly 
provides that if an assessee claims any deduction under 
the provisions of Section 80-IA, then the assessee 
cannot claim deduction to the extent of such profits and 
1154 
ASSTT. COMMR OF l.T. BANGALORE v. M/S. MICRO 
1155 
LABS LTD. 
gains under heading 'C' of Chapter VIA of the Act, which, A 
in the present case, was claimed and wrongly allowed 
to the Assessee. The intention of the legislature is very 
clear to the effect that if an assessee claims any 
deduction under the provisions of Sections 80-IA or/and 
80-18, he cannot claim deduction to the extent to such B 
profits and gains which had been claimed and allowed 
under the provisions of Section 80HHC of the Act, 
because Section 80HHC is included in heading 'C' of 
Chapter VIA of the Act. The High Court was in error while 
permitting the assessee to get benefit in respect of C 
Section 80HHC as it did not take into account the fact 
that the profits in respect of which deduction was 
allowed under Section 80HHC had also been previously 
allowed under Section 80-18. This is. not permissible D 
under Section 80-18(13) read with Section 80-IA(9) 
because by virtue of Section 80-18(13) provisions of 
Section 80-IA(9) are also applicable to Section 80-18. 
[Paras 22, 23, 27, 28] [1168-A-C; 1169-C-F] 
PER DIPAK MISRA, J. (Dissenting): 
1. The deduction under sub-section (a) of Section 
80HHC(3) is computed by ascertaining eligible profits, 
which is the profits of business in the same proportion 
E 
as the export_ turnover in respect of such goods, bears F 
to the total turnover of business. A separate formula is 
prescribed under clause (b) of sub-section (3) to Section 
80HHC in case of a trader exporter and under clause (c) 
in respect of an assessee, who is both a manufacturer/ 
processor and a trader exporter. The Section is a detailed· G 
one and provides complete method and mechanism to 
" 
compute deduction under Section 80HHC. There is no 
dispute that sub-section (9) to Section 801 would be 
applicable as the assessee would be entitled to H 
1156 
SUPREME COURT REPORTS 
(2015] 11 S.C.R. 
A deduction under Section BOIA as well as under Section 
BOHHC. The second limb of Section 9 to Section BOIA 
has been enacted to prevent cascading effect of 
deductions under Section BOIA and BOHHC. There was 
already a cap or the upper limit stipulated in sub-section 
B (2) to Section BOIA that the deductions cannot exceed 
the gross total income of the assessee. However sub-
section 9 to Section BOIA stipulates that in no case 
deduction shall exceed profits and gains of such eligible 
business of undertaking and enterprise. ,The said 
C provision does not make a reference to the gross total 
income but it refers to the profit and gains of such eligible 
business of undertaking and enterprise. Thus read, it 
cannot be $aid that the last part of sub-section (9) to 
0 
Section BOIA would be rendered meaningless being a 
mere reproduction of sub-section (2) to Section BOA. The 
first part of sub-section (9) to Section BOIA refers to the 
computation of profits and gains of an undertaking or 
enterprise allowed under Section BOIA in any 
E assessment year and the amount so calculated shall not 
be allowed as a deduction under any other provisions 
of this Chapter. T
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