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June 2008

Export — Deduction u/s.80HHC — Amendment made by the Finance (No. 2) Act, 1991, in S. 80HHC of the Income-tax Act, 1961, with effect from April 1, 1992, to the effect that for the purpose of the special deduction thereunder business profits will not inclu

By Kishor Karia, Chartered Accountant
Atul Jasani, Advocate
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9 Export — Deduction u/s.80HHC — Amendment
made by the Finance (No. 2) Act, 1991, in S. 80HHC of the Income-tax Act, 1961,
with effect from April 1, 1992, to the effect that for the purpose of the
special deduction thereunder business profits will not include receipts by way
of brokerage, commission, interest, service charges, etc., is only prospective
in nature.


[K. K. Doshi & Co. v. CIT, (2008) 297 ITR 38 (SC)]

The Bombay High Court in CIT v. K. K. Doshi & Co.,
(2000) 245 ITR 849 (Bom.) had held that amendment in law from the A.Y. 1992-93
that the business profits would not include receipts by way of brokerage,
commission, interest, rent charges or any other receipt of a similar nature was
clarificatory in nature and therefore retrospective in operation. On an appeal,
the Supreme Court following its decision in P. R. Prabhakar (2006) 284 ITR 548
(SC) held that the amendment in question was prospective in nature.

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