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October 2009

Export business — Deduction u/s.80HHC (prior to 1989) — Deduction only to the extent it is covered by the reserve created for the said reserve.

By Kishor Karia, Chartered Accountant
Atul Jasani, Advocate
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2. Export business — Deduction u/s.80HHC (prior to 1989) —
Deduction only to the extent it is covered by the reserve created for the said
reserve.

[Parekh Brothers v. CIT, (2009) 309 ITR 446 (SC)]

The Supreme Court dismissed the appeal from the decision of
the Kerala High Court to the effect that, where the reserve created for the
purpose of the special deduction u/s.80HHC of the Income-tax Act, 1961, is of
a lesser amount then deduction would be allowed only of the lesser sum
supported by the creation of the reserve.

 

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