Income Tax Deduction u/s 80HHC Had to Be Given Without Reducing S. 80IB Deduction: Madras HC Follows SC Ruling

The Madras High Court, following a Supreme Court ruling, has held that the income tax deduction for exporters under Section 80HHC should be computed without first reducing the deduction already claimed under Section 80IB. These sections of the Income Tax Act provide profit-linked deductions for certain types of businesses. The tax department had argued that the 80HHC deduction should be calculated on the profits remaining after the 80IB deduction. However, the High Court, aligning with the precedent set by the apex court, ruled that both deductions are independent and should be calculated on the gross total income. This means that the assessee is entitled to claim both deductions in full, as per the eligibility criteria, without one impacting the base for the other. This is a significant pro-assessee ruling that maximizes the tax benefits for eligible businesses.