ORDER 1. HEARD THE LEARNED COUNSEL FOR THE PARTIES. 2. DELAY CONDONED. 3. LEAVE GRANTED. 4. THE ONLY QUESTION BEFORE THE HIGH COURT WAS WHETHER THE LOSS SUFFERED IN THE EXPORT OF TRADING GOODS CAN BE ADJUSTED AGAINST THE PROFIT (POSITIVE FIGURE) OBTAINED FROM THE EXPORT OF OWNED GOODS (MANUFACTURED GOODS). THE HIGH COURT, RELYING UPON ITS EARLIER, DECISION IN THE CASE OF CIT V. T.C. USHA1 ANSWERED THE QUESTION IN THE NEGATIVE I.E. IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. AGGRIEVED BY THE SAID ORDER, THE REVENUE IS IN APPEAL. 5. THIS COURT, IN IPCA LABORATORY LTD. V. CIT2 HAS REVERSED THE VIEW TAKEN BY THE HIGH COURT-IN THE CASE OF T.C. USHA1 AND HAS HELD THAT A PLAIN READING OF SECTION 80-HHCMAKES IT CLEAR THAT IN ARRIVING AT PROFITS EARNED FROM EXPORT OF BOTH SELF-MANUFACTURED GOODS AND TRADING GOODS, THE PROFITS AND LOSSES ON BOTH THE TRADES HAVE TO BE TAKEN INTO CONSIDERATION. IF AFTER SUCH ADJUSTMENTS, THERE, IS A POSITIVE PROFIT THE ASSESSEE WOULD BE ENTITLED TO DEDUCTION UNDER SECTION, 80-HHC(1). IF THERE IS A LOSS, HE WILL NOT BE ENTITLED TO ANY DEDUCTION. IN THIS VIEW, WE SET ASIDE THE IMPUGNED JUDGMENT ALLOW THE APPEAL AND ANSWER THE QUESTION IN. THE AFFIRMATIVE I.E. IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. 6. NO COSTS.