JUDGMENT Deepak Verma, J.— Heard Sri M.V. Seshachala, learned Counsel for the appellants. None appeared for the respondent even after service of the notice. 2. The Revenue is in appeal against the order passed by the Income Tax Appellate Tribunal in I.T.A. No. 79/Bang/1998 for the assessment year 1995-96 challenging the same under Section 260A of the Income Tax Act, 1961 (hereinafter shall be referred to in short as "the Act"), decided by the Tribunal on May 28, 2003. 3. Even though in the memo of appeal counsel for the appellants has projected two substantial questions of law, but after having heard him and after perusal of the records, we are of the considered opinion that only the following substantial question of law would arise for our consideration: 1. Whether the appellate authorities were correct in holding that no additional tax under Section 143(1A) of the Act can be levied on the assessee in rectification proceedings, which had not been made during the assessment year and that the prima facie adjustment and additional tax levied had been made in the original intimation itself? 4. The facts which lie in narrow compass are as under: The assessee is a company engaged in export business. For the assessment year 1995-96, the assessee filed a return of income on November 29, 1995. Before processing the return, the Assessing Officer under an intimation under Section 143(1)(a) of the Act found that the assessee had claimed deduction under Section 80HHC of the Act amounting to Rs. 1,14,39,206.00. Further, it was found by the Assessing Officer that the deduction under Section 80HHC of the Act was not admissible to the assessee as the gross total of income of the assessee was negative income. Based on the information available in the return and other materials available with it, the Assessing Officer proceeded to make prima facie adjustment and proceeded to levy additional tax on Rs. 1,50,54,808.00 which worked out to Rs. 18,85,043.00 vide his intimation dated December 5, 1995. The assessee being aggrieved against this order, preferred an appeal to the Commissioner of Income Tax (Appeals), Bangalore. The Appellate Commissioner cursorily considering the matter proceeded to hold that no additional tax is called for. Consequently, the appeal filed by the assessee came to be allowed by him. 18,85,043.00 vide his intimation dated December 5, 1995. The assessee being aggrieved against this order, preferred an appeal to the Commissioner of Income Tax (Appeals), Bangalore. The Appellate Commissioner cursorily considering the matter proceeded to hold that no additional tax is called for. Consequently, the appeal filed by the assessee came to be allowed by him. The Revenue feeling aggrieved by the said order passed by the Commissioner of Income Tax (Appeals) preferred an appeal before the Tribunal. The said appeal having met the fate of dismissal, this further appeal by the Revenue. 5. As mentioned hereinabove, despite notice, the assessee remained absent. Thus we have heard the learned Counsel for the appellant. Perused the records. 6. It has been brought to our notice that Sub-section (1A) of Section 143 of the Act was amended by the Finance Act, 1993, with effect from April 1, 1989, the date on which Sub-section (1A) had been introduced in Section 143 of the Act. The substituted Sub-section (1A) of Section 143 of the Act reads thus: 143.(1A)(a) Where as a result of the adjustments made under the first proviso to clause (a) of Sub-section (1),: (i) the income declared by any person in the return is increased; and (ii) the loss declared by such person in the return is reduced or is converted into income. the Assessing Officer shall,: (A) in a case where the increase in income under Sub-clause (i) of this clause has increased the total income of such person, further increase the amount of tax payable under Sub-section (1) by an additional Income Tax calculated at the rate of twenty per cent. on the difference between the tax on the total income so increased and the tax that would have been chargeable had such total income been reduced by the amount of adjustments and specify the additional Income Tax in the intimation to be sent under Sub-clause (i) of clause (a) of Sub-section (1). 7. It is not in dispute that the aforesaid provision was brought in the statute book retrospectively and the same provision would be applicable to the facts of the instant case. Subsequently, this whole provision has been substituted with effect from June 1, 1999. Since we are not concerned herein with the substitution provision in the instant case, we are not reproducing the same. 8. Subsequently, this whole provision has been substituted with effect from June 1, 1999. Since we are not concerned herein with the substitution provision in the instant case, we are not reproducing the same. 8. Similar question has cropped up for consideration before the Supreme Court in the case of Assistant Commissioner of Income Tax Vs. J.K. Synthetics Ltd., AIR 2001 SC 1531 , wherein, after considering the aforesaid provision of law, it is held as under (headnote): ....reversing the decision of the High Court, that the retrospectively substituted Sub-section (1A) made it clear that even where the loss declared by the assessee had been reduced by reason of adjustments made under Sub-section (1)(a) the provisions of Sub-section (1A) applied and the additional tax could be imposed. 9. Apart from the above, with regard to allowability of deduction claimed by the assessee under Section 80HHC of the Act, such question stood answered by two judgments of the Supreme Court in the case of IPCA Laboratory Ltd. Vs. Deputy Commissioner of Income Tax, Mumbai, (2004) 266 ITR 521 SC and in the case of A.M. Moosa v. CIT [2007] 294 ITR 1 (SC) The ratio of the aforesaid two cases is that the Word "profit" used in Section 80HHC(3)(c)(i) and (iii) of the Act means a positive profit. A plain reading of Sub-section (3)(c) shows that "profits from such exports" has to be profits from exports of self-manufactured goods plus profits of exports from trading goods. The profit is to be calculated in the manner laid down in Sub-section (3)(c)(i) and (ii). The opening 'words "profit derived from such exports" together with the word "and" clearly indicated that the profits have to be calculated by counting both the businesses. The deduction can be permitted only if there is positive profit in the exports of both self-manufactured goods as well as in trading goods. If there is loss in either of the two, 'then that loss could be taken into account for the purposes of computing the profit. The aforesaid judgments of the Supreme Court have settled the legal issue in favour of the Revenue and against the assessee. 10. In the light Of the aforesaid discussion, mentioned hereinabove, we have no hesitation that the appeal of the Revenue deserved to be allowed. Consequently, the question of law is answered in favour of the Revenue and against the assessee.