Judgment Smt. R.P. Sondur Baldota, J. These three appeals are filed by the revenue under Section 260A of the Income-Tax Act (hereinafter referred to as the Act"). The appeals are directed against " the order dtd. 28th September 2001 passed by Income-Tax Appellate Tribunal (hereinafter referred to as "the Tribunal") allowing the appeals by respondent no.1. Since all the three appeals raise common questions of law, they are being disposed off by a common order. 2. Five questions of law were raised by the revenue in these appeals. However, on 10th June 2002, the appeals were admitted only on two questions. Subsequently on applications filed by the revenue, this Court by the order dtd. 19th July 2005 has admitted one more question. The learned counsel for the respondent-assessee submitted that admitting the third question by order dtd. 19th July 2005 amounts to sitting in appeals over the order dtd. 10th June 2002. There is no merit in this contention because, order dtd. 10th June 2002 does not decide any issue on merits and if it is brought to the notice of the Court that an additional question needs to be admitted, then it is open to this Court to do so. Moreover, the assessee has not challenged the order dtd. 19th July 2005. Hence, the objection raised for entertaining the appeals cannot be entertained. 3. Thus, the substantial questions of law to be considered in these appeals are as follows:- i) Whether on the facts and circumstances of the case, depreciation has to be allowed to the assessee while working out deduction under Section 80 HHC and also while working out income under the head "Business" even if not claimed by the assessee in the return of income. ii) Whether in view of the disclaimer certificate issued, the assessee is entitled to add the losses on the export of trading goods of the supporting manufacturer in computing the deduction under Section 80HHC (1). iii) Whether losses on export of trading goods is to be added to the profits of the business to arrive at the adjusted profit of the business as given in the Explanation (b) to sub-section (3) of section 80HHC for computing deduction under Section 80HHC or such loss to be ignored. 4. iii) Whether losses on export of trading goods is to be added to the profits of the business to arrive at the adjusted profit of the business as given in the Explanation (b) to sub-section (3) of section 80HHC for computing deduction under Section 80HHC or such loss to be ignored. 4. The brief facts needed to be stated for appreciation of the above questions are that respondent no.1, the assessee is mainly engaged in extraction processing and export of iron ore. It also has other income by way of hotel division and other services. It had filed returns of income for the years 1994-1995, 1995-1996 and 1996-1997 along with audit reports under Section 44-AB of the Act and other documents. The returns were processed under Section 143(1)(a) of the Act. The department issued notices under Section 143(2) and 142(1) to the assessee, who had responded by furnishing the required details. 5. The assessee, while computing the total income, did not claim depreciation in respect of the assets used for the purpose of the assessee's business. The depreciation was also not claimed while claiming deduction under Section 80 HHC of the Act. Further the assessee had while computing profits under Section 80 HHC(3)(c) from export of goods, which included both, own processed ore and trading goods, added losses incurred in export of trading goods to the profit of the business to arrive at adjusted profit of the business. The addition of the losses was further made while computing total deduction under Section 88 HHC(1) to the extent of disclosure certificate issued to the supporting manufacturers. 6. The assessing officer by his order dtd. 17th March 1997 disallowed the depreciation in computing the gross total income of the assessee, but allowed the depreciation while computing deduction under Section 80HHC. He treated the profits of the trading goods derived by the assessee as "Nil" for the purpose of arriving at the adjusted profits of the business holding that the profits do not include losses. The profits from the trading goods were taken as "Nil", also for the purpose of computing deduction under Section 80HHC(3)(c) of the Act. He further disallowed the addition of losses in respect of disclosure certificates issued, holding that Section 80 HHC(1) applies only in case of profits. 7. Being aggrieved by the assessment order, the assessee preferred appeals before the Commissioner of Income-Tax (Appeals) (CIT(A) for short). He further disallowed the addition of losses in respect of disclosure certificates issued, holding that Section 80 HHC(1) applies only in case of profits. 7. Being aggrieved by the assessment order, the assessee preferred appeals before the Commissioner of Income-Tax (Appeals) (CIT(A) for short). The appeals were disposed off by the order dtd. 20th January 1998 allowing depreciation in computation of income as well as in computation of deduction under Section 80HHC. On the issue of computation of profits derived from exportation of goods and trading goods under Section 88HHC(3)(c) of the Act, the Assessing Officer was directed to reduce the loss from the traded goods worked out under Section 80HHC(3)(c)(ii) from the proportionate adjusted profits from manufactured goods as worked out under Section 80HHC(3)(c)(i) resulting in enhancement of the assessment. As regards the disclosure certificate issued by the assessee under the proviso to sub-section 1 to Section 80 HHC, the claim was rejected. 8. Being aggrieved by the order of C.I.T.(A), the assessee preferred appeals before the Tribunal, which came to be allowed by the order dtd. 28th September 2001. The Tribunal held that depreciation should not be deducted while computing total income as well as while computing 80 HHC deduction. It further held that loss on trading goods is to be added to the profits of business for the purpose of adjusted profits of the business. As regards issuance of disclaimer certificates, the Tribunal held that since the profits of trading goods includes losses, loss account of sale to the extent of disclaimer certificates issued is to be further added to the deduction under Section 80HHC(3)(c). This order of the tribunal is challenged by the revenue in the present appeals. 9. As regards issuance of disclaimer certificates, the Tribunal held that since the profits of trading goods includes losses, loss account of sale to the extent of disclaimer certificates issued is to be further added to the deduction under Section 80HHC(3)(c). This order of the tribunal is challenged by the revenue in the present appeals. 9. For the sake of convenience, Section 80HHC is reproduced below : "((1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of export out of India of any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of the extend of profits, referred to in sub-section (1B,) derived by the assessee from the export of such goods or merchandise: Provided that if the assessee, being a holder of an Export House Certificate or a Trading House Certificate (hereafter in this section referred to as an Export House or a Trading House, as the case may be,) issues a certificate referred to in clause (b) of subsection (4A), that in respect of the amount of the export turnover specified therein, the deduction under this sub-section is to be allowed to a supporting manufacturer, then the amount of deduction in the case of the assessee shall be reduced by such amount which bears to the (total profits derived by the assessee from the export of trading goods, the same proportion as the amount of export turnover specified in the said certificate bears to the total export turnover of the assessee in respect of such trading goods). (1A) Where the assessee, being a supporting manufacturer, has during the previous year, sold goods or merchandise to any Export House or Trading House in respect of which the Export House or Trading House has issued a certificate under the proviso to sub-section (1), there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee, (a deduction to the extent of profits, referred to in sub-section (I B),) derived by the assessee from the sale of goods or merchandise to the Export House or Trading House in respect of which the certificate has been issued by the Export House or Trading House.) (1B) For the purpose of sub-sections (1) and (1A), the extent of deduction of the profits shall be an amount equal to- (i) eighty per cent, thereof for an assessment year beginning on the 1st day of April 2001; (ii) seventy per cent, thereof for an assessment year beginning on the 1st day of April 2002; (iii) fifty per cent, thereof for an assessment year beginning on the 1st day of April 2003; (iv) thirty per cent, thereof for an assessment year beginning on the 1st day of April 2004; and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year.) (2)(a) This section applies to all goods or merchandise, other than those specified in clause (b), if the sale proceeds of such goods or merchandise exported out of India are (received in, or brought into India) by the assessee ((other than the supporting manufacturer)) in convertible foreign exchange (within a period of six months from the end of the previous year or, (within such further period as the competent authority may allow in this behalf). (Explanation.-For the purposes of this clause, the expression "competent authority" means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.) (b) This section does not apply to the following goods or merchandise, namely :- (i) mineral oil; and (ii) minerals and ores ((other than processed minerals and ores specified in the Twelfth Schedule)). (Explanation 1 : The sale proceeds referred to in clause (a) shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India). (Explanation 2 :-For the removal of doubts, it is hereby declared that where any goods or merchandise are transferred by an assessee to a branch, office, warehouse or any other establishment of the assessee situate outside India and such goods or merchandise are sold from such branch, office, warehouse or establishment, then, such transfer shall be deemed to be export out of India of such goods and merchandise and the value of such goods or merchandise declared in the shipping bill or bill of export as referred to in sub-section (1) of section 50 of the Customs Act, 1962 (52 of 1962), shall, for the purposes of this section, be deemed to be the sale proceeds thereof). ((3) For the purposes of sub-section-(1), (a) Where the export out of India is of goods or merchandise (manufactured or processed by the assessee,) the profits derived from such export shall be the amount which bears to the profits of the business, the same proportion as the export turnover in respect of such goods bears to the total turnover of the business carried on by the assessee; (b) Where the export out of India is of trading goods, the profits derived from such export shall be the export turnover in respect of such trading goods as reduced by the direct costs and indirect costs attributable to such export; (c) Where the export out of India is of goods or merchandise (manufactured or processed by the assessee,) and of trading goods, the profits derived from such export shall, - (i) in respect of the goods or merchandise (manufactured or processed by the assessee,) be the amount which bears to the adjusted profits of the business, the same proportion as the adjusted export turnover in respect of such goods bears to the adjusted total turnover of the business carried on by the assessee; and (ii) In respect of trading goods, be the export turnover in respect of such trading goods as reduced by the direct and indirect costs attributable to export of such trading goods : Provided that the profits computed under clause (a) or clause (b) or clause (c) of this sub-section shall be further increased by the amount which bears to ninety per cent of any sum referred to in clause (iiia) (not being profits on sale of a license acquired from any other person), and clauses (iiib) and (iiic), of section 28, the same proportion as the export turnover bears to the total turnover of business carried on by the assessee: (Provided further that in the case of an assessee having export turnover not exceeding rupees ten crores during the previous year, the profits computed under clause (a) or clause (b) or clause (c) of this subsection or after giving effect to the first proviso, as the case may be, shall be further increased by the amount which bears to ninety per cent, of any sum referred to in clause (iiid) or clause (iiie), as the case may be, of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee: Provided also that in the case of an assessee having export turnover exceeding rupees ten crores during the previous year, the profits computed under clause (a) or clause (b) or clause (c) of this subsection or after giving effect to the first proviso, as the case may be, shall be further increased by the amount which bears to ninety per cent, of any sum referred to in clause (iiid) of Section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee, if the assess has necessary and sufficient evidence to prove that,- (a) he had an option to choose either the duty drawback or the Duty Entitlement Pass Book Scheme, being the Duty Remission Scheme; and (b) the rate of drawback credit attributable to the customs duty was higher than the rate of credit allowable under the Duty Entitlement Pass Book Scheme, being the Duty Remission Scheme: Provided also that in the case of an assessee having export turnover exceeding rupees ten crores during the previous year, the profits computed under clause (a) or clause (b) or clause (c) of this subsection or after giving effect to the first proviso, as the case may be, shall be further increased by the amount which bears to ninety per cent, of any sum referred to in clause (iiie) of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee, if the assessee has necessary and sufficient evidence to prove that, (a) he had an option to choose either the duty drawback or the Duty Free Replenishment Certificate, being the Duty Remission Scheme; and (b) the rate of drawback credit attributable to the customs duty was higher than the rate of credit allowable under the Duty Free Replenishment Certificate, being the Duty Remission Scheme. Explanation.-For the purposes of this clause, rate of credit allowable" means " the rate of credit allowable under the Duty Free Replenishment Certificate, being the Duty Remission Scheme calculated in the manner as may be notified by the Central Government:) (Provided also that in "case the computation under clause (a) or clause (b) or clause (c) of this sub-section is a loss, such loss shall be set off against the amount which bears to ninety per cent. of- (a) any sum referred to in clause (iiia) or clause (iiib) or clause (iiic), as the case may be, or (b) any sum referred to in clause (iiid) or clause (iiie), as the case may be, of section 28, as applicable in the case of an assessee referred to in the second or the third or the fourth proviso, as the case may be, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee.") Explanation : For the purposes of this sub-section, (a) "Adjusted export turnover" means the export turnover as reduced by the export turnover in respect of trading goods; (b) "Adjusted profits of the business" means the profits of the business as reduced by the profits derived from the business of export out of India of trading goods as computed in the manner provided in clause (b) of sub-section (3); (c) "Adjusted total turnover" means the total turnover of the business as reduced by the export turnover in respect of trading goods; (d) "Direct costs" means costs directly attributable to the trading goods exported out of India including the purchase price of such goods; (e) "Indirect costs" means costs, not being direct costs, allocated in the ratio of the export turnover in respect of trading goods to the total turnover; (f) "Trading goods" means goods which are not manufactured or processed by the assessee. (3A) For the purposes of sub-section (1A), profits derived by a supporting manufacturer from the sale of goods or merchandise shall be, (a) In a case where the business carried on by the supporting manufacturer consists exclusively of sale of goods or merchandise to one or more Export Houses or Trading Houses, the profits of the business; (b) In a case where the business carried on by the supporting manufacturer does not consist exclusively of sale of goods or merchandise to one or more Export Houses or Trading Houses, the amount which bears to the profits of the business the same proportion as the turnover in respect of sale to the respective Export House or Trading House bears to the total turnover of the business carried on by the assessee. (4) The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed (in accordance with the provisions of this section. (4A) The deduction under sub-section (1A) shall not be admissible unless the supporting manufacturer furnishes in the prescribed form along with his return of income, (a) The report 1076 of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed on the basis of the profits of the supporting manufacturer in respect of his sale of goods or merchandise to the Export House or Trading House; and (b) A certificate 1078 from the Export House or Trading House containing such particulars as may be prescribed and verified in the manner prescribed that in respect of the export turnover mentioned in the certificate, the Export House or Trading House has not claimed the deduction under this section : Provided that the certificate specified in clause (b) shall be duly certified by the auditor auditing the accounts of the Export House or Trading House under the provisions of this Act or under any other law. (4B) For the purpose of computing the total income under sub-section (1) or sub-section (1A), any income not charged to tax under this Act shall be excluded. (4B) For the purpose of computing the total income under sub-section (1) or sub-section (1A), any income not charged to tax under this Act shall be excluded. Explanation : For the purposes of this section, - (a) "Convertible foreign exchange" means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder; (aa) "Export out of India" shall not include any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situate in India, not involving clearance at any customs station as defined in the Customs Act, 1962 (52 of 1962); (b) "Export turnover" means the sale proceeds received in, or brought into, India by the assessee in convertible foreign exchange in accordance with clause (a) of sub-section (2) of any goods or merchandise to which this section applies and which are exported out of India, but does not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962); (ba) "Total turnover" shall not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962) : Provided that in relation to any assessment year commencing on or after the 1st day of April, 1991, the expression "total turnover" shall have effect as if it also excluded any sum referred to in clauses (iiia), (iiib) and (iiic) of section 28; (baa) "Profits of the business" means the profits of the business as computed under the head "Profits and gains of business or profession" as reduced by - (1) Ninety per cent of any sum referred to in clauses (iiia), (iiib) and (iiic) of section 28 or of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits; and (2) The profits of any branch, office, warehouse or any other establishment of the assessee situate outside India;" Question No.(i) : 10. The disclaimer by the assessee of depreciation in respect of the assets used for the purpose of its business, while computing the total income was accepted by the Assessing Officer in view of the decision of this court in C.I.T. Vs. Someshwar Sahakari Sakhar Karkhana, reported in 177 I.T.R. Page 443 and the earlier decisions of C.I.T. (A), that the depreciation could not be thrust upon the assessee. In the case of Someshwar Karkhana, our High Court has held that allowance of a deduction for depreciation is subject to two pre-conditions. First is that the assessee should have asked for it and the second is that the particulars therefor should have been furnished. In the absence of fulfillment of either of the conditions, the deduction cannot be allowed by the assessing officer. Since in the instant case, the assessee had not claimed for deduction of the depreciation, the Assessing Officer could not have allowed it on his own. However, when it came to computing deduction under Section 80HHC, the assessing officer concluded that depreciation had to be taken into account for the purpose of computing the deduction in view of the decision of this court in C.I.T. vs. Gannon Dunkerley & Company Limited, reported in 216 I.T.R. Page 708. When this decision of Assessing Officer was carried in appeal, the appellate authority CIT (A), instead of deciding the question took a strange course of action of taking up the alternate argument of the assessee and granting it. This was corrected by the Tribunal by relying on decision of Supreme Court in the case of C.I.T. vs. Mahendra Mills Limited, reported in 243 I.T.R. Page 56, in which the decision of this court in Someshwar Karkhana is upheld. The Apex Court has observed therein that "a thing is allowed when it is claimed". And further that a privilege cannot be to a disadvantage and an option cannot become an obligation. The Tribunal held that the depreciation not claimed by the assessee either for the purposes of deduction under Section 80HHC or for purposes of computation of total income of the assessee should not be thrust upon the assessee. 11. Ms. And further that a privilege cannot be to a disadvantage and an option cannot become an obligation. The Tribunal held that the depreciation not claimed by the assessee either for the purposes of deduction under Section 80HHC or for purposes of computation of total income of the assessee should not be thrust upon the assessee. 11. Ms. Asha Desai, the learned counsel for the revenue submits that the issue of depreciation under Chapter VIA is no more res-integra, it having been considered and decided by the Full Bench of our Court in Plastiblends India Limited vs. Additional Commissioner of Income-Tax and others, reported in (2009) 318 I.T.R. 352 (Bom) (FB). She submits that further the question under consideration has been specifically dealt with in another decision of this court in India Rayon Corporation Limited vs. C.I.T., reported in (2003) 261 I.T.R. Page 98. It has been held therein that if the assessee claimed relief under Chapter VI-A of the Act, then it is not open to the assessee to disclaim depreciation allowance. The third decision relied upon by Ms. Asha Desai is of the Delhi High Court in Dabur India Limited vs. C.I.T., reported in (2008) 219 C.T.R. Page 0152 (Delhi). In this case, she submits that the Delhi High Court has considered issue of claiming depreciation vis-a-vis Section 80HHC of the Act and held that the judgment of Mahendra Mill's case has no application. Mr. Pardiwala, the learned Senior Counsel appearing for the assessee, on the other hand seeks to justify the view of the Tribunal distinguishing the decisions relied upon by the revenue. On his part, Mr. Pardiwala, along with the decisions in Someshwar Karkhana and Mahendra Mills, relies upon decision of the Apex Court in C.I.T. vs. Williamson Financial Services and others, reported in (2008) 297 I.T.R. (S.C.). 12. The earliest decision relied upon by Ms. Asha Desai is the decision in Indian Rayon's case. The reference in that case concerned the assessment year 1976-1977. The assessee had deducted development rebate from profits as per the profits and loss account to arrive at an amount for claiming relief under Section 80 HH. This computation of the assessee was rejected by the Assessing Officer, who deducted depreciation also from the profits. The contention of the assessee was further rejected by both, the first appellate authority as well as the Tribunal. This computation of the assessee was rejected by the Assessing Officer, who deducted depreciation also from the profits. The contention of the assessee was further rejected by both, the first appellate authority as well as the Tribunal. The Tribunal took the view that the Assessing Officer was justified in deducting depreciation and development rebate while computing the total income for the purposes of Section 80HH. Being aggrieved, the assessee approached this Court by way of reference. Our High Court after referring to the scheme of the Act held as follows. "The conspectus of the above sections show that income-tax is a charge on an assessee in respect of his total income computed in accordance with the provisions of the Act. However, in cases where the total taxable income comprises profits derived from newly established undertaking under Section 80HH, then such profits have got to be computed separately as laid down by the Supreme Court in the case of Cambay Electric Supply Co. (1978) 113 I.T.R. 84 as if it concerns a separate assessee. While calculating such profits, we must bear in mind sections 29 to 43A of the act. Hence, depreciation has got to be set off as an expense against gross income of the newly established undertaking in order to arrive at profits and gains of newly established undertaking. Hence, the net profits as per the profit and loss account of newly established undertaking would be computed, after taking depreciation into account and 20 per cent of such net profit would be deductible from the gross total income of the assessee to arrive at the total income of the assessee. It needs to be clarified that in this case, we are concerned with computation of total income of an assessee who seeks relief under Section 80HH. In this case the assessee has claimed depreciation allowance." "It is important to note that in cases of computation of normal income, without seeking benefit of special deduction under Chapter VI-A, an assessee is free not to claim depreciation in view of the judgment of the Supreme Court in the case of CIT v. Mahendra Mills (2000) 243 ITR 56, but if the assessee claims depreciation, then such depreciation will be set off as any other expenses against gross income. Further, if such an assessee claims deduction under Chapter VI-A, then to calculate profits and gains of newly established undertaking, depreciation allowance has got to be set off against the gross income of newly established undertaking to arrive at the profits computed in accordance with the provisions of the Act, which profits would form part of the gross total income and which would be exigible to 20 per cent deduction. The reason is that Chapter VI-A deals with special types of income. The deduction of 20 per cent is not to be equated with deprecation, which is an ordinary expense. The idea under the above formula is that the assessee should not claim more than what he is entitled to. Take the case of section 80HHC under which deduction is given in commensuration with the foreign exchange, which the assessee brings in. Therefore, if an assessee claims deduction under section 80HHC, depreciation has got to be set off against the gross income. Our view is supported by the judgment of the Supreme Court in the case of Cambay Electric Supply Industrial Co. Ltd. v. CIT (1978) 113 ITR 84." After stating the above position in law arising from scheme of the Act, our Court considered the rival arguments advanced before it. One of the arguments advanced, on behalf of the assessee, was based on the decision in Mahendra Mills case. The argument of reading Section 80HH of the Act in the light of Mahendra Mill's case was rejected by the Court by holding that Mahendra Mill's case considered only whether while computing profits and gains of the business, the assessee was free to disclaim depreciation allowance. It was not concerning deductions under Chapter VI-A of the Act. The Supreme Court was required to consider only Sections 28, 29, 32 and 34 of the Act, with the circulars issued by the Central Board of Direct Taxes that the Assessing Officer cannot grant depreciation allowance when the same is not claimed by the assessee. The Court observed that there is a distinct dichotomy between cases of computation of normal income under the Act de hors Chapter VI-A and computation of taxable income where the assessee claims the benefit of deduction under Chapter VI-A because the legislature has intended that these special deductions should be restricted to the profits derived from a newly established undertaking. The Court finally concluded as follows. The Court finally concluded as follows. "The question basically in this matter is concerning computation of deduction under Chapter VI-A in which section 80HH falls. Profits and gains of a newly established undertaking, therefore, have got to be computed as per the provisions of section 29 to section 43A and if the assessee claims relief under Chapter VI-A of the Act, then it is not open to the assessee to disclaim depreciation allowance. This is because Chapter VI-A is an independent code by itself for computing these special types of deductions. In other words, one must first calculate the gross total income from which one must deduct a percentage of incomes contemplated by Chapter VI-A. That such special incomes were required to be computed as per the provisions of the Act, viz., section 29 to section 43A, which included section 32(2). Therefore, one cannot exclude depreciation allowance while computing profits derived from a newly established undertaking for computing deductions under Chapter VI-A. Therefore, the appellant's claim for allowance of deduction under section 80HH, without taking into consideration the current depreciation will have to be rejected." 13. According to Mr. Pardiwala, Indian Rayon's case has no application to the present issue, since in that case the assessee had not disclaimed depreciation but was merely agitating the point about stage at which deduction for depreciation was to be allowed. He concedes that there are observations in the judgment that if an assessee claims deduction under Chapter VI-A of the Act then it has no option not to claim depreciation but submits that those observations, have to be confined, if they have any precedential value, to a case for claim of deduction under Section 80HH is made. 14. We are not inclined to accept the distinction sought to be drawn by Mr. Pardiwala since the decision is seen to consider the situation of disclaimer also. Besides Section 80HH and Section 80HHC are part of the same Chapter VI-A of the Act. Indian Rayons case has in terms held that if the assessee claims relief under Chapter VI-A of the Act, then it is not open to the assessee to disclaim depreciation allowance. 15. Ms. Asha Desai next places heavy reliance upon the decision of the Full Bench of this Court in Plastiblends case (supra). Indian Rayons case has in terms held that if the assessee claims relief under Chapter VI-A of the Act, then it is not open to the assessee to disclaim depreciation allowance. 15. Ms. Asha Desai next places heavy reliance upon the decision of the Full Bench of this Court in Plastiblends case (supra). The facts in Plastiblends case were that in the assessment year in question, the assessee had filed its return of income without claiming depreciation. It had added back depreciation (as per books) to the net business profit, because the net business profit under the profit and loss account was arrived at after deducting depreciation (as per books). Thus, in the return of income, the assessee computed total income under Chapter IV without claiming depreciation. After making deduction and additions as per claims that are allowable and disallowable under the Act, the assessee determined the gross total income, on which 100% deduction was claimed under Section 80-IA of the Act. The assessment had been reopened by the Assessing Officer on the ground that 100% deduction under Section 80-IA of the Act was liable to be determined on the gross total income computed after deducting all the deductions allowable under Section 30 to 43D of the Act including current depreciation allowable under Section 32 of the Act. The assessee in its reply contended that it had an option to claim or not to claim current depreciation. Since the assessee had opted not to claim current depreciation, it could not be thrust upon the assessee when not claimed. When the issue travelled to this court after the decision of the Tribunal, it was found that there was conflict in the view taken by two Division Benches of this court in the cases of Scoop Industries (P) Limited, reported in (2007) 289 I.T.R. 195 and Grasim Industries Limited, reported in (2000) 245 I.T.R. 677. Therefore, the appeal was placed before the Full Bench for resolving the controversy. The question of law referred to the Full Bench was "Whether, in the facts and circumstances of the case, for the purposes of availing of allowable special deduction under Chapter VI-A of the Income-Tax Act, the gross total income is required to be computed by deducting allowable depreciation, even though the assessee had disclaimed the same for the purposes of regular assessment?" 16. Ms. Ms. Asha Desai submits that though the judgment dealt with specific case under Section 80IA of the Act, the reference to the full bench was for resolving the issue regarding depreciation as allowable under Chapter VIA of the Act. She draws our attention to the conclusion arrived at by the full bench in following words: "In the result, we answer the question referred to us set out at para 1 above in the affirmative, that is, for the purposes of deduction under Chapter VI, in affirmative, that is, for the purpose of deduction under Chapter VIA, the gross total income has to be computed, inter alia, by deducting the deductions allowable under section 330 to 43D of the Act, including depreciation allowable under Section 32 of the Act, even though the assessee has computed the total income under Chapter IV by disclaiming the current depreciation." 17. Mr. Pardiwala, in reply, submits that the decision of the Full Bench in Plastiblends case, may, at the first blush, appear to control the issue against the assessee but a closer look will confirm that it is not applicable to the facts of the present case. In Plastiblend's case, the full bench was considering a claim for deduction under Section 80IA of the Act and not under Section 80HHC. He submits that though the Full Bench had started with the consideration of a larger question, what was actually decided was a narrower question. In order to substantiate the argument, he draws our attention to the question of law referred to the Full Bench which has been reproduced above. He then refers to paragraphs 14 and 24 of the judgment where the dispute is said to be narrowed down. The same read as follows: "14. The basic controversy, therefore, is whether the assessee had an option not to claim current depreciation and if so, whether the same would have any bearing in computing the deduction allowable under Section 80I-A of the Act?" "24. In the present case, the dispute relates to the special deduction allowable under section 80I-A contained in Chapter VIA". We have carefully gone through the text of the decision in Plastiblends and find that the question referred to the Full Bench was not narrowed down. In the present case, the dispute relates to the special deduction allowable under section 80I-A contained in Chapter VIA". We have carefully gone through the text of the decision in Plastiblends and find that the question referred to the Full Bench was not narrowed down. References by the Full Bench to the specific dispute involved in the appeal will not amount to narrowing down the issue referred to at paragraph 1 of the judgment. This gets confirmed by the concluding paragraph of the judgment which has been quoted above. 18. Mr. Pardiwala next points out that the difference between Section 80I-A and Section 80HHC of the Act is that Section 80I-A does not specifically define how the profits derived from industrial undertaking are to be computed unlike Section 80HHC which statutorily defines the same. He submits that the very language of Section 80HHC(3) read with clause (baa) to the explanation to the section forces one to go back to Chapter IV for computation unlike other sections. On so going back, according to him, the decision in Mahendra Mill's case will become applicable giving an option to the assessee as regards depreciation. 19. A similar argument had been advanced before the Full Bench by the Counsel for the assessee. It was submitted that in the assessment year in question, the assessee had an option to claim or not to claim the current depreciation allowable under Section 32 of the Act and the assessee had chosen not to claim current depreciation. In such a case, it was contended that the income chargeable to tax had to be computed without allowing current depreciation and, therefore, the Assessing Officer was not justified in thrusting current depreciation on the assessee while computing the income chargeable to tax. The assessee had strongly relied upon the decision in Mahendra Mills case in support of his argument. The submission was that, once the total income under Chapter IV is computed in accordance with the provisions contained in Sections 32 to 43D without deducting the allowable current depreciation, then the gross total income for the purpose of deduction under Chapter VI-A would also have to be computed without deducting current depreciation. The submission was that, once the total income under Chapter IV is computed in accordance with the provisions contained in Sections 32 to 43D without deducting the allowable current depreciation, then the gross total income for the purpose of deduction under Chapter VI-A would also have to be computed without deducting current depreciation. In other words, where the assesee chooses not to claim current depreciation, then the total income under Chapter IV, as well as, the total gross income under Chapter VI-A, will have to be computed without deducting from the business profits the current depreciation allowable under the Act. The Full Bench did not find any merit in the contention. It found that the decision in Mahendra Mills case was rendered in the context of determining total income of an industrial undertaking under Chapter IV of the Act and not in the context of determining deduction under Chapter VI-A of the Act. Secondly, it was held in Mahendra Mills case that when there are two provisions under which an assessee can claim benefit, it is for the assessee to choose one and that the consequence of the assessee not claiming depreciation in the current year would be that, the written down value would remain the same in the following year. Thirdly, the Full Bench noted that the Apex Court in Mahendra Mills case had not laid down any proposition of law that by disclaiming depreciation, the assessee can claim enhanced deduction allowable under any other provision of the Act. These observations of the Full Bench would be applicable with equal force to the facts of the present case also. 20. Mr. Pardiwala, seeks to draw support from Williamson's case. He submits that in that case, the Supreme Court was concerned with a claim for deduction under Section 80HHC by a company that was engaged in the business of growing and manufacturing tea. The company claimed that out of its total profits from the manufacture and sale of tea, deduction under Section 80HHC should be first allowed and Rule 8 which prescribes that 40% of the composite income from the sale of tea grown and manufactured liable to tax under the Act is to be applied to the resultant figure. The company claimed that out of its total profits from the manufacture and sale of tea, deduction under Section 80HHC should be first allowed and Rule 8 which prescribes that 40% of the composite income from the sale of tea grown and manufactured liable to tax under the Act is to be applied to the resultant figure. The revenue had claimed that one has to first apply Rule 8, determine the income chargeable under the head Profits and gains " of business or profession" after applying that Rule, and thereafter allow deduction under Section 80HHC. The Supreme Court had upheld the contention of the revenue. Mr. Pardiwala, therefore submits that one has to first compute the income chargeable under the head "Profits and gains of business or profession" and thereafter arrive at the deduction under Section 80HHC by having regard to the figure so determined. We fail to see how this decision takes the case of the assessee any further. The revenue has undoubtedly first computed the income chargeable under the head "Profits and gains of business or profession" and thereafter arrived at deduction under Section 80HHC by having regard to the figure so determined. 21. The third decision cited by Ms. Asha Desai is of Delhi High Court in Dabur's case (supra). This decision follows the suit in Indian Rayon's case. Its facts are identical to the facts of the present case, inasmuch as, they relate to deductions under Section 80HHC of the Act. The Delhi High Court has held that it is important to bear in mind the scheme of the Act which envisages that while computing normal profits which does not involve relief by way of special deduction provided for under Chapter VI-A of the Act, the assessee is entitled to opt out of an claim for depreciation allowance. Under Chapter VI34 A of the Act, there is no option available to the assessee, but to provide for depreciation allowance while calculating eligible profits and gains on which deduction is permissible under the provisions specified in Chapter VI-A. Delhi High Court, then proceeded to distinguish the decision of the Apex Court in Mahendra Mills case, in the same way as done in the earlier two decisions. Mr. Mr. Pardiwala, submits that though Dabur's case deals with a claim for deduction under Section 80HHC, unfortunately, the attention of the Delhi High Court was not invited to the specific language used in subsection 3 read with Clause (baa) which mandates that one must compute the income chargeable under the head "Profits or gains of business or profession". This argument has already been dealt with earlier and rejected. 22. The decision of Full Bench of this Court in Plastiblend's case, that for the purposes of deduction under Chapter VIA, the gross total income has to be computed, inter-alia, by deducting the deductions allowable under Sections 32 to 43D of the Act, including depreciation allowable under Section 32 of the Act even though the assessee has computed the total income under Chapter IV by disclaiming the current depreciation, is binding on this Court. Besides, we are also in complete agreement with the position of law stated therein. Therefore, we accept the argument of Ms. Asha Desai that the first question is no more res-integra and we hold that depreciation has to be allowed to the assessee while working out deductions under Section 80HHC and also while working out income under the head "business" even if not claimed by the assessee in the return of the income. Question (i) is accordingly answered in favour of the revenue. Questions No.(ii) and (iii) : 23. These questions are two facets of one question namely, where the profits of trading goods determined under Section 80HHC(3)(c)(ii) after deducting direct and indirect cost of trading goods from the export turnover of trading goods is a loss, then, whether such loss has to be ignored while computing deduction under Section 80HHC(1) of the Act? 24. It is not in dispute that deduction under Section 80HHC(1) has to be computed as per the mechanism provided under Section 80HHC(3). In the present case, since the assessee is engaged in the export of both traded goods as also manufactured goods, the mechanism provided under Clause (c) of Section 80HHC(3) would apply. Section 80HHC(3)(c) provides that where a composite profit reflected in the profit and loss account, one must determine the profits that are attributable to the export of traded goods and then determine the profits that are attributable to the export of manufactured goods. 25. Section 80HHC(3)(c) provides that where a composite profit reflected in the profit and loss account, one must determine the profits that are attributable to the export of traded goods and then determine the profits that are attributable to the export of manufactured goods. 25. The profits from the export of traded goods as per Section 80HHC(3)(c)(ii) are required to be determined by reducing from the export turnover of traded goods, the direct and indirect costs. 26. In the present case, the export turnover of trading goods is Rs.41,50,59,635/-and direct/indirect costs are Rs. 35,81,34,588/-and Rs.11,14,89,257/-respectively. If the export turnover of trading goods amounting to Rs.41,50,59,635/-is reduced by the direct and indirect costs amounting to Rs. 46,96,23,845/-(Rs.35,81,34,588/+ Rs. 11,14,89,257/-), the result would be loss of Rs. 5,45,64,210/-. As per Section 80HHC(3) (c)(ii), the amount so determined i.e. Rs. 5,45,64,210/-is liable to be treated as profits derived from export of trading goods. 27. The next step is to determine the profits arising from the export of manufactured goods as per the formula set out in Section 80HHC(3)(c)(i) of the Act. The formula in Section 80HHC(3)(c)(ii) requires determination of adjusted profits of the business. Explanation (b) below Section 80HHC(3)(c) defines the expression 'adjusted profits of the business' to mean the profits of the business as reduced by the profits derived from the business of export out of India of trading goods as computed in the manner provided in Section 80HHC(3)(b). The expression 'as reduced by' in explanation (b) below Section 80HHC(3)(c) makes it clear that from the composite profits of the business, one has to deduct the profits from the trading activity so as to determine the profits from the manufacturing activity. If the trading activity results in a loss, which as per Section 80HHC(3)(c) is liable to be treated as profit derived from trading activity, it has to be added to the composite profits to determine the profit from the export of manufactured goods. 28. According to the revenue, in the light of the decision of the Apex Court in the case of IPCA Laboratory Limited vs. Deputy Commissioner of Income-Tax, reported in (2004) Income Tax Reports, page 521, the loss on account of trading goods has to be ignored and cannot be taken into consideration in determining the adjusted profits of business. 28. According to the revenue, in the light of the decision of the Apex Court in the case of IPCA Laboratory Limited vs. Deputy Commissioner of Income-Tax, reported in (2004) Income Tax Reports, page 521, the loss on account of trading goods has to be ignored and cannot be taken into consideration in determining the adjusted profits of business. The decision of the Apex Court in the case of IPCA Laboratory Ltd. (supra) has no relevance in the present case, because in that case, the assessee had profits arising from the export of manufactured goods and loss from export of trading goods and the assessee chose to ignore the loss and claimed a deduction only in respect of profits. The Apex Court held that the loss has to be adjusted and cannot be ignored. Therefore, the decision of the Apex Court in the case of IPCA Laboratory Ltd. (supra) does not support the case of revenue. 29. Similarly the decision of the Apex Court in the case of A.M. Moosa Vs. C.I.T. is distinguishable on facts. In fact, the Apex Court in that case has held that the adjusted profit of the business means the profit as reduced by the profit derived from business of exports of trading goods. Thus, the finding of the Tribunal that in calculating the profits under Section 80HHC(3)(c)(i), one has to necessarily reduce the profits determined under Section 80HHC(3)(c)(ii) and if there is loss, then, those losses in export of trading goods have to be adjusted cannot be faulted. The same analogy would apply where the assessee has issued a certificate to a supporting manufacturer. In the result, questions (ii) and (iii) would have to be answered in favour of the assessee and against the revenue. 30. In view of the above, the appeals are partly allowed.