JUDGMENT

S.N. Variava, J.

1. This Appeal is against a Judgment dated 2nd July, 2001 passed by the Bombay High Court.

2. Briefly stated the facts are as follows:

The Appellants are a Export House. They hold a certificate issued by the Chief Controller of Imports and Exports. For the Assessment Year 1996097 the Appellants filed a return of income declaring Nil income. It is an admitted position that the taxable income, before the deductions under Chapter VIA, was Rs. 4.39 crores. However, against this taxable income the Appellants claimed various deductions. One such deduction was under Section 80 HHC for Rs. 3.78 crores. During the assessment proceedings it was found that the Appellants were exporting goods which were self manufactured as well as goods manufactured by supporting manufacturers i.e. trading goods. It was found that the sum of Rs. 3.78 crores, which had been claimed as a deduction, was the profit from exports of self manufactured goods. It was found that from the exports of trading goods there was a loss of Rs. 6.86 crores. It was found that the Appellants had issued certificates of disclaimer in favour of the supporting manufacturers in respect of the entire export of tra