JUDGMENT :

R.K. Agrawal, J.

1. Leave granted.

2. The above batch of appeals is related to the interpretation of the provisions contained in Section 80HHC of the Income Tax Act, 1961 (in short ‘the IT Act’).

3. SLP (C) 8368 of 2009

(a) M/s. Carpet India (P) Ltd.-the assessee is a partnership firm deriving income from the manufacturing and sale of carpets to M/s. IKEA Trading (India) Ltd. (Export House) as supporting manufacturer.

(b) The assessee filed a ‘Nil’ return for the Assessment Year (AY) 2001-2002 on 30.10.2001, inter alia, stating the total sales amounting to Rs. 6,49,83,432/- with total export incentives of Rs. 68,82,801/- as Duty Draw Back (DDB) and claimed deduction under Section 80HHC amounting to Rs. 1,57,68,742/- out of the total profits of Rs. 1,97,10,927/- at par with the direct exporter.

(c) On scrutiny, the Assessing Officer, vide order dated 25.02.2004, allowed the deduction under Section 80HHC to the tune of Rs. 1,08,96,505/- instead of Rs.1,57,68,742/- as claimed by the assessee while arriving at the total income of Rs. 57,18,040/-.

(d) Being aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) which was allowed vide order dated 1