Radhakrishnan, Ag. C.J.

Whether turnover on sales to Export House undertaken by the assessee as a supporting manufacturer be included in the “export turnover” for the purpose of computation of deduction under the proviso to sub-section (3) of Section 80 HHC of the Incometax Act, 1961, is the question that has come up for consideration in this case.

2. Assessee is a cashew exporter who had made direct and indirect exports for the assessment year 1992-93 and claimed total deduction of an amount of Rs.97,54,515/- under Section 80 HHC (1) and (1A) of the Income tax Act, 1961. The assessing officer granted separate deductions under Section 80 HHC(1) and 80 HHC (1A) in respect of both direct and indirect exports totaling an amount of RS.91,10,306/- as against the claim of Rs.97,54,515/- while granting deduction under the proviso to Section 80 HHC (3) the assessing officer excluded sales to export houses from “Export turnover” and reworked relief at Rs.12,63,532/-. Aggrieved by the said order, assessee took up the matter before the Commissioner of Income tax (Appeals). The Commissioner (Appeals) upheld the order of the assessing officer on the ground that export turnover for the