R.M Lodha, J.:— Heard Mr. Sanjeev Shah, learned counsel for the appel-lant-assessee, and Mr. K.R Chaudhary, learned counsel for the respondent-Revenue.

2. The Income-tax Appellate Tribunal by its order dated January 8, 2003, for the assessment year 1997-98 relating to the appellant-assessee relying upon the Division Bench judgment of this court in the case of IPCA Laboratories Ltd. v. Deputy CIT (No. 1), [2001] 251 ITR 401, held that the Assessing Officer was not wrong in holding that in view of the fact that the assessee had loss from the export of trading goods, computed under sub-section (3) of section 80hhc, the ultimate figure of deduction under sub-section (3) is negative profit (loss) and, therefore, the deduction under section 80HHC of the Income-tax Act, 1961, was not available to the assessee. Challenging the said order, learned counsel for the assessee submitted that the loss suffered by the assessee from the export of trading goods while computing the deduction under sub-section (3) of section 80hhc was required to be taken as nil. Learned counsel submitted that the proviso to Sub-section (3)(c) of section 80HHC is an independent provision unconnected with subsection (3) and in view thereof on the profits earned by the: assessee on the export of merchandise manufactured by the assessee, the deduction under section 80HHC was admissible. Learned counsel for the assessee sought to distinguish the Division Bench judgment of this court in IPCA Laboratories Ltd., [2001] 251 ITR 401 and the judgment of the Supreme Court in Ipca Laboratory Ltd. v. Dy. Commissioner Of Income Tax, Mumbai, [2004] 266 ITR 521 confirming the Division Bench judgment of this court. Learned counsel for the appellant relied upon the judgment of the Delhi High Court in Modi Cement Ltd. v. Union of India, [1992] 193 ITR 91 and the judgment of the Allahabad High Court in the case of Indo-Gulf Fertilizers and Chemicals Corporation Ltd. v. Union of India, [1992] 195 ITR 485. Learned counsel also invited our attention to Black's Law Dictionary to cite the meaning of the expression “further” and “increase” occurring in the proviso appended to sub-section (3) of section 80hhc He also invited our attention to the circular issued by the Central Board of Direct Taxes pursuant to the amendment of section 80HHC in the year 1991.

3. Learned counsel for the appellant lastly submitted that the appellant has been assessed under section 115JA and under clause (viii) thereof, the appellant is entitled to deduction under section 80HHC.

4. Though learned counsel for the assessee argued the appeal at some length, in our considered view, it was not necessary in the light of judgment of the Supreme Court in the case of Ipca Laboratory Ltd. v. Dy. Commissioner Of Income Tax, Mumbai, [2004] 266 ITR 521, which concludes the controversy against the assessee. The question before the Supreme Court was whether the assessee was entitled to deduction under section 80HHC in respect of the sum of Rs. 3.78 crores by ignoring the loss of Rs. 6.86 crores. The Supreme Court had a close look at section 80HHC and held that though section 80HHC has been incorporated in the Income-tax Act, 1961, with a view to provide incentive for earning foreign exchange and a liberal interpretation of such provision may be called for the plain language of the said section being clear, the benefits which are not available cannot be conferred by ignoring or misinterpreting the words in the section. The Supreme Court considering the word “profit” occurring in sub-sections (1) and (3)(a) and (b) of section 80HHC held that the said word “profit” means a positive profit and that if there is a loss then no deduction would be available. As regards Sub-section (3)(c), the Supreme Court held that “profits from such exports” has to be profits of exports of self manufactured goods plus profits of exports of trading goods. If there is a loss in either of the two then that loss has to be taken into account for the purposes of computing profits. Beneficially we may refer to the decision of the Supreme Court in IPCA Laboratory Ltd., [2004] 266 ITR 521, wherein the Supreme Court observed thus (page 529):

“We are unable to accept the submission of Mr. Dastur. Undoubtedly section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision, the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section. In this case we are concerned with the wordings of Sub-section (3)(c) of section 80HHC. As noted earlier sub-section (3)(a) deals with the case where the export is only of self manufactured goods. Sub-section 3(b) deals with the case where the export is only of trading goods. Thus when the Legislature wanted to take exports from self manufactured goods or trading goods separately, it has already so provided in sub-sections (3)(a) and (3)(b). It would not be denied that the word ‘profit’ in section 80HHC(1) and sections 80HHC(3)(a) and (3)(b) means a positive profit. In other words if there is a loss then no deduction would be available under section 80HHC(1) or (3)(a) or (3)(b). In arriving at the figure of positive profit, both the profits and the losses will have to be considered. If the net figure is a positive profit then the assessee will be entitled to a deduction. If the net figure is a loss then the assessee will not be entitled to a deduction. Sub-section (3)(c) deals with cases where the export is of both self manufactured goods as well as trading goods. The opening part of Sub-section (3)(c) states ‘profits derived from such export shall’. Then follow (i) and (ii). Between (i) and (ii) the word ‘and’ appears. A plain reading of Sub-section (3)(c) shows that ‘profits from such exports’ has to be profits of exports of self manufactured goods plus profits of exports of trading goods. The profit is to be calculated in the manner laid down in sub-sections (3)(c)(i) and (ii). The opening words ‘profit derived from such exports’ together with the word ‘and’ clearly indicate that the profits have to be calculated by counting both the exports. It is clear from a reading of sub-section (1) of section 80HHC(3) that a deduction can be permitted only if there is a positive profit in the exports of both self manufactured goods as well as trading goods. If there is a loss in either of the two then that loss has to be taken into account for the purposes of computing profits.”

5. The Supreme Court went on to hold thus (page 531):

“Mr. Dastur submitted that the word ‘profit’ in section 80HHC must have the same meaning in the entire section. He submitted that as the word profit in section 80HHC(1) means only positive profit, it will have the same meaning in section 80HHC(3)(c). He submitted that thus the word profit in section 80HHC(3)(c) would not include losses and if there are any losses they are to be ignored. We are unable to accept this submission for more than one reason. Firstly, it is not necessary that the word ‘profit must have the same meaning. The meaning that the word ‘profit’ will depend on the context in which it is used. In section 80HHC(1) it is admittedly used to indicate positive ‘profit’ because the deduction will only be of a positive profit. Section 80HHC(3) is the subsection which provides how profits are to be worked out in computing the total income. For purposes of such computation both profits and losses have to be taken into account. Thus the word ‘profit in section 80HHC(3) will mean profits after taking into account losses, if any. More importantly, in our view, the term ‘profit’ in section 80HHC both in subsection (1) and in sub-section (3) means a positive profit worked out after taking into consideration the losses, if any. Thus the word ‘profit’ has the same meaning in section 80HHC(1) and (3).”

6. The meaning of the word “profit” occurring in section 80HHC, sub-sections (1) and (3), as held by the Supreme Court is the same and that is positive profit worked out after taking into consideration the losses. The meaning of the word “profit” in the proviso appended to Sub-section (3)(c) is no different and in our considered view, carries the same meaning, i.e, the positive profit worked out after taking into consideration the losses. It is true that in the case of IPCA Laboratory Ltd., [2004] 266 ITR 521, the Supreme Court was not concerned with the proviso appended to Sub-section (3)(c) of section 80HHC as it was not necessary for the purpose of that case but the construction of the word “profit” by the Supreme Court in relation to the main provision contained in sub-section (3) of section 80hhc is equally applicable to the word “profits” occurring in the proviso appended to that sub-section. The proviso surely is not an independent provision as was sought to be contended by learned counsel for the assessee. There is no indication to that effect. Normally a proviso is to be construed in relation to the subject matter covered by the section to which the proviso is appended. The known rule of construction of a statutory provision is that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision. It carves out an exception to the main provision to which it has been enacted as a proviso and no other. Moreover, the language of the main provision, namely, sub-section (3) of section 80hhc, is very clear and has been held to be so by the Supreme Court, the word “profit” understood in the main provision has to be understood the same way in the proviso appended thereto. The expression “further increased” is no pointer that the proviso is enacted as a separate section. The proviso appended to clause (c) of sub-section (3) of section 80HHC reads that the profit computed, inter alia, under clause (c) of sub-section (3) 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 licence acquired from any other person), and clauses (iiib) and (iiic) of section 28. The profit computed under clause (c) of sub-section (3) means positive profit worked out after taking into consideration the losses, if any, and therefore, the word “profits” occurring in the proviso means positive profit.

7. Incidentally we may notice that the submission sought to be advanced for the assessee before us was also the submission of learned senior counsel appearing for the assessee before the Supreme Court in the light of the provisions contained in sub-sections (3)(c)(i) and (ii) of section 80HHC. Inter alia, negativing the said contention the Supreme Court observed that when the Legislature wanted to take exports from self manufactured goods or trading goods separately, it was already so provided in sub-sections (3)(a) and (3)(b). Sub-section (3)(c) says that “profit from such exports” has to be profits of exports of self manufactured goods as well as trading goods. The profit has to be calculated in the manner laid down in sub-section (3). The words “profits derived from such exports” together with the word “and” clearly indicate that the profits have to be calculated by counting both the exports. The word “profits” appearing in the proviso appended to Sub-section (3)(c) of section 80HHC has to be given that meaning and that clearly indicates that the profits have to be calculated by counting both the exports. The Supreme Court in the case of IPCA Laboratory Ltd., [2004] 266 ITR 521 observed thus (page 531):

“Another reason why the argument of Mr. Dastur cannot be accepted is that even under section 80HHC(3)(c)(i) the profit is to be the adjusted profit of business. The adjusted profit of the business means a profit as reduced by the profit derived from business of exports out of India of trading goods. Thus, in calculating the profits, under Sub-section (3)(c)(i), one necessarily has to reduce by profits under Sub-section (3)(c)(ii). As seen above the term ‘profit’ means positive profit. Thus if there is loss then those losses in export of trading goods have to be adjusted. They cannot be ignored. We, therefore, hold that a plain reading of section 80HHC makes it clear that in arriving at the profits earned from export of both self manufactured goods and trading goods, the profits and losses in both the trades have to be taken into consideration. If after such adjustments there is a positive profit the assessee would be entitled to deduction under section 80HHC(1). If there is a loss he will not be entitled to any deduction.”

8. The contention of learned counsel for the assessee, thus, cannot be accepted that negative profit or in other words “loss” from the export of trading goods arising on computing the deduction under sub-section (3) of section 80hhc has to be taken nil. This is based on misconstruction of the proviso appended to Sub-section (3)(c) of section 80HHC.

9. As regards the circular issued by the Central Board of Direct Taxes relied upon by learned counsel for the assessee, suffice it to observe that the said circular also shows that the positive profits can only be considered for the purpose of deduction. This is what the Supreme Court said regarding the said circular in IPCA Laboratory Ltd., [2004] 266 ITR 521.

10. The judgment of the Delhi High Court and the Allahabad High Court relied upon by learned counsel for the assessee, have no relevance and application to the present case. The case in hand is wholly and squarely concluded by the judgment of the Supreme Court in IPCA Laboratory Ltd., [2004] 266 ITR 521. Since the Income-tax Appellate Tribunal did not commit any error in upholding the order of the Assessing Officer wherein it was held that the assessee was not entitled to deductions as specified in section 80HHC, the contention of learned counsel for the assessee that the assessee was entitled to benefit of deduction under clause (viii) of section 115JA is misconceived.

11. The appeal, thus, fails and is dismissed accordingly.