(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; [Substituted by Act 32 of 1985, Section 19, for Section 80-HHC (w.e.f. 1.4.1986).](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,] [Substituted by Act 18 of 1992, Section 46, for " manufactured by the assessee" (w.e.f. 1.4.1992).][and of trading goods, the profits derived from such export shall,- [Substituted by Act 32 of 1985, Section 19, for Section 80-HHC (w.e.f. 1.4.1986).](i)in respect of the goods or merchandise ] [manufactured or processed by the assessee,] [ Substituted by Act 18 of 1992, Section 46, for " manufactured by the assessee" (w.e.f. 1.4.1992).][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 [Substituted by Act 32 of 1985, Section 19, for Section 80-HHC (w.e.f. 1.4.1986).](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 licence 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 the business carried on by the assessee.] [Substituted by Act 49 of 1991, Section 28, for sub-Clause (3) (w.e.f. 1.4.1992).][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) or this sub-section 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, for 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 sub-section 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 assessee 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 sub-section 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) or 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: ] [ Inserted by Act 55 of 2005, Section 4 (w.r.e.f. 1.4.1998).][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.] [ Substituted by Act 18 of 1992, Section 46, for " manufactured by the assessee" (w.e.f. 1.4.1992).][(3-A) For the purposes of sub-section (1-A), 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 ][* * *] [ Certain words omitted by Act 49 of 1991, Section 28 (w.e.f. 1.4.1992).];(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 ] [Inserted by Act 26 of 1988, Section 24 (w.e.f. 1.4.1989).][* * *] [Certain words omitted by Act 49 of 1991, Section 28 (w.e.f. 1.4.1992).] [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. ] [Inserted by Act 26 of 1988, Section 24 (w.e.f. 1.4.1989).]
