Dismissing the appeals of the revenue the Court held that ; though the assessee had incurred a loss in export business it was eligible for deduction under section 80HHC . The provision under sub-section (3) provided for the computation of the benefit at a proportion of the total profits from business, equivalent to the proportion the export turnover bore to the total turnover. According to the provision under sub-section (1), the incentive was a deduction, while computing the total income of the assessee, to the extent of profits, referred to in sub-section (1B), derived by the assessee from the export of such goods or merchandise. The computation of profits derived from export, for an assessee doing both export and domestic business, had to be made by resorting to the formula as available under sub-section (3)(c) of section 80HHC . The proportion, which the export turnover bore to the total turnover, had to be applied to the business profits to elicit the exact amount eligible for exemption under section 80HHC as profits derived from export. The business profits included those derived in the domestic market, those from high sea sales of imported goods, the turnover of which had to be included in the total turnover. It was the incentive permitted by the Legislature, for earning in foreign exchange, whether the export business generated profit or not. In computing the deduction under section 80HHC , the loss incurred in the export business would be of no consequence, since the formula as applied, would take in the total turnover, the export turnover and the total business profit.Loss incurred in export business is eligible deduction .