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2006 (4) TMI 352 - AT - Income TaxDeductions u/s 80HHC - Export of machinery from Germany directly to Dhaka, considered as export sale? - such export eligible for deduction under section 80HHC? - HELD THAT:- We are of the opinion that the reference by the CIT(A) to the Customs Act to define "export" was misplaced if he could rely on the Customs Act for the definition of export for interpreting section like section 80HHC which was brought into existence with a view to export goods so that good foreign exchange was earned then he should have taken into consideration the various provisions of other Government of India Rules and Regulations like Import and Export Policy, Context of RBI Manual and other circulars. By not doing so, he restricted his view only to the Customs Act and denied the benefit of section to the assessee. The section has discussed was specifically brought in to expedite exports and earn foreign exchange. There is tremendous development on the issue after relying on the decision rendered in the case of Hindustan Lever Ltd.[1996 (3) TMI 161 - ITAT BOMBAY-A]. We also rely on the decision of Hon’ble Bombay High Court in the case of H.A. Shah & Co. v. CIT/EPT [1955 (9) TMI 53 - BOMBAY HIGH COURT] that as a general rule the principle of res judicata is not applicable to decision of Income-tax Authorities. However, if there is a total lack of consistency, that would lead to chaos in judicial administration. Therefore, there can be circumstances where there may be a departure from the earlier held position. The Hon’ble Bombay High Court had mentioned about "fresh circumstances" and "material facts". The situation that the goods that were ordered by Bangladesh had to be routed through India to make it export will only end in creating more complication. In the global economy, where the goods from one part of the world are sent to the another part of the world against the directions of third party is very common. Ultimately, we are of the opinion that section 80HHC was specifically created to help export out of India and earn foreign. Unless the section is interpreted in this manner without causing any injustice, then this interpretation resulting in benefit of tax payer should be adopted. Thus, we hold that the assessee is entitled for deduction u/s 80HHC of the Income-tax Act, 1961, on profit of shipment in respect of plant and machinery sold in Bangladesh.
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