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2015 (12) TMI 1030 - HC - Income TaxDeduction claimed under section 80HHC - whether the supporting manufacturer is entitled to seek the benefit of cash assistance (export incentive) granted by the Government exclusively to the export house or trading house in terms of sub-section (3) of section 80HHC of the Income-tax Act and if such incentive is passed on by the export house or trading house to the supporting manufacturer, whether such amount would be hit by the provisions of sub-section (3) of section 80HHC of the Income-tax Act? - Held that:- If the trading house is agreed to and in terms of the said agreement, they have passed on the additional price-export incentive, supported by the certificate in terms of sub-section (4A) of section 80HHC, then the requirement under sub-section (1A) of section 80HHC is satisfied by the supporting manufacturer. The incentives stated in section 28(iiia), (iiib) and (iiic) of the Income-tax Act, no doubt, would accrue only to the export trading house. But once the said amount stands transferred to the supporting manufacturer by the export house or trading house, it takes the colour of additional price and that is in relation to the agreement between the parties subject to issuance of certificate in terms of sub-section (4A) of section 80HHC of the Income-tax Act. In the instant case, the assessee had directly exported the goods to the foreign constituents and received the export incentives directly from the Government based on the agreement between the export house and the assessee, as a supporting manufacturer. So long as the export trading house transfers the export incentive accrued to its export turnover in the form of additional price to the supporting manufacturer pursuant to an agreement entered into between them, supported by sub-section (4A) of section 80HHC of the Income-tax Act, the Department cannot deny the benefit of deduction claimed under section 80HHC(1A) of the Income-tax Act. In the light of the above, we answer the question of law in favour of the assessee and against the Revenue.
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