Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2017 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (8) TMI 735 - HC - Income TaxEntitlement to deduction u/s 80 HHC - Export Trading House (‘ETH’) in question was not holding a valid THC - case of the Revenue that REIL did not have a valid THC on the date it issued the certificate to the Assessee in Form 10 CCAB, the Assessee cannot get the benefit under Section 80 HHC (1) read with (1A) - Held that:- There is a discernible distinction in the legislative scheme of Section 80 HHC between, the deduction that can be claimed by an exporter and the deduction that can be claimed by a supporting manufacturer. It appears to this Court that while the supporting manufacturer certainly has to fulfil the condition of a certificate having been issued by the exporter/export trading house to avail the benefit of a deduction from the turnover that has been made available to the supporting manufacturer, expressly in terms of Section 80 HHC (1A) of the Act, the said deduction does not hinge upon the eligibility of the exporter for the deduction under sub-section (1) of Section 80 HHC of the Act. A perusal of Form 10 CCAB clearly shows that there is a separate certificate to be issued in favour of the supporting manufacturer where the exporter makes a declaration that it has not claimed a deduction under Section 80 HHC (1). There is a counter verification by the Chartered Accountant of such a certificate. It is, therefore, clear that there is no double deduction claimed in respect of the export and this is consistent with the legislative intent of extending the benefit under Section 80HHC either to the exporter or to the supporting manufacturer and not to both. Even after the period for which the renewal of the THC was sought, REIL continued to be treated as an export house and that is plain from the facts that have emerged before the CIT(A) as well as the ITAT. For the aforementioned reasons, the Court is unable to accept the contention of the Revenue in the present case that if the exporter, i.e., REIL, is not entitled to a deduction under Section 80 HHC for the AY in question then, automatically, even the supporting manufacturer, i.e., the Assessee herein, would not be entitled to a deduction under Section 80 HHC as well.- Decided in favour of assessee. - Entitlement of Supporting Manufacturer to deduction - Held that:- On the question of REIL not having a valid THC and, therefore, not being in a position, at the relevant time, to issue any certificate to the Assessee in terms of the proviso to Section 80 HHC(1) of the Act, the Court concurs with the ITAT that REIL did file an application for renewal of its THC, which was pending before the relevant authorities for four long years and was pending even on the date of the assessment order. Therefore, the extant Exim Policy for the relevant period, which expressly states that during the interim period the trading house would be eligible to claim all the facilities and benefits, would come to rescue of the Exporter/REIL and, therefore, to the further benefit of the supporting manufacturer/Assessee as well. The benefit under Section 80 HHC was, therefore, available to REIL for the exports made during this period. However, REIL having issued the disclaimer, did not, in fact, claim the deduction. The mere non-grant of the renewal of the THC by the DGFT cannot deprive the Assessee as a supporting manufacturer for the deduction it is entitled to in terms of Section 80 HHC (1A) of the Act. - Decided in favour of assessee.
|