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2017 (12) TMI 343 - AT - Income TaxDeduction u/s. 10A - export sales - non-receipt in convertible foreign exchange - Held that:- Provisions provided in the manual of Reserve Bank of India which clearly specify the manner of receipt in foreign exchange as well as the meaning of foreign exchange. Now on going through the provisions of section 10A(3) and Explanation thereto, Explanation-2 to section 10A and the information provided in the manual of Reserve Bank of India all together, we are of the opinion that the assessee in order to claim deduction u/s. 10A has necessarily to prove that export sale proceeds are recovered in convertible foreign exchange/currency in India or has kept the money outside India in another bank account with the approval of Reserve Bank of India. Certainly, the assessee has not fulfilled any of these conditions. Even for the sake of discussion, the plea of the assessee of converting the outstanding sale proceeds into overseas direct investment to be treated as compliance of provision of section 10A(3) then also it cannot be accepted as there is no proper approval of Reserve Bank of India for capitalization of outstanding export sale proceeds. In view of our detailed discussion above, are of the view that assessee is not eligible to claim deduction u/s. 10A on the export sales of ₹ 74,60,891/- as they have not been received in convertible foreign exchange as per the provisions of section 10A(3). Therefore, we set aside the order of CIT(A) and confirm the disallowance made by the Assessing Officer.
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