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2006 (1) TMI 176 - AT - Income TaxInterpretation Of Statutes - deduction u/s 80HHC and 80HHD - meaning of the word "goods" for the purpose of s. 80HHC - Can foreign exchange consider as "goods" for the purpose of s. 80HHC - business of tour operator as well as dealing in foreign currency - HELD THAT:- It is also well settled rule of interpretation that in case of ambiguity if two interpretations are possible, then the Court should accept the one which serves the purpose or object of the Act than the construction which defeats or frustrates such purpose or object. Sec. 80HHC is a code by itself and was enacted with the sole purpose to promote the export of goods produced in India and to augment the foreign exchange reserve in order to improve the Indian economy. The ultimate purpose was to increase the foreign exchange reserves so that the Government may discharge its foreign debts in foreign currency. If the contention of assessee that foreign exchange amounts to goods is accepted, then, in our opinion, it would frustrate and defeat the purpose or object of s. 80HHC inasmuch as it would deplete the foreign exchange reserve by sending the same to outside countries. The object of s. 80HHC would be achieved only when the word "goods" is held to exclude money including foreign exchange. Thus, we would prefer the interpretation, which serves the purpose and object of the enactment. Even on this ground, we hold that "foreign exchange" cannot be considered as "goods" for the purpose of s. 80HHC. We are of the view that the decision of the Calcutta Bench [2003 (4) TMI 231 - ITAT CALCUTTA-D] cannot be considered as precedent so as to bind the other co-ordinate Bench. In view of the above discussion, it is held that foreign exchange cannot be considered as "goods" for the purpose of s. 80HHC of the Act. Since this condition is not satisfied, the assessee is not entitled to deduction under s. 80HHC. The orders of the learned CIT(A) for all the years are, therefore, upheld on this issue. Computation of deduction u/s 80HHD - We are unable to accept the contention of the learned counsel for the assessee. If we have a bare look at the provisions of s. 80HHD(3)(b), we find that the legislature has used the words "receipts of the business unlike the turnover of business in s. 80HHC(3)". There is no dispute that assessee is dealing in the foreign currency and in the course of such business there may be profit or loss as the case may be. Such activity is akin to a trader and, therefore, the sale proceeds of currency amount to business receipts. In this connection, reference may be made to the judgment of the Hon'ble Supreme Court in the case of Chowringhee Sales Bureau (P) Ltd. vs. CIT [1972 (10) TMI 4 - SUPREME COURT], wherein, the sale proceeds of goods sold on auction were considered to be trading receipts even though assessee was acting as an auctioneer and was entitled to commission only. If the sale proceeds in the case of an auctioneer can be considered as a business receipt, we failed to understand as to how in the present case, the assessee can contend that sale proceeds of a currency would not amount to business receipts. In view of the same, we uphold the orders of the learned CIT(A) on this issue. In the result, appeals of assessee are partly allowed. Departmental appeals for AY 1989-90 and 1990-91 are partly allowed for statistical purpose while other appeals are dismissed. The cross-objections of assessee are dismissed as infructuous.
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