TMI Blog2007 (4) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... regard remained that the assessee company was a registered merchant exporter and procures orders from its foreign buyers directly. To comply with the export obligations, it makes purchases from various manufacturers/suppliers within the country, some of which also include EOUs. For the years under consideration, the assessee had procured orders directly from its foreign buyers. It thereupon exported the goods by procuring them from various manufacturers including 2 EOUs i.e. STI Granite India Ltd. and Coromandal Stamping Stones Ltd. These two EOUs were entitled for deduction under s. 10B and were also entitled to export benefits such as REP license, special import license, etc. The assessee upon receiving the export orders from its foreign buyers places the order on its suppliers including the EOUs with the condition to the effect that they would supply the goods directly from its supply to the inland container depot on behalf of the assessee ex-factory in packed conditions for the purposes of export. The assessee explained further that in terms of the prescribed procedure for the purposes of claiming export benefits under the scheme of third party export provided in EXIM Policy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OUs for export. The learned Authorised Representative submitted that the facts in the case of Sea Pearl Industries vs. CIT (2001) 165 CTR (SC) 395 : (2001) 247 ITR 578 (SC), relied on by the AO, have different facts, hence not applicable in the present case. In that case, the foreign exchange realization was done by the export house and both the export house and the supporting manufacturer had claimed deduction under s. 80HHC. In the present case, however deduction under s. 80HHC has been claimed only the assessee. The manufacturer had claimed exemption under s. 10B and that should not come in a way of the assessee getting the deduction under s. 80HHC. The learned CIT(A) being convinced and satisfied with the submissions made on behalf of the assessee came to the conclusion that the deduction under s. 80HHC should be given to the assessee even on sales for which the purchases were made from EOUs. This relief given by the learned CIT(A) to the assessee has been questioned by the Revenue before us. 4. The learned Departmental Representative has placed reliance on the assessment order whereas first appellate order has been justified by the learned Authorised Representative. 5. Aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orking for the export oriented undertaking. The AO was of the view that whatever income assessee is earning being the difference of realization of sale proceeds less the purchase price paid to export oriented undertakings is basically its income in the nature of commission and the expenses are incurred by it to earn this income, which are duly allowable to it but the assessee is not entitled to claim deduction under s. 80HHC on the same. The AO did not find substance in the contention of the assessee that the EOUs are not getting payment in convertible foreign exchange and the orders from foreign buyers were procured by the assessee and the amounts in consideration against the goods so exported were sent and realized in convertible foreign exchange in the accounts of the assessee. It is relevant to mention over here that in respect of units established in asst. yr. 2000-01 or prior to it, it was not mandatory that realization should be made in convertible foreign exchange for claiming exemption under s. 10B of the IT Act, 1961. 6. Considering all these aspects of the matter, we fully agree with the view of the AO that exemption/deduction cannot be allowed twice on the export of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction does not matter more because admittedly the goods were to be destined for export purposes. The only difference in the provisions of law in s. 10B during asst. yrs. 2000-01 and 2001-02 remained that in respect of units established in asst. yr. 2000-01 or prior to it, it was not mandatory that realization should be made in convertible foreign exchange for claiming exemption under s. 10B of the IT Act, 1961. Thus, the grievances, if any, in this regard would be of manufacturers only and not of the assessee. In conclusion we are of the view that the assessee was very much entitled for deduction under s. 80HHC on the income it had earned on the export of the goods. We order accordingly. The first appellate order is thus upheld. The issue raised in the grounds of the appeals is decided in favour of the assessee. 7. The grounds as well as appeals are thus dismissed. ITA No. 845/Luck/2004: 8. The assessee has questioned first appellate order on the grounds that the learned CIT(A) has erred in confirming the disallowance of deduction under s. 80HHC of the Act in respect of export turnover of the goods purchased from overseas market transshipped directly from a third country t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns Anr. vs. Union of India (1997) 141 CTR (All) 310 : (1996) 222 ITR 606 (All), CIT vs. Silver Arts Palace (2003) 180 CTR (SC) 309 : (2003) 259 ITR 684 (SC), CIT vs. Gimpex (P) Ltd. (2002) 176 CTR (Mad) 112 : (2004) 268 ITR 377 (Mad), Asif Taherbhai, ITA No. 101/Mum/2002 and Hindustan Lever Ltd. vs. IAC, has come to the conclusion that literary meaning of the term "export" means sending goods to another country, it did not mean only sending goods out of one own country to another, Tribunal remained of the view that reliance placed by the Revenue on the decision of Mumbai Tribunal in the case of Hindustan Lever Ltd. was misplaced, as the said decision did not, have occasion to consider the Bombay High Court decision in the case of Bombay Burmah Trading Corporation vs. CIT (1991) 188 ITR 122 (Bom). 12. The learned Departmental Representative, on the other hand, placed reliance on the decision of Hon'ble Gujarat High Court in the case of Dhall Enterprises Engineers (P) Ltd. vs. CIT (2007) 207 CTR (Guj) 729, holding that export out of India means export should be from India and not from any other country. He thus justified the first appellate order. 13. The learned Authorised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sections the language is specific that export should be from India to a place outside India, these words cannot be imported in s. 80HHC to mean that export should be from India. The Hon'ble Supreme Court in the case of Bombay Burmah Trading Corporation with reference to s. 35B of the Act has been also pleased to hold that for claiming deduction in that section export need not be ex-India. The Bombay Bench of the Tribunal in the case of S.M. Energy Teknik Electronics Ltd. vs. Dy. CIT has dealt with the identical issue in details. In that case the assessee had claimed deduction under s. 80HHC on goods purchased by the assessee company from Germany and sold it directly to the customers in Bangladesh. The deduction was denied by the lower authorities leading to the issue as to whether the above sale constitutes export or not. The Tribunal after discussing the matter in details and relying upon the decisions of Hon'ble Courts in the case of Bombay Burmah Trading Corporation, J.K. Boda Co. (P) Ltd. vs. CBDT (1997) 137 CTR (SC) 287 : (1997) 223 ITR 271 (SC), Bajaj Tempo Ltd., Coca Cola Export Corporation vs. ITO Anr. (1998) 146 CTR (SC) 250 : (1998) 231 ITR 200 (SC), Ram Babu So ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
