TMI Blog2011 (7) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... lining to approve the agreements of the appellant with Sedgwick Offshore Resources Ltd., London, for the purposes of section 80-O of the Income-tax Act, are improper and illegal - further find that the words 'sale proceeds' in Section 10-A would, in the context also mean, net proceeds, if the goods were purchased from foreign buyers on credit - The explanation 1 and 2 to sub section (3) is not attracted in the present case - Thus, the question of law raised by the appellant-department are covered by decision of the Supreme Court in J.B. Boda and Co. (P) Ltd vs. CBDT, [1996 (10) TMI 70 - SUPREME Court] - Appeals are dismissed assordingly. - 512 of 2009, 51, 54, 58, 28 of 2010 - - - Dated:- 13-7-2011 - Sunil Ambwani and Pankaj Mithal, JJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ITA No. 512 of 2009), as disclosed in paras 3 and 4 of the order of the Appellate Tribunal, are as stated below:- "3. In the year under consideration, the assessee imported 14.1086 kgs of gold bars on a total of thirteen invoices received from three foreign parties namely (I) Hayatt Jewellers, (ii) Dhakan Jewellers and (iii) Evershine Jewellery of Dubai. The total value of import was shown at 17,02,589 US Dollars and accordingly, after converting into Indian rupees, a sum of Rs.7,85,71,961/- was debited as purchase. However, in respect of sales, assessee shown export of sale of 151.293 kgs of gold jewellery through a total ten invoices valuing at 19,99,583 US Dollars resulting into a credit of 9,12,73,602/- under the head 'sales'. Aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 10A as according to him entire sale proceeds have not been brought into India and have not been credited in the bank account." In para 8 of the order of the Tribunal, it observed as follows:- "... The undisputed facts are that assessee had imported gold bars without incurring any expenditure in foreign exchange. It was import on credit. It was converted into gold ornaments and exported. The assessee received back net amount and credited it into the bank account and claimed exemption on the income computed on that basis. ..." The Tribunal relied upon judgment of the Supreme Court in J.B. Boda and Co. (P) Ltd vs. CBDT, [1997] 223 ITR 271, in observing that if assessee receives net proceeds in foreign exchange then the deduction un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such other authority as is authorized under any law for the time being in force for regulating payments and dealings in foreign exchange. Explanation 2:- the sale proceeds referred to in this sub-section shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained or the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India." It is not denied and rather admitted that the assessee was importing gold bars, without incurring any expenses on foreign exchange, which was imported on credit. The gold bars brought into the country were got converted into jewelery, and exported thereafter against such credit. It was not a two way transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the foreign reinsurers first and thereafter to receive the commission from the foreign reinsurer, will be an empty formality and a meaningless ritual, on the facts of this case. On a perusal of the nature of the transaction and in particular the statement of remittance filed in the Reserve Bank of India regarding the transaction, we are unable to uphold the view of the respondent that the income under the agreement is generated in India or that the amount is one not received in convertible foreign exchange. We are of the view that the income is received in India in convertible foreign exchange, in a lawful and permissible manner through the premier institution concerned with the subject-matter -- the Reserve Bank of India. In this view, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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