TMI Blog2012 (9) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... Going by the reasoning of this court and the definiton of "export turnover" no hesitation in confirming the order of the Tribunal - the computation of profits of the business is one thing and the computation of export turnover as defined in Section 80HHC Explanation (b), has to be in respect of sale proceeds received or brought in India in convertible foreign exchange and in contrast to this the total turnover as observed by this Court has to be in respect of the goods which are exported out of India - against assessee. Direction to consider the assessee's plea for allowance of the claim for bad debt since the foreign buyer refused to remit the sale proceeds for the exported goods and the Indian Embassy in Paris also informed the difficulties in realising the same. - Tax Case (Appeal) No.492 of 2006 - - - Dated:- 23-7-2012 - MRS.JUSTICE CHITRA VENKATARAMAN, MR.JUSTICE K.RAVICHANDRABAABU, JJ. For appellant : Mr. T.N.Seetharaman For respondent : Mr.K.Suresh Kumar Standing Counsel for Income Tax JUDGMENT CHITRA VENKATARAMAN, J. The assessee is on appeal as against the order of the Tribunal relating to the assessment year 1996-97, raising the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the assessee contended that the said amount would be entitled for consideration in the calculation of 80HHC relief. The first appellate authority pointed out that considering the letter from the Indian Embassy, the Assessing Officer should consider the assessee's claim for allowance of bad debt/business loss accordingly. As far as the sum of Rs. 6,47,709/- was concerned, the Assessing Officer was directed to include the said sum for the purpose of exemption under Section 80HHC in view of the communication dated 15.3.1999 from the Commissioner of Income Tax . Aggrieved by the said order, the assessee went on appeal before the Income Tax Appellate Tribunal, which once again confirmed the reasoning of the Commissioner of Income Tax (Appeals). 4. The Tribunal pointed out that due to certain objections raised by the foreign buyer the assessee could not realise the sale proceeds of Rs.9,26,324/-, however, that would not in any manner interfere with the working of export turnover and total turnover. The Tribunal pointed out that even if the unrealised sale proceeds is deducted as proportionate to the business profit and the total turnover the result would be the same when deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in convertible foreign exchange in accordance with clause (a) of sub-section (2) of any goods or merchandise to which this section applies and which are exported out of India, but does not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962); (ba) "total turnover" shall not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962). 8. In the decision reported in (2002) 257 ITR 60 ( Commissioner of Income Tax Vs. Madras Motors Ltd., /M.M. Forgings Ltd.,) this court pointed out that the language of sub-section shows that the export turnover becomes numerator while total turnover becomes denominator. As far as the denominator is concerned, the total turnover of the business would be the total turnover of the business of the goods to which the section applies. This court pointed out that the sub-section has been created only to see the ratio of the income out of the export to the total income out of the business in respect of those goods to which the section applies. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual receipt of sale proceeds i.e export turnover of Rs.91,20,802/-. Taking the actual foreign exchange received excluding a sum of Rs.9,26,324/- alone would represent the export turnover of the assessee. Going by the reasoning of this court and the definiton of "export turnover" we have no hesitation in confirming the order of the Tribunal. 11. Learned counsel for the assessee placed reliance on the decision of the Kerala High Court reported in (2002)258 ITR 641 (Commissioner of Income Tax Vs. Abad Fisheries), particularly to the last paragraph of the judgment. We do not think that the said decision would be of any assistance to the assessee. The assessee therein claimed deduction on the export profits which could not be brought into India in convertible foreign exchange. The Kerala High Court pointed out that for the purpose of denominator of the "total turnover" the amount which had not been received in foreign exchange could not form part of the total turnover. Confirming the view of the Tribunal, the Kerala High Court held that since the amount could not be included in the profit the same cannot also be included in the total turnover. 12. As far as this view is concer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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