TMI Blog2013 (10) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Accordingly, the foreign company deducted the amount towards demurrage and dead freight and remitted the balance amount to the assessee. This does not mean that the sale consideration was anything less than Rs.6,14,87,164/- for the purpose of claiming deduction under 80 HHC of the Act. There is nothing on material to show that the parties had agreed that the balance after adjusting demurrage and dead freight charges alone would be the safe consideration – Decided against the Revenue. - Tax Case (Appeal) No.962 of 2009 - - - Dated:- 23-9-2013 - Chitra Venkataraman And T. S. Sivagnanam,JJ. For the Appellant : Mr. N. V. Balaji Standing Counsel for Income Tax Department For the Respondent : Mr. Vijayaraghavan for M/s. Subbaraya A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44,590/- and Rs.3,33,405/- respectively. Instead of the assessee paying the amount towards demurrage and dead freight, the purchaser, M/s.United Molasses, London deducted the said amount from the sale consideration and remitted the balance sale proceeds to the assessee company. The assessee submitted that the deduction under Section 80 HHC has to be worked out on the sale consideration of Rs.6,14,87,164/-. However, the Assessing Officer rejected the said claim and restricted the deduction only to the net amount received by the assessee. 3. Aggrieved by this, the assessee went on appeal before the Commissioner of Income Tax (Appeals); having lost the same, the assessee filed an appeal before the Income Tax Appellate Tribunal, which allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Molasses was on the consideration of Rs.6,14,87,164/- only. As per the agreement any delay in shipment on account of the assessee would have to be borne by the assesseee only and as per the agreement between the parties, the liability was already charged against the assessee. Instead of the assessee paying the amount to the Chartered Ship Owners for the delay caused by them, the Foreign Company paid the same and after deducting the demurrage on the delay caused by the assessee, the Foreign Company remitted only the net amount pertaining to the sale proceeds. 7. Considering the agreement between the parties, the assessee thus rightly claimed that the Chapter VI deduction should be on the agreed amount on the sale of molasses and not what w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee showed a two-way traffic. Thus, on facts, to first insist on a formal remittance to the foreign insurer and then thereafter to receive the commission from the foreign insurer by the assessee would be an empty formality and a meaningless ritual. Thus on going through the nature of the transaction and the statement of remittance filed in the Reserve Bank of India regarding the transaction, the Apex Court held that the income received in India in convertible foreign exchange in a lawful and permissible manner through the premium institution concerning the subject matter was to be given its due credence and that the Board was not correct in declining the agreement of the assessee with the Foreign Reinsurance Company. 9. In the circ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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