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TMI Blog2013 (7) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... as not in the nature of "other receipts" and could not be reduced from 'profit of business' under clause (baa) of Explanation below Section 80 HHC(3) of I.T. Act?" Counsel for the revenue submits that the amount claimed on account of foreign exchange fluctuation is required to be reduced @ 90% as per explanation to clause (baa) to Section 80HHC(3) of the Income Tax Act, 1961 (hereinafter referred to as the 1961 Act) and, therefore, the Tribunal is not justified in holding that receipts received on account of fluctuation in exchange rate are not in the nature of 'other receipts' stipulated in clause (baa) of explanation to Section 80 HHC (3). It is argued that such a receipt would necessarily fall within the meaning of words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt realized on account of foreign exchange fluctuation is a part of export turnover in the year of its receipt. In the case of Smt. Sujata Grover (supra), it has been held by the Hon'ble ITAT that foreign exchange fluctuation gain pertaining to exports affected in earlier years cannot be said to be "any other receipts of a same nature", in terms of Explanation (baa) to Section 80 HHC(3) for calculating the profit of the business. Respectfully following the decision of the ITAT this issue is decided in favour of the appellant, and the Assessing Officer is directed to compute the deduction u/s 80 HHC by including net amount of Rs. 1,80,611/- in the export proceeds of the appellant firm." Aggrieved by this order, the revenue filed an appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uctuation in foreign currency. The amount so received, cannot possibly fall within the meaning of words like brokerage, interest, rent and charges, but may, as suggested by counsel for the revenue, fall within the expression "any other receipt of a similar nature included in such profits". A careful perusal of this expression would indicate that for these receipts to fall within meaning of the expression "any other receipt" they should be receipts of a "similar nature" to "brokerage", "commission", "interest", "rent" or "charge" or may we say, should be similar in form and content to these words. As referred to hereinabove, an amount received on account of fluctuation in foreign exchange is not similar to "brokerage", "commission", "interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port turnover has to be considered in the context of mode of payment being made by foreign buyers, not in the mode of convertible exchange. However, the legislature in its wisdom has cleared that in case of convertible foreign exchange, a time-limit of six months has been prescribed. Therefore, this aspect cannot be ignored. Factually, neither the CIT(A) nor the Tribunal has gone into the question whether the export turnover was realised beyond six months or not. Hence, we do not think that this question should be decided but as no such point has been formulated by this Court, nor any cross appeal has been filed in this case. We are of the view that this amount received in a year or subsequent year by virtue of exchange rate difference cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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