TMI Blog2013 (7) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... from profit in terms of Explanation (baa) to Section 80 HHC of the Act. In this view of the matter, the question of law is answered in favour of the assessee and against the revenue - ITA No.539 of 2008 - - - Dated:- 18-7-2013 - MR. JUSTICE RAJIVE BHALLA AND MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Shri Rajesh Katoch, Advocate, for the appellant. Shri Pankaj Jain, Advocate for the respondent. JUDGEMENT Rajive Bhalla , J. (Oral): The revenue, challenges order dated 14.11.2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench-A, Chandigarh on the following question of law:- Whether on the facts and law, the Hon'ble Income Tax Appellate Tribunal was justified in holding that exchange rate fluc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income Tax, (2011) 240 CTR (Cal) 79. We have heard counsel for the parties, perused the impugned order as well as all relevant statutory provisions. The Assessing Officer, vide order dated 31.1.2006, ordered that amount received by the assessee on account of fluctuation in rates of foreign exchange, shall be added back in accordance with Section 80 HHC of the 1961 Act. Aggrieved by this order, the assessee filed an appeal. The Commissioner of Income Tax (Appeals) vide order dated 12.1.2007 after relying upon certain earlier decisions of Income Tax Appellate Tribunal, allowed the appeal by holding as follows:- 7. I have considered the arguments of the ld. A.R. and find merit in it. In the plethora of decision, the ITAT have hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits; and (2) the profits of any branch, office, warehouse or any other establishment of the assessee situate outside India ; Admittedly, the receipts in dispute were received, on account of fluctuation of foreign currency during the course of exports and, therefore, in our considered opinion would not fall within meaning of the words and expression used in Explanation (baa) appended to Section 80 HHC. The words and expression used in Explanation (baa) are receipts by way of brokerage , commission , interest , rent and charges . The amount received on account of foreign exchange fluctuation is an amount paid to an assessee so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort was made there has been fluctuation of foreign currency, as such, there was a surplus realisation in terms of Indian currency. The question is whether the aforesaid surplus realisation of ₹ 10,61,326/- can be treated to be a part of export turnover or not. In our view, going by the definition of the of the export turnover, the aforesaid amount was realised in connection with the export followed by payment of the price, by the foreign buyer. Unless there has been an export the aforesaid surplus would not have been realised. Hence, this surplus realisation is certainly relatable to the export. Therefore, we hold that this is an export turnover. 13. Here, the payment was made in foreign currency, not in terms of the Indian currenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded in the above judgment, particularly as counsel for the revenue is not in a position to point out any distinguishing features, whether in fact or on law and even otherwise as we have already held that words appearing in Explanation (baa) do not support the argument of the revenue that amount received on account of foreign exchange fluctuation should not be included in the export income of the party, the Income Tax Appellate Tribunal was right in holding that amount received for exchange rate fluctuation does not fall within the expression other receipts and shall not be reduced from profit in terms of Explanation (baa) to Section 80 HHC of the Act. In this view of the matter, the question of law is answered in favour of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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