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TMI Blog2007 (8) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... d goods as supporting manufacturer of ₹ 11.30 crores. It also received duty draw back and amount on sale of DEPB licence amounting to ₹ 94,58,881. While computing deduction under section 80HHC, the amount of ₹ 94,58,881 was considered as part of profits of business and hence eligible for deduction under section 80HHC. The Assessing Officer held that such export incentives is not profit from business and while computing deduction under sub-section (3A) of section 80HHC, the same cannot be considered as eligible for deduction under section 80HHC. The learned CIT(A) held that duty draw back amounting to ₹ 7,22,856 is not to be reduced to the extent of 90 per cent thereof while computing deduction under section 80HHC. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter considering the detailed submissions as well as decision of this Tribunal in the case of Sharda Export (supra) as well as that of Hon'ble Supreme Court in the case of Baby Marine Exports (supra), held as under:- "7. We have considered relevant facts, arguments advanced and the case laws cited. As regards the first ground of appeal we find that the case falls under second Proviso to section 80HHC(3) and not to third Proviso as contended by the learned DR. A term "export turnover" has been defined under clause (b) of Explanation to section 80HHC. As per definition "export turnover" means sale proceeds received in or brought into India by the assessee in convertible foreign exchange. Since the sale of goods to exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods or merchandise to the export house in respect of which the certificate has been issued by the export house/trading house. Thus, as per the scheme of Government where any export has been effected such exporter is entitled to certain export incentives as narrated in clause (iiia), (iiib) and (iiic ) of section 28. As per the scheme, only the exporter is entitled to such benefit. However, if the export house/trading house so desires, they may agree upon to pass on the benefit to the supporting manufacturer. Thus, the effect of the provision is that if such export house passes on the benefit to the supporting manufacturer, to that extent, it can be considered as part of the sale price agreed to be paid by export house to the supporting ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see company being a supporting manufacturer has received the export incentives directly from the Government on the goods exported as per the orders received through the export house and the same have been assessed as income as per the provisions of section 28 of the Income-tax Act. Therefore, the benefit of section 80HHC is legitimately admissible to the assessee-company in a way similar to the benefits available to the direct exporters. Having regard to all the facts, provisions of law and the ratio of decisions of the apex court, cited supra, we direct the Assessing Officer to allow benefit under section 80HHC to the assessee-company on export benefits received in the shape of duty draw back, cash assistance and profit on sale of replenis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein. The Tribunal while deciding the case has derived the support from the judgment of Hon'ble Kerala High Court in the case of Baby Marine (Eastern) Exports, 262 ITR 88 the case may not be equally identical in all respects, however, the ratio laid down therein can be applied and that is one of the ways to decide a case. It is also to be noted that the decision relied upon by the Tribunal now stands approved by the Hon'ble Supreme Court in the case of CIT v. Baby Marine, 290 ITR 323 and the decision relied upon by the revenue while arguing the case of Sharda Exports stands overruled. It is incorrect to hold that the Tribunal in the case of Sharda Exports has tried to "legislate" or "Filing causas omissus". The Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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