TMI Blog2016 (7) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... er Versus Shri. Abraham P. George, Accountant Member For the Assessee : Shri. S. Sridhar, Advocate For the Revenue : Dr. P. K. Srihari, Addl. CIT ORDER Per Abraham P. George, Accountant Member In this appeal filed by assessee, its grievance is that it was not given the deduction claimed u/s.10B of the Income-tax Act, 1961 ( the Act in short). 02. Facts apropos are that assessee engaged in manufacturing and exporting of automotive components had filed its return for the impugned assessment year declaring income of ₹ 20,21,471/- after claiming deduction u/s.10B of the Act. Deduction claimed u/s.10B of the Act, was ₹ 2,91,91,134/-. During the course of assessment proceedings it was found by the AO that assessee though it had exported goods out of India, it had not realised the export proceeds in foreign currency from Toyota Tsusho India P. Ltd, ( TTIPL in short). TTIPL had given the money in Indian currency. Assessee was unable to produce the foreign inward remittance certificate for the money received by it on the exports. Assessee stated that it was registered as an EOU by the competent authority in Cochin. As per the assessee, competent author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed a copy of the order of the Tribunal. However according to the Ld. AR, Tribunal while deciding the issue in favour of the Revenue had relied on another coordinate bench decision in Tata Elxsi Ltd, v. ACIT[(2008) 1 DTR 237]. Contention of the Ld. AR was that Tata Elxsi Ltd, had moved in further appeal before the Hon ble jurisdictional High Court. Hon ble jurisdictional High Court in its judgment dt.20.10.2014 in ITA.411/2008, had over turned the decision of the Tribunal. As per the Ld. AR, their Lordship after considering clause 6.11 of EXIM policy, had held that benefits of Section 10A of the Act could be given even if the assessee was not a direct exporter but exported through another STP unit which received foreign exchange. Thus according to him, Tribunal decision in assessee s own case, in which reliance was placed on the decision of coordinate bench in the case of Tata Elxsi Ltd (supra), could no more be applied for the impugned assessment year. As per the Ld. AR, based on the judgment of Hon ble jurisdictional High Court in the case of Tata Elxsi Ltd (supra), assessee would be eligible for deduction u/s.10B of the Act. According to him it is clear from the FIRC certific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting manufacturer the other issues relating to allowing deduction u/s.10B viz., realization of export proceeds etc., become academic. Liberal interpretation, as suggested by the learned counsel for the Assessee, cannot be to the extent of conferring benefit of deduction which the law does not contemplate. 17. In this regard, we also find that the Bangalore Bench of the ITAT in the case of M/S.Granite Mart (supra) has taken an identical view in the case of an Assessee EOU who claimed deduction u/s.10B of the Act in respect of exports made through third party. The Tribunal relying on the decision of the ITAT Bangalore in the case of TATA Elxsi Ltd. Vs. ACIT 115 TTJ 423 (Bang) held that deduction u/s.10B of the Act is not available in respect of exports made through third parties. In the case of TATA Elxsi Ltd. (supra), the assessee was a Software Technology Park unit. During the relevant assessment year, the assessee had made certain sales to M/s Texas Instruments India Ltd., which was also a registered STP. This transaction, assessee had claimed, as export for the purposes of s. 10A. This was not accepted by the AO and subsequently confirmed by the learned CIT(A). Before Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the total products. The Exim Policy 2002-07 (Chapter 6, cl. 6.12) also clarifies other entitlements as under : 6.12 Other entitlements of EOU/EHTP/STP/ BTP units are as under : (a) Exemption from income-tax as per ss. 10A and 10B of IT Act. Further, from the perusal of the Exim Policy (Chapter 6) extracted above, it is seen that whatever benefit given should be as per the provisions of ss. 10A and 10B of the IT Act. Apart from the benefit conferred under the aforesaid chapter, nothing has been indicated in respect of any deemed export when the issue is considered under the IT Act. The Exim Policy extracted above (Chapter 8.1 and 8.3) obviously does not include in respect of benefit to be given under IT Act other than one referred to under Chapter 6.12(a). When this being consciously omitted in the policy, we do not find any force in the stand taken by the learned counsel for assessee to treat the sales effected to other STP by the assessee as deemed export. This ground fails. 18. The aforesaid decision of the Tribunal is clearly an answer to the arguments put forth by the learned counsel for the Assessee before us. We are therefore of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STP/BTP units in regard to such exports shall be reckoned on basis of price at which goods are supplied by ECUs to other Exporter or other EOU/EHTP/STP/RTP/SEZ unit. e) All export entitlements, including recognition as Status Holder would accrue to exporter in whose name foreign exchange earnings are realized. However, such export shall be counted towards fulfillment of obligation under EOU/EHTP/ STP/ BTP scheme only. 20. From the aforesaid provisions , it is clear that if a assessee wants to claim the benefit of Section 10A, firstly he must export articles or things or computer software. Secondly, the said export may be done directly by him or through other exporter after fulfilling the conditions mentioned therein. Thirdly, such an export could yield foreign exchange which should be brought into the country. If all these three conditions are fulfilled, then the object of enacting Section 10A is fulfilled and the assessee would be entitled to the benefit of exemption from payment of Income Tax Act on the profits and gains derived by the Undertaking from the export. 21. Clause 6.11 of Exim Policy dealing with entitlement for supplies from the DTA states that supp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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