TMI Blog2004 (10) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... ation is to be taken as part of the total turnover which has an element of profit therein, and, accordingly, the receipts of excise duty and sales tax which do not include an element of profit should be excluded from the "total turnover". – no infirmity in tribunal’s order - - - - - Dated:- 15-10-2004 - Judge(s) : P. D. DINAKARAN., S. R. SINGHARAVELU. JUDGMENT The judgment of the court was delivered by P.D. Dinakaran J. - In this appeal, the following substantial questions of law were raised for determination: "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that excise duty does not form part of the total turnover for the purpose of calculation of deduction under section 80HHC o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in the business of export of any goods, there shall be allowed in computing the total income of the assessee, a deduction of the profits derived by the assessee from the export of such goods. In other words, in computing the total income of such an assessee, profits derived by the assessee from the exports are deductible. The above expression namely, 'profits derived from exports' also find a place in section 80HHC(3)(a). It says that where the export is of goods, the profits derived from such export shall be the amount which bears to the profits of the business, the same proportion as the export turnover in respect of such goods bears to the total turnover of the business. In fact, the earlier section 80HHC(3) consisted of two part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of CIT v. Chloride India Ltd. [2002] 256 ITR 625 and the Kerala High Court in the case of CIT v. K. Rajendranathan Nair [2004] 265 ITR 35, wherein it is held that in computing the special deduction under section 80HHC of the Act, in respect of profits from export business, while determining the proportion of export turnover to total turnover, since octroi, sales tax and excise duty are excluded from the export turnover, they should be excluded from the figure of "total turnover", as it is a settled law that the words of a statute, where there is a doubt about their meaning, are to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the Legislature has in view. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Chowringhee Sales Bureau P. Ltd. v. CIT and in the case of Sinclair Murray and Co. P. Ltd. v. CIT [1974] 97 ITR 615? In the case of Chowringhee Sales Bureau P. Ltd. [1973] 87 ITR 542 (SC), the issue was whether the sales tax collected by an auctioneer who issued cash memos showing itself as seller was to be excluded from the assessee's business income. In that context, their Lordships of the Supreme Court held that the sum of Rs. 32,986 realised as sales tax by the assessee in its character as an auctioneer forms part of its trading or business receipts. The discussion was more on the issue that the sales by an auctioneer was a sale for the purposes of the Sale of Goods Act and the amount collected by it was as a dealer and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the definition given for turnover included "the total amount set out in the bill of sale (or if there is no bill of sale the total amount charged) as the consideration for the sale or purchase of goods (whether such consideration be cash, deferred payment or any other thing or value) including any sum charged by the dealer for anything done in respect of goods sold at the time of or before the delivery of the goods and any other sums charged by the dealer, whatever be the description, name or object thereof". The said definition would clearly indicate that the total amount charged as the consideration for the sales would have to be taken into account for determining the turnover. The word "turnover" as defined under the Sales Tax Act, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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