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TMI Blog2005 (2) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction under the said provision at 5 per cent, of export turnover was claimed in the light of the increase in turnover of garments and ossein goods. The Assessing Officer was of the view that though the export turnover had increased in relation to the aforementioned commodities over the export turnover of the preceding previous year, as there was a decline in the third commodity of export as compared to the export for the immediately previous year, the assessee was not entitled to deduction at the rate of 5 per cent. In other words, according to the Assessing Officer, the total export turnover of the year under consideration was lower than the total export turnover for all the three items taken together in the immediately preceding previous year and hence, the additional deduction at the rate of 5 per cent, was not available to the assessee. The assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals), who for the reasons stated in the order of September 19, 1988, allowed the appeal on this ground and held that the assessee was entitled to deduction under section 80HHC(1)(b) of the Act. The Tribunal has extensively reproduced the reasoning adopted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1983 and reads as under: "80HHC. Deduction in respect of export turnover.-(1) Where the assessee, being an Indian company or a person (other than a company) who is resident in India, exports out of India during the previous year relevant to an assessment year any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, the following deductions, namely: (a) a deduction of an amount equal to one per cent, of the export turnover of such goods or merchandise during the previous year; and (b) a deduction of an amount equal to five per cent, of the amount by which the export turnover of such goods or merchandise during the previous year exceeds the export turnover of such goods or merchandise during the immediately preceding previous year. (2)(a) This section applies to all goods or merchandise [other than those specified in clause (b)] if the sale proceeds of such goods or merchandise exported out of India are receivable by the assessee in convertible foreign exchange. (b) The goods or merchandise referred to in clause (a) are the following, namel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said interpretation does not flow from a plain reading of the said clause. Firstly, the requirement of total export turnover does not appear from the provision and it is well-settled that a court is not empowered to import anything in the statute, unless and until without doing so the pro vision does not make sense. In the present case, that is not the situation. Without adding the term "total" before the phrase "export turnover", it is possible to make out the legislative intent. The underlying idea behind clause (b) of sub-section (1) of section 80HHC of the Act is to reward an exporter by way of additional deduction at the rate of 5 per cent, of the export turnover in cases where such export turnover exceeds the export turnover of the same items or commodities which were exported during the immediately preceding previous year. In other words, for becoming entitled to additional deduction, an assessee has to establish that, (a) the assessee had exported the same items or commodities in the year under consideration and in the immediately preceding previous year; (b) the export turnover of such items, identifying commodity wise, exceeds the export turnover of the same item/commod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are qualifying goods and which formed part of the export turnover in the immediately preceding previous year. This interpretation flows on a plain reading of the provisions and gets support when sub-section (3) of section 80HHC of the Act is read in the overall scheme of the provision. The interpretation as placed hereinbefore is in consonance with Circular No. 372, dated December 8, 1983, which gives the Explanatory notes on the provisions relating to direct taxes as incorporated in the Finance Act, 1983. In para. No. 42.2(iii), this is what is stated: "42.2(iii) The tax concession at (b) above will be available only if the assessee has exported out of India any qualifying goods or merchandise during the previous year immediately preceding the relevant previous year for which the deduction is claimed. In other words, if an assessee newly enters the export trade during a particular year, he will be entitled for that year only to the concession contained at (a) and not the concession at (b) above." The decision of the High Court of Calcutta, on which learned counsel for the Revenue has placed reliance, was dealing with a converse situation. In the case before the Calcutta High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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