TMI Blog2003 (7) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... ods which are exported out of India and hence would not be export turnover under Explanation (B) to section 80HHC of the Income-tax Act, 1961?" The other questions proposed in the application were rejected. Thereafter the petitioner has also moved an application under section 256(2) of the Income-tax Act, 1961, before us and raised the following questions: "1. Whether the learned Tribunal was right in law in holding that the action by the Commissioner of Income-tax under section 263 of the Income-tax Act, 1961, is with jurisdiction? 2. Whether, on the facts, in totality of the circumstances and in view of detailed explanations/clarifications, the learned Tribunal was right in law in holding that remittances received by the assessee in convertible foreign exchange from abroad as advertisement charges were not on account of sale proceeds of any goods which are exported out of India and hence would not be export turnover under Explanation (B) to section 80HHC of the Income-tax Act, 1961? 3. Whether the learned Tribunal was right in law in directing the Assessing Officer to recompute the deduction as per the decision of the Special Bench. 4. Whether the learned Tribunal wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of the amount received from abroad against advertisement. He further submits that when two views are possible the Commissioner of Income-tax cannot set aside the order of the Assessing Officer under section 263 of the Income-tax Act, 1961. He also submits that the Tribunal has confirmed the order of the Commissioner of Income-tax on the basis that it does not come under the definition of export turnover given in sub-section (4B) of section 80HHC. Mr. Ranka placed reliance on the decisions published in CIT v. Trinity Hospital [1997] 225 ITR 178 (Raj) ; Associated Cement Companies Ltd. v. Commissioner of Customs [2001] 124 STC 59 (SC) ; H. Anraj v. Government of Tamil Nadu [1986] 61 STC 165 (SC); P. S. Apparels v. Deputy CTO [1994] 94 STC 139 (Mad) ; Scientific Engineering House Pvt. Ltd. v. CIT [1986] 157 ITR 86 (SC) and State of Andhra Pradesh v. National Thermal Power Corporation Ltd. [2002] 127 STC 280 (SC). Mr. Mathur, learned counsel for the Department, submits that whatever the goods the assessee exports in the form of journal, he got deduction under section 80HHC. He further submits that if any information or advertisement is to be published at the instance of non-resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yed and for the purpose of collecting the charges, necessary intimation in regard thereto is given to the advertiser. The same, in general terms, is considered a service rendered by the media to the advertiser for a monetary consideration and this is what the assessee has done. So far as the remittance in convertible foreign exchange, but it was in lieu of the advertisement so published in journal and not in lieu of the supply of journal. The contention of the assessee of the payment in convertible foreign exchange in lieu of supply of goods is misconstrued inasmuch as firstly, there was no supply of goods or export business done by the assessee who otherwise was engaged in publication of journal, and, secondly the payment of convertible foreign exchange was in lieu of the advertisement published, which constituted advertisement charges and not in lieu of supply of any goods outside India. It may also be stated that whenever there is export of goods abroad, there will be purchasers placing orders for such goods and sellers supplying the goods in regard to sales abroad either independently or in lieu of orders received. In the instant case, there was no iota of evidence to show an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in allowing the claim of the assessee in full as claimed. In the light of the above findings, it is not necessary for us to analyse the decision cited on behalf of the assessee relating to the meaning of word 'goods'. However, it is necessary to deal with the contention raised on behalf of the assessee that the advertisement charges were received by the assessee on account of composing, printing and sale thereof. The contention of learned counsel that the advertisement charges are for supply of the composed and printed material and, therefore, the receipts on account of advertisement charges were on account of sale of goods does not appeal to us. Advertisement charges are paid by the customers for inserting the advertisement in the journal. The very fact that the customers pay substantial amounts as advertisement charges when compared to the cost of printing goes very much against the theory advanced before us that such charges are paid for composing, printing and supply of printed copy of advertisement material. When the cost of composing, printing and supply of printed material is considerably low, a question arises as to why a customer would pay a high price to the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso deriving income from other than exports. In such cases, export profits for the purposes of allowance 0 deduction under section 80HHC are to be computed as per the following formula: Total profits x Export turnover Export Profit = ------------------------------------------- Total turnover We have gone through the certificate issued by the chartered accountant, in respect of the assessment years 1991-92 and 1992-93 and find that in computing the export turnover the definition as per the Explanation after section 80HHC( 4A) has been ignored, the learned chartered accountant has misunderstood. Explanation (b) to section 80HHC reads as under: 'Export turnover' means the sale proceeds received in, or brought into India by the assessee in convertible foreign exchange in accordance with clause (a) of sub-section (2) of any goods or merchandise to which this section applies and which are exported out of India, but does not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962)." The Commissioner of Income-tax as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment years 1991-92 and 199293, the assessee has received some amount against the subscription and advertisement. The details thereof are as follows: Subscription Rs Advertisement Rs. Assessment year 1991-92 Indian 9,150 1,36,243 Foreign 12,386 4,49,797 Assessment year 1992-93 : Indian 52,221 10,17,992 Foreign 43,824 15,55,742 Sub-section (1) of section 80HHC provides that whether the assessee being an Indian company or a person resident in India is engaged in the business of "export out of India of any goods or merchandise" to which this section applies, there shall be a deduction in computing the total income of the assessee to the extent of profit referred to in sub-section (18) derived by the assessee from the export of such goods or merchandise. The details of percentage of deduction of benefit have been given in sub-section (18). The benefit has been given on the basis of export turnover which has been defined in clause (b) of Explanation to sub-section (48) of the Act which reads as under: " 'export turnover' means the sale proceeds received in, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n export of goods by the assessee. It is true, there was an export of the magazine Diamond World but against that, the assessee has received the amount in the form of subscriptions and for the amount of subscription, the deduction under section 80HHC has been allowed by the Assessing Officer and has not been disturbed by the Commissioner of Income tax and the Tribunal. The amount received against that advertisement in that magazine by no stretch of imagination can be treated as amount received against the "export of goods". Mr. Ranka further argued that when two views are possible and if some view has been taken by the Assessing Officer, the Commissioner of Income-tax has no jurisdiction to initiate the proceedings under section 263 of the Act, 1961. We agree with Mr. Ranka that if two views are possible and if any possible view has been taken by the Assessing Officer, that should not be disturbed under section 263 of the Act, 1961. In our considered view the Assessing Officer has gone absolutely wrong in allowing the benefit of section 80HHC on the amount received against the advertisement from abroad. The wrong view which has been taken by the Assessing Officer cannot be allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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