TMI Blog2004 (3) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... n the alternative, under section 80-O of the Income-tax Act, 1961 (hereinafter referred to as "the Act" for short), in the assessment of the assessment year 1996-97. The history of adjudication: The history of adjudication proceedings of the case can be stated quite 1ortly before touching the question of law involved in the present appeal. The assessee in this case is an individual by status and is a leading producer of Hindi films. The assessee has filed his return of income for the assessment year 1996-97 on October 30, 1996, declaring his income in the sum of Rs. 9,60,970 and claiming deduction of Rs. 84,36,746 under section 80HHC in respect of export of beta-earn tapes with rights attached thereto. The assessee claimed to have entered into an agreement dated March 29, 1995, with Satellite Television Asian Region Ltd. (popularly known as "Star 'IV") to grant the sole and exclusive rights of satellite broadcasting and pay 'IV through Star 'IV satellite for Asian region only in respect of the films mentioned therein. The assessee by virtue of the said agreement transferred beta-earn tapes of 14 films mentioned in the said agreement, to be exploited in the manner mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 80-O of the Act. The Tribunal, after hearing the rival contentions, vide its order dated November 15, 1999, did not accept any of the contentions raised by the assessee with respect to his right to claim deductions either under section 80HHC or section 80-O of the Act. The Tribunal affirmed the views of the Assessing Officer as well as those of the Commissioner of Income-tax (Appeals) with respect to these two deductions as claimed by the assessee. According to the Tribunal, the assessee was neither engaged in the business of export of goods or merchandise nor did he export the same by way of sale or otherwise during the year under appeal. The reasons recorded by the Tribunal in support of its findings can be summarised as under: (i) There was no sale as envisaged in section 80HHC considering the definition of "export turnover" referred to in clause (b) of sub-section (4B) of the said section. (ii) There are no goods/merchandise as envisaged in section 80HHC (iii) Rules 9A and 9B of the Income-tax Rules have no application as the fiction created thereunder has a limited purpose and the object of finding out the cost of the film. (iv) Section 80HHF has been broug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinbelow for immediate reference. The preamble to the agreement reads as under: "Whereas the party of the first part have acquired the rights of the several films covered under this agreement from M/s. AG. Films (P) Ltd. Bombay, for the rights of exploitation agreed to be entrusted under this agreement and the party of the first part are fully empowered to grant the said rights, i.e., Star TV satellite rights and pay TV rights through Star TV satellite for Asian region only and enter into this agreement. And whereas the party of the second part have approached the party of the first part shown their interest for acquiring Star TV satellite broadcasting and transmission rights and rights for pay TV through Star TV satellite broadcasting of and relating to the 'said films' for and in the Asian region only; And whereas at the request of the party of the second part, the party of the first part have agreed to grant to the party of the second part the sole and exclusive rights of satellite broadcasting and pay TV only through Star TV satellite for Asian region only in respect of the said films. For the purpose of broadcasting through Star TV satellite, the right includes sub-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Act was amended from time to time and sections 80HHC and 80-O came to be enacted. Section 80HHC: With a view to encouraging larger exports of certain goods, the Finance Act, 1982, had inserted section 89A in the Income-tax Act with effect from June I, 1982, for providing tax relief to Indian companies and non-corporate taxpayers resident in India whose export turnover for a year exceeds the export turnover for the immediately preceding year by more than 10 per cent thereof. The Finance Act, 1983, has omitted the aforesaid provisions with effect from April 1, 1983. Simultaneously, a new section 80HHC came to be inserted with effect from the same date for providing a deduction with reference to the export turnover. The said section 80HHC remained operative for the assessment years 1983-84 to 1985-86. The Finance Act, 1985, has again substituted section 80HHC with a new section 80HHC with effect from April 1, 1986. Section 80HHC has been further amended by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986, with effect from April 1, 1987, and remained operative for the assessment years 1987-88 and subsequent years. By the Direct Tax Laws (Amendment) Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank outside India with the approval of the Reserve Bank of India. Explanation 2.-For the removal of doubts, it is hereby declared that where any goods or merchandise are transferred by an assessee to a branch, office, warehouse or any other establishment of the assessee situate outside India and such goods or merchandise are sold from such branch, office, warehouse or establishment, then, such transfer shall be deemed to be export out of India of such goods and merchandise and the value of such goods or merchandise, declared in the shipping bill or bill of export as referred to in sub-section (1) of section 50 of the Customs Act, 1962 (52 of 1962), shall, for the purposes of this section, be deemed to be the sale proceeds thereof. (3) For the purposes of sub-section (1),- (a) where the export out of India is of goods or merchandise manufactured or processed by the assessee, 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 carried on by the assessee; (b) where the export out of India is of trading goods, the profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962); (ba) 'total turnover' shall 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) : Provided that in relation to any assessment year commencing on or after the 1st day of April, 1991, the expression 'total turnover' shall have effect as if it also excluded any sum referred to in clauses (iiia), (iiib) and (iiic) of section 28; (baa) 'profits of the business' means the profits of the business as computed under the head 'Profits and gains of business or profession' as reduced by- (1) ninety per cent of any sum referred to in clauses (iiia), (iiib) and (iiic) of section 28 or of any receipts by way of brokerage, commission, interest, rent charges or any other receipt of a similar nature included in such profits; and (2) the profits of any branch, office, warehouse or any other establishment of the assessee situate outside India;" Section 80-O: Section 80-O came to be enacted basically for encouraging Indian companies to export their know-how and ski ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf. Explanation. - For the purposes of this section,- (i) 'convertible foreign exchange' means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the law for the time being in force for regulating payments and dealings in foreign exchange; (ii) 'foreign enterprise' means a person who is a non-resident. (iii) services rendered or agreed to be rendered outside India shall include services rendered from India but shall not include services rendered in India." Section 80HHF : Section 80HHF came to be inserted by the Finance Act, 1999, with effect from April 1, 2000, with a view to provide deduction to Indian companies from profits and gains convertible in foreign exchange from export or transfer by any means out of India of any film software, television software, music software, television news software, including telecast rights. Section 80HHF reads as under: "80HHF. Deduction in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevision software", "export turnover", "profits of the business" and "total turnover" have been defined. Income-tax Rules: At this juncture, it is also necessary to refer to the relevant part of rules 9A and 9B of the Income-tax Rules providing for deduction in respect of profits and gains arising from the business of production of feature films carried on by a person. The present rules 9A and 9B of the Income-tax Ru1es read as under: "9A. Deduction in respect of expenditure on production of feature films.-(1) In computing the profits and gains of the business of production of feature films carried on by a person (the person carrying on such business hereafter in this rule referred to as film producer), the deduction in respect of the cost of production of a feature film certified for release by the Board of film censors in a previous year shall be allowed in accordance with the provisions of sub-rule (2) to sub-rule (4)... 98. Deduction in respect of expenditure on acquisition of distribution rights of feature films.-(1) In computing the profits and gains of the business of distribution of feature films carried on by a person (the person carrying on such business hereafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trade or not. The definition of the word "merchandise" as defined in the Law Lexicon, is a term covering all articles of commerce; the objects of commerce; the subjects of commerce and traffic; any article which is the object of commerce, or which may be bought or sold in trade; all kinds of personal property which can be bought and sold in the market, as such beta-earn tapes can be treated as goods or chattel under the Sale of Goods Act, 1930. That section 80HHC gives certain incentives for the export of goods out of India. The main purpose is to augment the foreign exchange reserves of the country. The incentive provision of tax laws, must be construed liberally, it being an incentive provision. That the Bombay Sales Tax Act provides that any property, tangible or intangible, general or special, which can be transferred for a price, is "goods". In this view of the matter, exhibition rights in respect of films, which are transferable rights, could also constitute goods. As such, export of exhibition rights can very well be covered by the phrase" goods" for the purpose of export under section 80HHC. That under the Customs Act and also under the Indian Trade Classification (wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person, (the person carrying on such business hereafter in this rule referred to as film producer)..." and rule 9B specifically provides deduction in respect of expenditure on "acquisition of distribution rights of feature films..." Hence the above rules ought to have been taken into consideration while computing the income arising from the above business of film production and acquisition of distribution rights of the film. Once the above rules have been applied for computing the income, then only, the provision of section 80HHC comes into play. That the word "sale proceeds" must be given a broad meaning particularly considering the nature of the goods in question. It must be understood as export proceeds. In the case of films which are known for their short life, i.e., more than 90 per cent. of the films, die a natural death within a year, when one talks about transferring interest in exhibition rights for ten years, for all practical purposes, it is a sale. Because of this non-durable nature of films and rights therein, rule 9A while providing the method of computing the profits in respect of films provides as follows: "9A. (7) For the purposes of this rule,-... (i) the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le proceeds should be brought into India within six months. There is nothing either in sub-section (1) or sub-section (2) that export out of India must be by way of sale. As long as there is export of goods by sale or otherwise, sub-section (1) would be applicable and one would be entitled to deduction under the said provision. That it is no doubt true that the word "export turnover" has been defined to mean "sale proceeds" received or brought in to India by way of export in convertible foreign exchange. However, in the definition of "export turnover" the emphasis is on foreign exchange and bringing it into India. The emphasis is on receipt of export proceeds. In other words, the general meaning of "business turnover" necessarily includes not only sale proceeds but everything received in the course of business. The emphasis is not on the sale but the emphasis is on the bringing of export proceeds in foreign exchange, which can be illustrated by citing the definition of "export out of India" where the words used are "sale or otherwise": "'export out of India' shall not include any transaction byway of sale or otherwise, in a shop, emporium, or any other establishment situate in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nders services from India to its principals situated outside India, therefore, it is eligible to claim deduction under section 80-O of the Act. That the provision of section 80-O being an incentive provision should be construed liberally so as to advance the object of the legislation. That the copyright subsists in cinematograph films as defined under section 13 of the Copyright Act, 1957. The registration of the copyright is not compulsory. The Ministry of Law, Justice and Company Affairs, has expressed its opinion that the copyright is covered by section 80-O, as such, the assessee was entitled to deduction under section 80-O and the same has been wrongly denied by the authorities under the Act. The receipt of consideration by the assessee was as a result of sale and even if the term "any similar payment" is wide enough to include sale proceeds which are received by the assessee under the agreement in question dated March 29, 1995, as such, the assessee was entitled to claim deduction under section 80-O of the Act. Per contra: The rival views canvassed on behalf of the Revenue to repel the contentions of the assessee can be summarised as under: That the assessee in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is available on a plain reading of the statutory provision. If the plain reading of the provision of section 80HHC is applied to the facts of the present case, the assessee is not entitled to claim any deduction under either of the sections. The word "otherwise" used in Explanation (aa) to sub-section (4A) in the context of this section has to be given limited and restricted meaning to mean sale only. That section 80HHF is introduced to cover cases of persons like the assessee; as such section 80HHC did not and does not get attracted to the facts of the present case. That the judgments cited on behalf of the assessee deal with the provisions of the Sales Tax Act and the Customs Act; as such, the said judgments cannot be pressed into service to interpret the provisions of the Income-tax Act. No deduction under section 80HHC can be allowed unless it is established that there was a sale that too of goods or merchandise and there was export and proceeds received out of such transaction were in the nature of sale proceeds and were received in convertible foreign exchange as contemplated under said section. That rules 9Aand 9B have no application to the facts of the case. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C, one has to satisfy the following conditions: (1) If goods are taken from India to outside India, it amounts to "export" ; in this context the following two provisions of section 80HHC are that the export out of India shall not include any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situated in India, not involving clearance at any customs station as defined in the Customs Act, 1962. And it has been clarified in the Explanation to section 80HHC(2) that where any goods or merchandise are transferred by a taxpayer, to a branch, office, warehouse or any other establishment of the taxpayer situated outside India, and such transfer effected by the assessee shall be deemed to be export out of India. The value of such goods or merchandise declared by the assessee in the shipping bill or bill of export shall be deemed to be the sale proceeds of the goods for the purpose of allowing the deduction. (2) To get deduction under section 80HHC, one has to export eligible "goods" or "merchandise". (3) The sale proceeds of the eligible goods or merchandise exported out of India must be received in, or brought into, India by the assessee in convert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded beta-earn tape as goods. Exchange Control Declaration Form No. AJ, also described it as goods. The Customs Department which is another wing of the Ministry of Finance has treated the beta-earn tape as goods for imposition of duty. Section 12 read with section 2(22)(e) of the Customs Act, 1962, imposes duty on goods imported into and exported out of India. If they are goods or merchandise for the purposes of levy of customs duty, obviously, they can be treated as goods for claiming exemption from payment of income-tax. Learned counsel supporting the assessee contend that it is well settled that two wings of the Government cannot take two different views of the same transaction. According to them, two wings i.e., Customs and Income-tax are part of the same Ministry. In order to claim support to their submission, learned counsel for the assessee relied upon the judgment of the Delhi High Court in the case of CIT v. Shriram Pistons and Rings Ltd. [1990] 181 ITR 230, where-in the High Court ruled that when remuneration is approved by the Company Law Board of the Department of Company Affairs as required by the Companies Act, the Income-tax Department cannot take a contrary view th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said Act do not define the word "goods" or "merchandise". In the absence of any statutory guidelines under the Act, the dictionaries can be consulted to find out the meaning of the particular word or phrase. It is well settled that in the absence of there being anything contrary to the context, the language of a statute should be interpreted according to the plain dictionary meaning of the terms used therein. Though the dictionaries are not to be taken as authoritative exponents of the meaning of the statutory language, it is permissible to seek instruction from these books to understand the ordinary sense of the words in an enactment. At this juncture we are reminded of what Samuel Johnson, a great English poet, critic, essayist and dictionary maker, has stated: "Dictionaries are like watches, the worst is better than none, and the best cannot be expected to go quite true. Every honest lexicographer agrees knowing that no matter how keenly he strives to make his book 'go true' he would inevitably lose the battle with what might be called linguistic indeterminacy. Since indeterminacy will be the prima facie of his professional life, he will often be tempted to deny and res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icted meaning. as are ordinarily the objects of trade and commerce. But the term Items of merchandise, supplies, raw is generally not understood as materials, or finished goods.Sometimes including real estate, and is the meaning of "goods" is extended to rarely applied to provisions such include all tangible items, as in the as are purchased day by day phrase "goods and services." for immediate consumption (e.g., food). Goods All things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities and things in action. Also includes the unborn of animals and growing crops and other identified things attached to realty as fixtures. U.C.C. $ 2-105(1). All things treated as movable for the purposes of a contract of storage of transportation. U.C.C. $ 7-1O2(1)(f). ------------------------------------------------------------------------------------ In the Shorter Oxford English Dictionary, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cassette is several times more than the value of the blank cassette. However, if a pre-recorded music cassette or a popular film or a musical score is imported into India, duty will necessarily have to be charged on the value of the final product. In this behalf we may note that in State Bank of India v. Collector of Customs [2000] 115 ELT 597 (SC) ; [2000] 1 Scale 72 the bank had, under an agreement with the foreign company, imported a computer software and manuals, the total value of which was US $ 4,084,475. The bank filed an application for refund of customs duty on the ground that the basic cost of software was US $ 401,047, while the rest of the amount of US $ 3,683,428 was payable only as a licence fee for its right to use the software for the bank country wide. The claim for the refund of the customs duty paid on the aforesaid amount of US $ 3,683,428 was not accepted by this court as in its opinion, on a correct interpretation of section 14 read with the rules, duty was payable on the transaction value determined therein and as per rule 9, in determining the transaction value, there has to be added to the price actually paid or payable for the imported goods, royalties an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r-readable disc becomes a readily merchantable commodity. Similarly, when a professor delivers a lecture, it is not a goods, but, when transcribed as a book, it becomes a "goods". That a computer program may be copyrightable as intellectual property does not alter the fact that once in the form of a floppy disc or other medium, the program is tangible, movable and available in the market place. The fact that some programs may be tailored for specific purposes need not alter their status as "goods" because the code definition, includes "specially manufactured goods"'." The term "movable property" has been construed by the apex court in the case of CST v. Madhya Pradesh Electricity Board [1970] 25 STC 188; AIR 1970 SC 732. The Supreme Court has held that the term 'movable property' cannot be construed in a narrow sense. Merely because electrical energy is not tangible and cannot be moved or touched, for instance, like a book or piece of wood, does not mean that it ceases to be movable property. The electrical energy has all the attributes of movable property inasmuch as it can be transmitted, transferred, delivered, stored and possessed in the same way as other movable property. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of customs clearance. No material or things or goods can cross customs borders, unless they go through the gamut of customs clearance. There is no dispute, rather any dispute, so far as this aspect of the matter is concerned, though other serious issues were raised by the Revenue in support of their contentions. It is, thus, not in dispute that the export of beta-cam tape was subjected to customs clearance. The condition precedent for claiming deduction under section 80HHC is that the transaction must result in export out of India of any goods or merchandise. The phrase 'export out of India' has been defined in clause (aa) in the Explanation to sub-section (4A). The apex court has considered this clause in the case of CIT v. Silver and Arts Palace [2003] 259 ITR 684, wherein the apex court has observed that for the purposes of special deduction under that section there will be no export out of India; if two cumulative conditions are fulfilled, viz., (a) the transaction is one by way of sale or otherwise in a shop, etc., situated in India, and (b) it does not involve clearance in any customs station as defined in the Customs Act. Since, in that case, the transaction of counter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learance at any customs station as defined under the Customs Act, 1962. The concept is defined by using two negatives. Two negatives make the sentence positive. The positive meaning of the term, which is judicially recognised by the apex court in the case of Silver and Arts Palace [2003] 259 ITR 684 is that any sale of an article on counter shop, emporium or other establishment situated in India and if, ultimately, that article has been taken out of India subjecting it to customs clearance, it would amount to export out of India. Now another question is what do you mean by way of "sale or otherwise". The word "sale" is not defined in the Act, therefore, it must be given its ordi1ary grammatical meaning. According to the Oxford Dictionary, "sale" means an act of selling or making over to another for a price. It has also been defined as an exchange of a thing for a price. The ordinary concept of "sale" of a movable property is that something is handed over for a price as a result of negotiation and agreement. In a "sale" there is an agreement between the parties whereby one person known as the seller hands over a thing or property to the other person known as the buyer for a consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to cover other cases which may not come within the meaning of the preceding clauses, for example, a case where the tenant's occupation has ceased as a result of trespass by a third party. The Legislature...intended to cover all possible cases of vacancy occurring due to any reasons whatsoever. Hence, far from using those words ejusdem generis with the preceding clauses of the Explanation, the Legislature used those words in all inclusive sense". (Vinayakrao v. State of Maharashtra, AIR 1976 Born 10 (12, 13); [1975] Mah LJ 566). The word "otherwise" has also been interpreted by the Supreme Court in the case of Ganesh Prasad Dixit v. CST [1969] 24 STC 343; AIR 1969 SC 1276 to hold that the word "otherwise" includes anything other than the sale. In the case of George Da Costa v. CED [1967] 63 ITR 497, the Supreme Court ruled that the word "otherwise" should be construed ejusdem generis, and it must be interpreted to mean some kind of legal obligation or some transaction enforceable at law or in equity which, though not in the form of a contract, may confer a benefit on the donor. The tolls may be let by public auction, or otherwise than by public auction. Where the procedure of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al amendment. The Statement of Objects and Reasons of the Constitution (Forty-sixth Amendment) Act, 1982, amongst others states as under: "6. Device by way of lease of films has also been resulting in avoidance of sales tax. The main right in regard to a film relates to its exploitation and after exploitation for a certain period of time, in most cases, the film ceases to have any value. It is, therefore, seen that instead of resorting to the outright sale of a film, only a lease or transfer of the right to exploitation is made. 7. There were reports from State Governments to whom revenues from sales tax have been assigned, as to the large scale avoidance of Central sales tax leviable on inter-State sales of goods through the device of consignment of goods from one State to another and as to the leakage of local sales tax in works contracts, hire-purchase transactions, lease of films, etc. Though Parliament could levy a tax on these transactions, as tax on sales has all along been treated as an item of revenue to be assigned to the States, in regard to these transactions which resemble sales also, it is considered that the same policy should be adopted." It is, thus, clear th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find out in what sense the words "sale proceeds" came to be used in the statute adopting well known settled principles of interpretation of the statute. The apex court in the case of CIT v. Strawboard Mfg. Co. Ltd. [1989] 177 ITR 431 ruled that the law providing for concession for tax purposes should be liberally construed. The question before the apex court was whether straw board could be said to fall within the expression "paper and pulp" mentioned in the schedule relevant to the respective assessment years. The apex court held that since the words "paper and pulp" were mentioned in the schedule, the intention was to refer to the paper and pulp industry and since the strawboard industry could be described as forming part of the paper and pulp industry, it was entitled to the benefit. In the case of Bajaj Tempo Ltd. v. CIT [1992] 196 ITR 188 the apex court adopted the same principles of interpretation and ruled that the initial exercise should be to find out as to whether the transaction is within the sweep of the statute. Once a conclusion is reached that the transaction is within the sweep of the statute, then the provision should be applied reasonably and liberally keeping ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purport of section 80-O of the Act. The circular dated August 3, 1990, which was issued by the Central Board of Direct Taxes to explain the substance of the provisions relating to direct taxes in the Finance Act, 1990. One of such provisions explained therein is section 80HHC of the Act. Thus, to explain the scheme and various shades of section 80HHC read with section 28, as amended by the Finance Act, came to be illustrated by the following examples: ------------------------------------------------------------------------------------------- Case I Case II Case III Case IV Exclusively 2/3rd export 1/3 1/2 export 1/2 1/3 export 2/3 export business domestic sales domestic sales domestic sales ------------------------------------------------------------------------------------------- (Rs. in Lakhs) ------------------------------------------------------------------------------------------- (i) Turnover (a) FOB exports 100 100 100 100 (b) Domestic sale Nil 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., export proceeds received can be termed as "sale proceeds". Now, one more question raised by Mr. Desai needs to be considered is : whether the introduction of section 80HHF has made any difference to the claim of the assessee. Mr. Desai urged that the facts of the present case squarely fall under the scope of this newly introduced section, however, this provision was absent in the statute book in the relevant assessment year, as such, the assessee was not entitled to any relief as claimed. According to Mr. Desai, the transaction involved in the present appeal would have been covered under section 80HHF had this provision been on the statute book on the date when the transaction in question had taken place. But the situation is that this provision (section 80HHF) came into effect with effect from April 1, 2000, as such, it was not available to the transaction in question. This provision is brought into effect only to cover the transactions which were not covered by section 80HHc, as such, Mr. Desai submits that deduction under section 80HHC is not available to the assessee in this case. Mr. Shivram, learned counsel for the assessee, in reply, submitted that since the inserti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that where a deduction under section 80HHF is claimed and allowed in respect of profits of the business referred to in sub-section (1) for any assessment year, no deduction shall be allowed in relation to such profits under any other provision of this Act for the same or any other assessment year. Since the provision of section 80HHF was not available relevant assessment year with which we are concerned and in view of our above finding that the transaction in question is covered under section 8HHC, we hold that so long as section 80HHF was not on the statute book, the assessee in this case was entitled to claim deduction without any hindrance under section 80HHC with respect to the transaction involved in the present appeal is concerned and after enactment of section 80HHF, of course sub-section (5) thereof will take care to prevent double benefit being claimed by the assessee. In the above view of the matter and following the well recognised principles of interpretation reiterated from time to time and adopting purposive interpretation keeping in mind the practical common sense approach and commercial expediency we have reached the conclusion that the transaction involved in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
