TMI Blog1976 (11) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the Finance Act?" As the question itself implies, the reference relates to the assessment years 1963-64 to 1966-67 and the question raised is a common one. The assessee is a reputed exporter of tanned hides and skins for nearly 100 years. As far as the present reference is concerned the question involved relates to certain amounts earned by the assessee differently called as "selling commission" or "discount" in respect of the transactions carried out in the following manner as found by the Tribunal. To represent the assessee in foreign markets, the assessee enters into agency agreements with foreign firms by which the foreign firms represent the assessee in foreign markets as its agents. Selling commission of 2 per cent. on all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of authority to its bankers on the basis of which the dealer receives payment for the goods shipped on the presentation of the shipping documents. The discount of 1 per cent. received by the assessee on all the hides and skins exported to its foreign representative for the assessment years 1963-64 to 1966-67 was claimed by the assessee as export profits entitled for the rebate under section 2(5)(i) of the Finance Act, 1963, and section 2(5)(a)(i) of the subsequent Finance Acts. The Income-tax Officer, while accepting the explanation of the assessee that the commission on sales was received from the foreign customers, disallowed the claim on the ground that the exports were not made on its own account and the assessee had not directly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of contract between the foreign representatives and the local dealers; (iv) instead of the assessee physically shipping the goods to its foreign representative, the goods have been shipped by the local dealers on behalf of the assessee; (v) the assessee, in short, is the buyer and seller of the hides and skins in the foreign market through its representative and this surely constitutes export and any income derived from this transaction had to bear the label of export profit. It is, in this view, the Tribunal dismissed the appeals preferred by the department. It is the correctness of this conclusion of the Tribunal that is challenged in the form of the question extracted already. It is necessary to refer to the relevant statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee; (2) the invoice prepared by the dealers containing the prices less commission and discount was countersigned by the assessee; (3) there was no privity of contract between the foreign representative and the local dealer; (4) any difference in prices was invariably debited against the assessee by the foreign representative. In addition to that, there was also the finding by the Appellate Assistant Commissioner which was not disturbed by the Tribunal to the effect that the assessee is responsible for ensuring the quality of the goods and their proper shipment. Having regard to these and also the further finding that the assessee is the buyer of the hides and skins from the local dealers, it is clear that the assessee first purchases th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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