9911796707
TMI Blog2005 (11) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption under s. 10B of the IT Act, 1961 ("Act" hereinafter), at Rs. 19,57,116 (ITA No. 1263/Ahd/2005) and Rs. 16,00,825 (ITA No. 1264/Ahd/2005), i.e., as claimed by the assessee(s) which stood earlier disallowed by the AO vide his order under s. 143(3) of the Act, dt. 28th March, 2002 and 29th March, 2002, respectively. 4. The facts of the case in brief are that this matter had been earlier heard by the first appellate authority and the assessee's appeal allowed vide order dt. 9th Sept., 2002. In second appeal, the Tribunal (Ahmedabad Bench 'C') in Appeal No. 3660 and 3662/Ahd/2002 (for the two respondent-assessees), vide its order dt. 30th Sept., 2004, remitted the matter back to the file of the CIT(A) for fresh adjudicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record and which stands duly cognized and appreciated by the learned CIT(A) while adjudicating in the matter. Specifically: (a) The assessee's export sales being not out of India but only to another 100 per cent EOU: Reference in this context was made to paras 9.10(c), 9.11, 10.2(b) of Chapter IX of the Exim Policy 1992-1997, which deems the sale by EOU to another EOU as export, to be counted towards the fulfillment of its obligation in respect of Net Foreign Exchange Earning (NFEE) and Export Performance (EP), provided the same (goods sold) are permissible for procurement in terms of para 9.2 of the policy. (b) Trading turnover: The turnover of the assessee-company during the relevant previous year is in respect of weaving of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have heard the parties before us and also perused the material on record. We find, for the reasons aforestated, as also noted hereafter, that each of the three basic defects in the assessee's claim for exemption under s. 10B stands effectively met by the assessee. 6.1 As regards the objection No.1, the section does not stipulate the requirement for the sale proceeds of the goods produced by the assessee's undertaking to be received in convertible foreign exchange and as a necessary precondition for being exigible as a qualifying unit, as, for example, is in the case of some other sections relating to export income, viz., ss. 80HHC and 80HHE. Further, s. 10B stands amended w.e.f. 1st April, 2001 to provide for the same, and whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which it stands recognized as such. Further, sub-s. (2) of 10B which enumerates the qualifying criteria, vide cl. (ia) thereof, requires the export of at least 75 per cent of the sale of goods manufactured or produced by the EOU. As such, the criteria of minimum level of export is only with reference to the goods manufactured/ produced by the undertaking, and independent of any other activity, including the trading activity, engaged in by the assessee. The assessee may, in a given case, export 100 per cent of its bought out goods, but that would not entitle it for exemption under s. 10B; the export to be reckoned for the purpose being only in respect of goods manufactured/produced by it. Therefore, as long as the profits from the trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r operations. 7. In view of the foregoing, we find that none of the debilitating defects in the assessee's claim under s. 10B as pointed out by the Revenue survive and hence, there is no infirmity in the order of the learned CIT(A), which is hereby upheld. The learned Departmental Representative has also, during the course of hearing, pointed out that the assessee has not substantiated its claim by maintaining separate accounts in respect of its eligible undertaking. While we admit this objection of the Revenue as valid, it would not, thereby, disentitle the assessee's claim, which factor would only facilitate the determination of the correct quantum of profits as eligible for deduction. In its absence, therefore, the onus to prove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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