TMI Blog1993 (12) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... see from export of specified goods or merchandise. The profits derived from the export of goods or merchandise out of India in a case where there were exports as well as local sales were to be computed in accordance with clause (b) of sub-section (3) of section 80HHC of the Act. It was specified therein that such profits would be the amount which bears to the profits of the business the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee. Thereafter, Explanation (b) defined "export turnover" as under: "'export turnover' means the sale proceeds receivable by the assessee in convertible foreign exchange of any goods or merchandise to which this section applies and which are exported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods or merchandise beyond the customs station. This Explanation was effective from assessment year 1987-88 whereas the matter before us relates to assessment year 1986-87. 6. The learned counsel for the assessee submitted before us further that the above retrospective amendment had been made in order to remove an anomaly as was clear from the following extract from CBDT Circular No. 621, dated 19th December, 1991, containing Explanatory notes on the provisions relating to Direct Taxes contained in Finance (No. 2) Act, 1991 : "32.18 Whereas the definition of the term 'export turnover' excludes freight and insurance attributable to transport, no such exclusion has been specified in respect of the term 'total turnover'. As a result, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion "for the removal of doubts" and gives a specific date of 1-4-1987 for retrospective operation. In the light of this, according to him, the Explanation in question could not be made retrospective from 1-4-1986 and, therefore, the order under section 263 of the Act, should be confirmed. 9. We have considered the rival submissions carefully. If we look at the original section 80HHC, introduced by the Finance Act, 1983 with effect from 1-4-1983, the scheme for deduction in respect of export turnover was quite different. The deduction available was of an amount equal to 1 per cent of the export turnover of the specified goods or merchandise and a further deduction of an amount equal to 5 per cent of the amount by which the export turnove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and insurance were excluded from the "export turnover", but not excluded from the "total turnover", then certainly an anomaly came into existence inasmuch as, the profit derived from export of goods became over-stated. It was only to remove this anomaly that Explanation (ba) was inserted by the Finance (No. 2) Act, 1991 retrospectively. However, due to an oversight, the date from which 'total turnover" became relevant for the purpose of computation of deduction under section 80HHC was taken to be 1-4-1987 and not 1-4-1986. This is evident from para 32.20 of the CBDT circular reproduced above. 12. In the case of Jamshedpur Motor Accessories Stores, the Patna High Court was considering the amendment to section 43B, by the Finance Act, 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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