TMI Blog1994 (12) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... he Explanation (b) below this sub-section contains the definition of the ' Export turnover '. As per the definition insofar as it is relevant for the purpose of the present appeal, export turnover excluded freight or insurance attributable to the transport of the goods beyond the customs station. This is how the statutory provision stood as on 1-4-1986. There was no definition of the ' total turnover ' for the assessment year 1986-87. However, for the first time a definition of the words ' total turnover ' was inserted in the section by introduction of Explanation (bb) at the end of the section w.e.f. 1-4-1991 by the Finance Act, 1990. As per the definition, the total turnover shall not include the cash compensatory support, duty draw back and profit on sale of import entitlement. This was consequential to the amendment made to section 28 of the Income-tax Act treating the above three items as business income. We are not concerned with this definition in the present appeal. By Finance (No. 2) Act, 1991, the aforesaid Explanation (bb) was omitted. A new Explanation (ba) was introduced below section 80HHC with retrospective effect from 1-4-1987. As per this Explanation, total turnove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise duty, the denominator viz., the total turnover should not also include the same. Only if the section is interpreted in this manner, uniformity and harmony can be achieved and the intention of the Legislature can be given effect to. 5. The view point of the department, according to Sri A. K. Das, the learned departmental representative, was the same as that of the Assessing Officer and the CIT(A). He particularly laid emphasis on the fact that there was no express provision in the section excluding sales-tax, octroi and excise duty from the total turnover. He pointed out that the expression " total turnover " as understood in the commercial world and as defined in the Bengal Finance (Sales -tax) Act included these elements and there is no reason why the same interpretation cannot be given to the expression under the Income-tax Act. He drew our attention to the judgment of the Supreme Court in McDowell Co. Ltd. v. CTO [1985] 154 ITR 148 in support of his contention that the word " Turnover " should be understood in the manner in which the commercial world understands. 6. On a careful consideration of the rival contentions we are of the view that the interpretation suggest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee that the Legislature itself has intended to bring about uniformity or harmony between the two expressions. This is manifest in the manner in which the expression " total turnover " has been defined to exclude freight or insurance attributable to the transport of the goods. Originally, there was no definition of the expression ' total turnover '. Only ' export turnover ' was defined to exclude freight and insurance. The Legislature by an amendment made by the Finance (No. 2) Act, 1991 with retrospective effect from 1-4-1987 defined total turnover to exclude freight and insurance thereby bringing uniformity in the two. Obviously, the approach is to bring about uniformity in both the numerator as well as the denominator in the formula suggested by section 80HHC for arriving at the export profit. If one draws inspiration from the above, he should seek to bring about the same amount of uniformity while dealing with octroi, sales-tax and excise duty. This is what Dr. Pal has asked us to do and there is so much sense in the same that it is impossible to reject it. 8. It was stated on behalf of the department that there is no provision in the section to exclude sales-tax, octroi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Estate v. Management of Dimakuchi Tea Estate AIR 1958 SC 353 and New India Sugar Mills Ltd. v. CST AIR 1963 SC 1207 that the meaning of the words in a section are to be understood only in the sense in which they best harmonise with the object of the statute which the Parliament has in view and their meaning should be found not so much in a strictly grammatical or even popular use as in the subject or in the occasion in which they are used and the object to be attained. 9. In this connection we may refer to the decision of the Gujarat High Court in CIT v. Natu Hansraj [1976] 105 ITR 43 wherein the aforesaid principles were applied. The question before the Court was regarding the interpretation of section 54 of the Income-tax Act which confers exemption from capital gains tax subject to certain conditions. The section provided that if the assessee who owns a house which is " mainly " used by him or his parent for the purpose of residence sells it and purchases another house for the purpose of his residence, then the capital gains on the sale of the house would be exempt from tax. The section did not say that the new house purchased by the assessee has to be " mainly " used by him ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
