2005 (2) TMI 42 - HC - Income Tax

Whether the Tribunal was right in confirming disallowance of the assessee s claim for exemption on export profits u/s 80HHC of the Income-tax Act - Held that petitioner who is proved to be a supporting manufacturer is not entitled to claim exemption without production of a valid disclaimer certificate in time issued by the Export House in Form No. 10CCAB. - The other question pertains to the confirmation of disallowance of the assessee s claim for deduction under section 80-I - The other question pertaining to deduction under section 80-I in respect of industry engaged in fish processing and packing is also decided against the assessee

Summary

Issues:
1. Disallowance of exemption on export profits under section 80HHC of the Income-tax Act.
2. Disallowance of deduction under section 80-I of the Act for the assessment years 1996-97 and 1997-98.

Analysis:
1. The main issue in this case involves the disallowance of the assessee's claim for exemption on export profits under section 80HHC of the Income-tax Act. The court considered whether the Tribunal was correct in confirming the disallowance of the exemption for the years 1992-93, 1996-97, and 1997-98. The assessee argued that they were entitled to the exemption under section 80HHC(1) for direct exports of marine products to foreign buyers. However, the disallowance was related to exports made through Export Houses under section 80HHC(1A), which includes incentives paid to the assessee by the Export Houses. The court found that the assessee failed to produce the required disclaimer certificate from the Export Houses in Form No. 10CCAB, as mandated by section 80HHC(4A). Despite the assessee's arguments, the court upheld the disallowance based on the Supreme Court's decision in Sea Pearl Industries v. CIT, which emphasized the necessity of a disclaimer certificate for claiming exemption under section 80HHC(1A).

2. The second issue concerns the disallowance of deduction under section 80-I for the assessment years 1996-97 and 1997-98. The assessee, engaged in fish processing and packing industry, claimed deductions under this section. However, the Tribunal rejected the claim citing Supreme Court decisions in CIT v. Relish Foods and CIT v. Venkateswara Hatcheries (P.) Ltd. The court upheld the Tribunal's decision, stating that there were no grounds to deviate from the established legal precedents. Consequently, the court ruled against the assessee on this issue as well.

In conclusion, the court ruled in favor of the Revenue and dismissed the appeals, upholding the disallowance of exemption on export profits under section 80HHC and the disallowance of deduction under section 80-I for the relevant assessment years.