2004 (1) TMI 635 - AT - Income Tax

Summary

Issues:
1. Deduction under section 80HHC for counter sales claimed as export sales.
2. Charging of interest under section 215.

Analysis:
1. Deduction under section 80HHC for counter sales claimed as export sales:
The appeals were against the CIT(A)'s order for the assessment years 1987-88, 1988-89, and 1989-90 regarding the deduction under section 80HHC. The common issue was whether counter sales to foreign tourists against convertible foreign exchange qualified as export sales for the purpose of claiming the deduction. The assessee contended that these sales were akin to export sales as per the export policy guidelines, supported by specific sales slips indicating goods were to be exported out of India. The ITAT Jaipur Bench's decision in the assessee's favor for the assessment year 1986-87 was cited. The Tribunal, respecting the precedent, held that local sales in foreign exchange to foreign customers constituted export for section 80HHC deduction, thus allowing the appeals for the current years.

2. Charging of interest under section 215:
In one of the appeals, the issue was the charging of interest under section 215 amounting to Rs. 2,351 for the assessment year 1987-88. The assessee argued that no interest could be charged without a specific order, citing a Supreme Court judgment. However, it was noted that the ground related to interest was not pressed before the CIT(A), as per the impugned order. The CIT(A) rejected the ground as not pressed, and since it did not arise from the CIT(A)'s order, the interest-related ground was also rejected. Consequently, one appeal was partly allowed, while the other two appeals were fully allowed based on the above analysis.