9911796707
TMI Blog1983 (2) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... s is not a bounty or gift which is given to anybody but by right being an exporter, the Controller of Imports and Exports extends patronage to the assessee in the form of Import Entitlements which have been sold and have to be correctly included in his assessable income. The amount received will have to be included in the assessee's total income as profits assessable u/s 28(iv). The assessee appealed to the Commissioner (A) who upheld the assessment order. Against the same, the assessee has come in appeal. 2. The ld. counsel for the assessee strongly urged that the amount received on sale of Import Entitlements cannot be treated as profit out of export business. It is not the assessee's business to purchase or sell the Import Entitlement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foods, it was entitled for Import Entitlements which it obtained. Instead of importing any material under Import Entitlements, the assessee opted to sell the Import Entitlements and made a profit of Rs. 39,368. The question is whether the said sum of Rs. 39,368 is taxable. In our view, the said sum is taxable as business income u/s 28(iv). It is only on account of export of sea-foods that the assessee was entitled for Import Entitlements which it sold. Thus, the Import Entitlements obtained by the assessee are directly related to the assessee's business in exports. Since the Import Entitlements were obtained in the course of the assessee's business in exports, the sale value of it constitutes profit and gain of business within the meaning o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surrendering the Import Entitlements the assessee received a sum of Rs. 2,33,662 from the Export Promotion Fund. The question arose whether the said sum is taxable. The Allahabad High Court held that the payment being directly proportionate to the quantity of goods exported was revenue receipt, for it was an additional payment received for the goods sold by way of export. 6. In Jeewanlal (1929) Ltd. vs. ITO (1982) 26 CTR (Cal) 60 : (1981) 130 ITR 405 (Cal), the assessee, which was engaged in the business of aluminium goods which were exported, obtained Import Entitlements which were sold. The question arose whether the sums received on sale of Import Entitlements were liable to tax. The Calcutta High Court held that the right to Import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them for certain amounts. On the above facts, the Bombay High Court held that the import entitlements were obtained by the assessee in the course of its business and the value of the same constituted profits and gains of business of the assessee within the meaning of s. 28(iv). These import entitlements could not be regarded as a capital asset of the assessee and the amount realised from their sale had to be treated as profits of the assessee in its business and not as a capital receipt. Further, the impugned receipts were not of a casual or non-recurring nature because the same were received by the sale of import entitlements acquired in the course of its business. Accordingly, the impugned receipts were rightly taxed as the assessee's bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence, they are not directly on the point in issue in this appeal. 11. Thus, we hold that the sum of Rs. 39,368 received by the assessee on sale of Import Entitlements has been rightly taxed as business profits u/s 28(iv). Thus, we uphold the same. In the view we have taken the other contentions whether it is a capital asset capital receipt, etc., do not survive for consideration. 12. Grounds Nos. 1 2 raised in the grounds of appeal are not pressed and they are rejected. 13. The last ground is with regard to weighted deduction. The Commissioner (A) has held that there is nothing on record to show that the assessee had at anytime claimed weighted deduction under any of the sections of the IT Act. It is not pointed out as to how and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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