9911796707
TMI Blog2003 (9) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessment year 1994-95. The assessee is a partnership firm engaged in the business of importing rough diamonds, getting them cut and polished and exporting them. 2. The dispute, which is common to both the appeals, relates to the computation of the deduction under section 80HHC of the I.T. Act. The only question is whether the premium received by the assessee on surrender of import lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not include the premium in the "total turnover" on the ground that it is an incentive for exports under section 28( iiib ) of the I.T. Act. On account of full convertibility of rupee on trade account, there was a fall in the exchange value of the rupee vis-a-vis dollar. The imports therefore became expensive. Realising this difficulty, the Government of India decided to compensate d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. He concluded that the premium which was given to the exporters was directly related to the import licences which in turn are issued to them against exports or export-obligations. The premium thus relates to the business activity and should form part of the turnover. At any rate, it cannot be considered to be an incentive and excluded under the proviso to Explanation ( ba ) from, "total turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to be included in the "total turnover". He thus partly upheld the assessee s claim and partly upheld the Assessing Officer s view. 6. While the assessee is in appeal against the view of the CIT(A) that the premium received on surrender of "market licences" cannot be excluded from the "total turnover", the Department is in appeal against his view that the premium received on surrender of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the premium received by the assessee both on account of surrender of "own licences" and "market licences" have to be excluded from the "total turnover" under the proviso to Explanation ( ba ) on the footing that they are incentives under section 28( iiib ). 8. No other arguments were advanced before us with regard to the computation of the deduction. 9. In the result, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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