9911796707
TMI Blog2004 (7) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... issue arising out of the action of the CIT(A) in allowing deduction under section 80HHC of the Act to the assessee who is a supporting manufacturer without a valid Export House Certificate by the main exporter M/s. Rattan Exports Industries Ltd. for the assessment year under consideration. 3. Brief background to the impugned dispute can be summarized as follows. That the respondent assessee is a partnership firm which is engaged in the business of manufacture and sale of detergent powder. In its return of income, the assessee had claimed deduction under section 80HHC of the Act as supporting manufacturer in respect of exports made through M/s. Ratan Exports Industries Ltd., a recognized trading house (hereinafter referred to as the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of entering into an agreement with the trading house, the certificate of the trading house was valid; that certain quantities of detergents were dispatched to the trading house even before 31-3-1995 which were also shipped by the trading house; that the entire quantity of detergents contracted was sold to the trading house by 5-6-1995 i.e. within the period available to the trading house to make application of renewal for its certificate and during such period, trading house was eligible for all the benefits in terms of the applicable law; that the trading house had actually exported goods also within the aforesaid period of six months; that application for renewal of certificate for the trading house was pending and the same has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Shri S.K. Gupta, has vehemently assailed the orders of the First Appellate Authority. Ld. DR has referred to the order of assessment made by the Assessing Officer in detail. The ld. DR has assailed the stand of the CIT(A) to the effect that in terms of import and export policy, during the interim period, when the trading house makes an application for renewal, it shall be eligible for the usual benefits and facilities available to a trading house. It is submitted that the same was irrelevant inasmuch as only the provisions of the Income Tax Act were required to be appreciated in order to test the efficacy of the action of the assessee for claiming deduction in terms of section 80HHC(1A). Further, it was pointed out that even the applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section like 80HHC was to encourage exports out of India with a view to augmenting the foreign exchange reserves. Similar has been the objective of the export and import policy of the Govt. of India which has undergone changes from time to time. Section 80HHC was amended by way of the Finance Act, 1988, by inserting sub-section (2)( a ) to provide that the exemption was also to be extended in the hands of supporting manufacturers who exported goods out of India though the medium of trading or export houses. Hitherto, the provisions of section 80HHC applied only to such taxpayers who directly exported goods or merchandise. It is provided in the said section that in computing income chargeable to tax in the case of a supporting manufacturers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on envisaged in section 80HHC. If the action of the Revenue is upheld, it would tantamount to denying both, the trading house as well as the assessee, of deduction under section 80HHC. In view of the disclaimer certificate issued, the trading house would obviously not be eligible to claim deduction under section 80HHC whereas the assessee is being denied the deduction. On this count itself, we find force in the conclusions of the CIT(A) that there is no loss to the Revenue in allowing the impugned relief to the assessee. 11. Further, it is a trite law that in viewing the provisions in the taxing statute which grant incentives for promoting growth and development, the same should be construed liberally. The order of the CIT(A), if read i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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