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TMI Blog2009 (6) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... six months from the end of the previous year comes to 30-9-2009. Application of General Clauses Act when a date prescribed is a holiday has been succinctly summarized by Hon ble Kerala High Court in the decision of Kerala State Industrial Development Corpn. Ltd. v. Addl. CIT [ 2006 (10) TMI 91 - KERALA HIGH COURT] . Therefore, remittance received by the assessee on 1-10-2004 has to be deemed as received within six months period from the end of the relevant previous year. Therefore, insofar as the sum as received above has to be allowed. However, the balance amount which was received on 26-11-2004 would not be eligible for the purpose of computing deduction u/s 10A. Ground partly assessee is allowed. Treating the interest from fixed deposit and interest on staff loan as income falling under the head Profits and gains from business or profession eligible for deduction under section 10A - HELD THAT:- The Hon ble Delhi High Court in the case of Eltek SGS (P.) Ltd. [ 2008 (2) TMI 17 - DELHI HIGH COURT] has held that the term derived by an undertaking from export of articles or things or computer software used in section 10A was neither as broad as attributable to nor as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the assessment year 2002-03 set up a second Software Technology Park Unit, which was eligible for deduction under section 10A of the Act. The total exports sale proceeds on which deduction was claimed came to Rs. 25,53,82,275 for the relevant previous year. Out of this amount, Assessing Officer noticed that a sum of Rs. 53,62,637 was realized after 30-9-2004. According to the Assessing Officer this could not be considered as a part of the export turnover for the relevant previous year. Explanations were sought. Assessee replied that export proceeds were to be received in convertible foreign exchange within a period of 6 months from the end of the relevant previous year or further period as the competent authority allowed in this behalf. According to the assessee, the competent authority being Reserve Bank of India, had provided general approval whereby it was mentioned that date of export in relation to export in other than physical form, was to be considered as date of invoice. According to the assessee, the sum of Rs. 53,62,637 was received as convertible foreign exchange within six months from the date of the relevant invoices and hence, eligible for claiming deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble for deduction under section 10A of the Act since such period of six months was allowed by the Reserve Bank of India through general notification and undisputedly RBI was the competent authority for this purpose under section 10A of the Act. He brought to our attention paper book pages 1 and 2 which gives a copy of the Regulation 9 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000. According to him Explanation to clause (1) of Regulation 9, clearly stipulated that date of export in relation to export of software in other than physical form was to be deemed as date of invoice covering such exports. Therefore, according to him, assessee having received the impugned amounts within a period of six months from the date of the invoice, the export realization had to be deemed as received within the period allowed by the Reserve Bank of India for the purpose of Income-tax provisions also. Further, according to him, six months period provided under section 10A got extended by virtue of general approval granted by the Reserve Bank of India under the Regulations mentioned supra . Alternatively, it is submitted by him that a sum of Rs. 49,10,904, include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r FEMA whereby period of six months was to be reckoned from the date of the invoice could not be considered as extension of such period by the competent authority. As regards interest being treated as income from other sources, learned counsel submitted that deduction under section 10A of the Act was for profits derived by an undertaking from exports. According to him, interest on bank deposits or staff loans could not be considered as profits derived from exports. Even if such amount were viewed as business income, it could not be export proceeds. Learned counsel for the Revenue further submitted that section 10A was an exemption provision and not a deduction provision and hence reference to the decisions under section 80HHC of the Act had no relevance vis-a-vis a claim under section 10A of the Act. Learned counsel relied on the decision of the Kerala High Court in the case of CIT v. Jose Thomas [2002] 253 ITR 553 for the proposition that interest income could not be considered as profit derived from exports. 9. We have heard the rival contentions and perused the orders. The first issue regarding relayed receipt of realization of computer software export would be conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation. For the purpose of this regulation, the "date of export" in relation to the export of software in other than physical form, shall be deemed to be the date of invoice covering such export. (2) ( a ) Where the export of goods or software has been made by a Status Holder Exporter, as defined in the EXIM Policy in force then, notwithstanding anything contained in sub-regulation (1), the amount representing the full export value of goods or software shall be realised and repatriated to India within twelve months from the date of export : Provided that the Reserve Bank may for a sufficient and reasonable cause shown, extend the said period of twelve months. ( b ) The Reserve Bank may for reasonable and sufficient cause direct that the said exporter(s) shall cease to be governed by sub-regulation (2) : Provided that no such direction shall be given unless the said exporter(s) has been given a reasonable opportunity to make a representation in the matter. ( c ) On such direction, the said exporter(s) shall be governed by the provisions of sub-regulation (1), until directed otherwise by the Reserve Bank." As against this sub-section (3) of section 10A of the Act runs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ths. In fact, there is no mention of any six months in such regulation and this only clearly implies that Regulation 9 was only for the purpose of Foreign Exchange Management and not for the purpose of application of tax provisions. Therefore, assessee s contention that the amounts had to be deemed as received within the period allowed by the Competent Authority fails. Nevertheless the alternative contention raised by the assessee that 30-9-2004 being a closed banking holiday, sum of Rs. 49,10,904 received on 1-10-2004 has to be deemed as received within the period of six months from the end of the previous year has considerable weight. It is clear from paper book page No. 21 that on account of half yearly closing of accounts, there was no conduct of normal business in banks on 30-9-2004. There is also no dispute that sum of Rs. 49,10,904 was received on 1-10-2004 by the assessee, as clear from the certificate of M/s. J.P. Morgan dated 8-5-2007 (placed at paper book page 19). The period of six months from the end of the previous year comes to 30-9-2009. Application of General Clauses Act when a date prescribed is a holiday has been succinctly summarized by Hon ble Kerala High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogy Park Unit I would not be eligible for deduction under section 10A of the Act. Hence, we are required to decide on interest on fixed deposit of Rs. 7,96,233 and interest on staff loan of Rs. 1,377. There is no dispute that assessee was a hundred per cent exporter. No doubt the Learned Departmental Representative has relied on the decision of the Kerala High Court in the case of Jose Thomas ( supra ) for the proposition that interest from bank deposit could not be consi-dered as income from business for claiming deduction under section 80HHC of the Act. However, we find that the jurisdictional High Court in the case of Punit Commercial Ltd. ( supra ) has held that where an assessee was 100 per cent exporter, deduction under section 80HHC had to be given on the entire business income including interest on fixed deposit. According to the Hon ble jurisdictional High Court, entire profits of 100 per cent exporter was entitled for deduction under section 80HHC of the Act. Again the Hon ble Delhi High Court in the case of Eltek SGS (P.) Ltd. ( supra ) has held that the term "derived by an undertaking from export of articles or things or computer software" used in section 10A was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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