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TMI Blog2012 (2) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... correct construction of the provision of Section 80-HHC(1) read with sub-section 2(a) thereof and explanation (aa) to the sub-section (4A) thereof and Sec. 28 of the Income-tax Act, 1961, the Tribunal was right in holding that the assessee was not entitled to deduction in respect of profits made by it on sales of its manufactured goods to UNICEF? 2. Whether the expression „Export out of India‟ of any goods did not bring within its scope sales made to UNICEF, a United Nations Organisation, which was also regarded as "deemed export" under the Import and Export policy of the Government of India? 3. Whether the Tribunal was right in holding that the assessee‟s office establishment also could be regarded as "any other establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by UNICEF under the aid-programme of the UNO and this required goods to be consigned/delivered to designated consignees as specified by UNICEF. The assessing officer has recorded findings of fact to the effect that all designated consignees were stationed in India and the assesses had not placed any evidence on record to show that the goods were actually sent out of India by its efforts or through the designated consignees of UNICEF. The assessing officer, however, noted, and this not being disputed before us, that the payment for the sales made to UNICEF was received in "convertible foreign exchange". On the basis of the aforesaid facts the assessee claimed a deduction of Rs.31,29,786/- under Section 80-HHC. 4.3 The assessing officer iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said goods never crossed the territory of India and, therefore, it could not be said that the assessee had exported the goods out of India or that it was engaged in the business of export out of India. The Assessing Officer also rejected the plea taken by the assessee that the sale to UNICEF ought to be regarded as a "deemed export". 6. Being aggrieved by the order passed by the Assessing Officer, the assessee filed an appeal before the Commissioner of Income Tax(Appeals) who upheld the view taken by the Assessing Officer. Thereafter the assessee filed an appeal before the Tribunal. 7. The Tribunal by its order dated 30.05.1996 in ITA No. 3084/del/1991 confirmed the view taken by the Commissioner of Income Tax (Appeals). The Tribunal cam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclude any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situate in India, not involving clearance at any customs station as defined in the Customs Act, 1962(52 of 1962)" According to the Tribunal, UNICEF would be regarded as "any other establishment" as appearing in the said explanation (aa) and, therefore, the sale to UNICEF could not, by any stretch of imagination, be considered as an export out of India. 11. It is in this backdrop that the aforesaid three questions have been referred to us by the Tribunal for our consideration. 12. The learned counsel appearing on behalf of the assessee submitted that we must give a purposeful interpretation to the words „export out of India‟. He a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of India? Section 80-HHC, as already noted above, requires twin conditions to be satisfied. The first being that the goods must be exported out of India and the second is that the sale proceeds of such goods or merchandise exported out of India should be received in convertible foreign exchange within a stipulated period of time. These conditions are apparent on a plain reading of Section 80(HHC)(1) & (2). Insofar as the second condition is concerned, there is no dispute inasmuch as it is an admitted position that the sale proceeds have been received in convertible foreign exchange. The only question that arises for consideration is whether the goods were exported out of India or not? It is clear that these conditions are independent c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duties on the finished products. (e) Concessional supplies of steel as otherwise permissible on exports." 17. None of these benefits include the benefit under the said Act. Therefore, the said circular would be of no help to the assessee. 18. The third argument of the learned counsel for the assessee that the export was made to UNICEF and, that, therefore, there is no need for the goods to cross the boundary of India so as to constitute export out of India, is also not tenable. There is no distinction made in the said Act between exports made to one party or another. The provision in question, that is, Section 80-HHC speaks only of export out of India, irrespective of who the purchaser or consignee is, be it a private party ..... X X X X Extracts X X X X X X X X Extracts X X X X
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