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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 ..... gislation or policy cannot be imported into the Income-tax Act, 1961 unless the said Act specifically says so. Section 80HHC stipulates twin conditions of goods to be exported out of India, and sale proceeds to be received in convertible foreign exchange. Satisfaction of one condition in the absence of other condition being satisfied would not entitle the assessee to claim the deduction u/s 80-HHC. Section 80-HHC speaks only of export out of India, irrespective of who the purchaser or consignee is, be it a private party or an organization such as UNICEF. Therefore, deduction u/s 80HHC not allowed – Decided in favor of revenue. - ITR 133/1997 - - - Dated:- 15-2-2012 - MR. JUSTICE BADAR DURREZ AHMED, MR. JUSTICE V.K.JAIN, JJ. For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds were EPI posters in Hindi, Urdu and Gurmukhi. The sales were made to UNICEF by the assessee in India. There is no dispute that the payment for the sales was received by the assessee in convertible foreign exchange. The question as to whether such a sale of goods would amount to export out of India has arisen in the context of Section 80-HHC of the said Act. 3. In case it is held that such sales would amount to exports out of India, then the assessee would be entitled to claim the deduction under Section 80-HHC. On the other hand, if it is held that the sales made to UNICEF in India do not constitute export out of India, then the assessee would not be entitled to claim the deduction under the said Section. 4. The facts of the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee filed a letter dated 15.10.1990 raising numerous arguments with reference to the provisions of Section 80-HHC, the Imports Exports (Control) Act, 1947, the Imports(Control) Order, 1955 and the Import and Export Policy itself. Numerous arguments were advanced but two main points were raised, namely, that the export by the assessee was a deemed export eligible for deduction and the primary purpose of introducing and giving relief under section 80-HHC was the earning of convertible foreign exchange. 5. The Assessing Officer, after considering the reply submitted by the assessee, rejected the arguments advanced on behalf of the assessee and held that the assessee was not entitled to the said deduction under Section 80-HHC inasm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merchandise exported out of India are receivable in convertible foreign exchange. 8. According to the Tribunal, the said twin conditions had to be satisfied as the two conditions were not alternatives but were cumulative and were independent of each other. 9. The Tribunal came to the conclusion that in view of the fact that the goods had not crossed the territorial boundary of India or, for that matter, any customs station as defined in Section 2(13) of the Customs Act, 1962, the sale of goods to UNICEF in India could not be regarded as an export out of India. With regard to the arguments raised by the assessee that the sale to UNICEF ought to be construed as a deemed export , the Tribunal repelled the same by taking a view that a deem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... import and export policy ought to be applied while construing the provisions of Section 80-HHC. The learned counsel also sought to place reliance on a notification dated 06.01.1971 issued by the Government of India, Ministry of Foreign Trade indicating that sales made to India under the United Nations aid programme ought to be construed as deemed export for the purposes of obtaining benefits under the import and export policy. Another point raised by the learned counsel for the assessee was that these were sales made to UNICEF and, therefore, there was no necessity of transporting the goods beyond the territory of India inasmuch as UNICEF itself is an international organization of the United Nations. 13. We have also heard the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India‟ has not been defined in the Income-tax Act, 1961. The plain and simple meaning of the term export out of India‟ would entail the transfer of goods out of the territory of India. The goods must physically move out of India at least insofar as tangible goods are concerned. 16. The learned counsel for the assessee, as mentioned above, urged us to import the concept of deemed export from the import and export policy. We entirely agree with the view taken by the Tribunal that the concept of deemed export prevalent in another legislation or policy cannot be imported into the Income-tax Act, 1961 unless the said Act specifically says so. Insofar as the notification dated 06.01.1971 is concerned, the benefits that would be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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