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TMI Blog2013 (4) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in Customs Act, 1962, is thereby excluded from the expression "export out of India". There is no dispute between the parties that the transactions of counter sales effected by the respondent involved customs clearance within the meaning of Explanation (aa) to Section 80HHC(4A) and further that the sales were in convertible foreign exchange. In view of the above, the Tribunal was not correct in treating the counter sale to foreigners against foreign exchange as not export sale. It is held that such sales are export sales i.e. within the meaning of Explanation (aa) to Section 80HHC (4A) of the Act. The Tribunal was not right in not extending the benefit of Section 80HHC to counter sales made to foreign tourist against foreign currenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the first period and Rs.7,17,475/- for the second period as export out of India for grant of deduction under Section 80 HHC. Rest of the claim was rejected on the ground that the assessee has made counter sales to foreign tourists and made the sales in India against Indian currency. The matter ultimately reached to the Tribunal in Appeal No. 2401 2402/Del/92. Before the Tribunal, it was submitted that the assessee was an export house certificate holder and therefore, entitled for deduction under Section 80 HHC in respect of all sales. The Tribunal found that all the sales made by the assessee can be divided in the following three categories: (1) Sale in Indian money; (2) Counter sale against foreign currency; and (3) Export sale t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troversy involved in the present appeal stands concluded by the judgment of this Court in the case of Ram Babu and Sons (supra). The said judgment has been approved by the Apex Court in the case of Commissioner of Income Tax v. Silver Arts Palace (supra). The relevant portion from the said judgment is reproduced below: "2. Section 80HHC of the Act permits certain deductions to be made from the profits earned out of the business of export of goods. There is, however, an Explanation (aa) added thereto, which reads as under : "(aa) Export out of India' shall not include 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or otherwise in a shop, emporium or establishment situate in India, and (b) that it does not involve clearance in any customs station as defined in the Customs Act. This view of the Allahabad High Court had been consistently followed by several other High Courts, including the Rajasthan High Court itself in ITO v. Vaibhav Textiles [2002] 258 ITR 346. Reliance was placed on a number of orders of the Income-tax Tribunal following the view taken in Ram Babu's case , consistently and the law laid down therein. In fact, even in the case of the respondent-assessee, for the previous assessment years, the Tribunal had taken the same view. Although the Revenue attempted to canvass against the view by seeking references under Sections 256(1) and (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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