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TMI Blog2016 (7) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Government of India provided the incentive for exploring the new markets across the globe. Exploring a new market for a specified area would naturally expand the market area of the assessee. The incentive given to the assessee is not for running the business profitably but for expanding the market area. Therefore, this Tribunal is of the considered opinion that the incentive given by the Government to the assessee for exploring the new market is a capital receipt, hence it cannot be treated as income either u/s 2(24) or 28 of the Act. In view of the above, we are unable to uphold the order of the lower authority. Accordingly, the orders of the lower authorities are set aside and the addition made by the Assessing Officer is deleted. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Placing reliance on the judgment of the Madras High Court in the case of CIT vs Eastern Seafoods Exports P. Ltd, 215 ITR 64, the ld. Representative submitted that sale of replenishment licences is an act wholly unconnected with the business of the assessee. 3. The ld. Representative for the assessee further submitted that premium on sale of Market Linked Focus Product Scheme scrips is not covered either u/s 28 or 26 of the Act. According to the ld. Representative, Market Linked Focus Product Scheme scrips is not a cash assistance received by the assessee for export under the scheme of Government of India. Referring to sec. 28 of the Act, the ld. Representative submitted that DEPB is specifically included in sec. 28 of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents at least 50% of the fair market value of all the assets owned by the company. In the Direct Tax Code by virtue of deeming provision, there was a proposal to include any consideration on transfer of a right or benefit by whatever name called accrued or received under the scheme as income. However, such a proposal is not attempted in the present Income-tax Act, 1961 and no amendment was made either in sec. 28(iiia) to 28 (iiie) of the Act and sec. 2(24)(va) to 2(24)(ve). The ld. Representative further submitted that profit on sale of import entitlement and certain other specified receipts are specifically included as income. There was an omission for bringing the premium on transfer of Market Linked Focus Product Scheme scrips. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance was to enable the assessee to set up a new unit or to expand the existing units, then the receipt was on the capital account. 6. Referring to the premium on transfer of Market Linked Focus Product Scheme scrips, the ld. Representative submitted that the scrips were given to the assessee-company as incentive by the Government for exploring the new markets since traditional markets in the developed world witnessed a sharp contraction in demand. According to the ld. Representative, the incentive given to the assessee was not to run the business of the assessee more profitably but for exploring the new market. Therefore, the premium received on transfer of Market Linked Focus Product Scheme scrips has to be treated as capital receipt, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived on export is liable for taxation. 9. We have considered the rival submissions on either side and also perused the material available on record. The Market Linked Focus Product Scheme is a scheme promoted by the Director General of Foreign Trade wherein incentive @ 2% on the FOB value of the total export was allowed. As per the Scheme, the incentive was given to export products in a specified market. The export of products which are covered under FPS list would be given incentive of 2% on FOB value of the export. In other words, it is an incentive given by the Government for exploring the new markets across the globe. The question arises for consideration is when the assessee was given incentive for exploring the new markets across ..... X X X X Extracts X X X X X X X X Extracts X X X X
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