9911796707
TMI Blog1999 (3) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... The judgment of the court was delivered by S. P. BHARUCHA J.--- Under appeal is the decision of a Division Bench of the High Court at Madras (see [1991] 192 ITR 423). The Division Bench answered in the negative and in favour of the Revenue the following questions : "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that, having regard to the notification under section 104(3) of the Income-tax Act, 1961 in S. O. No. 3210, dated August 8, 1969, issued by the Government, the assessee was not liable to pay additional tax under section 104 of the Income-tax Act, 1961, for any of the assessment years from 1972-73 to 1974-75 ? (2) Whether, on the facts and in the circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of a trading company, and (c) twenty-five per cent., in the case of any other company, on the distributable income as reduced by the amount of dividends actually distributed, if any,... (3) If the Central Government is of opinion that it is necessary or expedient in the public interest so to do, it may, by notification in the Official Gazette and subject to such conditions as may be specified therein, exempt any class of companies to which the provisions of this section apply from the operation of this section." A notification dated August 8, 1969 (No. S. O. 3210), was issued in exercise of the powers conferred by section 104(3). It reads thus : "In exercise of the powers conferred by sub-section (3) of section 104 of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided further that the sale proceeds derived by the company from the exports, if any, referred to in item (a) and the gross receipts derived by it from the activities of its business referred to in item (b) or item (c) or both, during the previous year, amount, in the aggregate, to 50 per cent. or more of the aggregate amount of the sale proceeds and all other gross receipts of the business during the previous year credited to the profit and loss account of the company." The assessee had, by a letter dated March 26, 1969, written by the Government of India, Ministry of Commerce, been granted permission to export for the purpose of a barter deal, ferro-silicon manufactured by the Mysore Iron and Steel Works, Bhadravati, up to a value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntegrated nature of the scheme, the import licence realisation by the assessee would constitute sale proceeds derived by it from exports within the meaning of the said notification. Arising out of the judgment and order of the Tribunal, the questions quoted above were referred to the High Court. The High Court found, rightly, that the judgment in the earlier case referred to above was distinguishable on facts. It analysed the said notification and held that an assessee would get its benefit only after it exported goods out of India and received the sale proceeds of the exports in India. The receipts from the transfer of import licences by the assessee to actual users in India did not fall within the meaning of the said notification. Admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto account are "the sale proceeds of the exports" ; that is to say, the export "of any goods or merchandise out of India". Secondly, the sale proceeds of the exports have to be received in or brought into India in accordance with the FERA. What is contemplated is the export of goods or merchandise out of India, such export to be paid for in India or abroad. If paid for abroad, such amount has to be brought into India in accordance with the provisions of the FERA. Clearly, the consideration received by an assessee for assignment of import licences received pursuant to the exports cannot be taken into account for the purpose of determining whether the sale proceeds derived by the assessee from exports amount to 50 per cent. or more of its ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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