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TMI Blog1970 (12) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... ,382. The rebate was refused in respect of the balance turnover of Rs. 2,71,742 on the ground that it relates to a sale to U.P.C.C. Ltd., Calcutta, an intermediary. The commission sales were held to be not eligible for rebate as the assessee was not the owner of goods ultimately exported out of India. The appeal by the assessee to the Appellate Assistant Commissioner was without success. The Appellate Tribunal, on a consideration of the correspondence exchanged between the assessee and Macmillan, Maxwell Co. (the assessee's constituents and reputed tobacco dealers and agents in London), found that the assessee was in substance the dealer who really exported the tobacco in respect of Rs. 2,71,742 through the intermediary, U.P.C.C. Ltd., Calcutta, as the assessee was controlling the entire export to France and was responsible for the quality and the intermediary only acted as a conduit pipe through which the transactions were routed, and allowed the rebate in respect of that turnover. On the same logic, the Tribunal held that the assessee was entitled for rebate in respect of commission transactions amounting to Rs. 25.96 lakhs and allowed the appeal. At the instance of the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es which have made the prescribed arrangements for the declaration and payment of dividend within India, but not others. The requisite qualification for earning this rebate is that the total income must include any profits and gains earned by the assessee or the company, as the case may be, from the export of any goods or merchandise out of India. The rebate is permissible only to the profits and gains derived by the assessee or the company, as the case may be, from the export of any goods or merchandise out of India. The income of an assessee or a company not derived from the export of any goods or merchandise outside India does not earn any rebate under section 2(5). The answer to the question turns upon the interpretation of the words "whose total income includes any profits and gains derived from the export of any goods or merchandise out of India " used in section 2(5)(i) of the Finance (No. 2) Act, 1962. The crucial words are "derived from the export of any goods or merchandise out of India". We shall first proceed to examine the meaning of the expression "from the export of goods or merchandise out of India" and thereafter "derived". The meaning of the word "from" as given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as profits earned or received by an assessee by transporting goods or merchandise out of India. In other words, the profit earned by the exporter is from the foreign buyer who pays for the goods. In the light of the aforesaid discussion, we shall proceed to examine the facts of the present case. Admittedly, the assessee has exported tobacco worth Rs. 7,99,640 directly. It has also exported tobacco to Britain, out of India, of the value of Rs. 2,71,742 through an intermediary, viz., U.P.C.C. Ltd., Calcutta. Hence, in so far as the aforesaid turnover of Rs. 10,71,382 is concerned, the assessee had either directly or through an intermediary exported tobacco out of India and derived profit from such export. Therefore, the assessee is entitled to have rebate under section 2(5) of the Finance (No. 2) Act of 1962 in so far as the profits and gains derived from the export of tobacco of the value of Rs. 10,71,382 outside the country is concerned. However, the question now for decision is whether the assessee is also entitled for a similar relief in so far as the profits derived by it on commission sales to the tune of Rs. 25.96 lakhs is concerned. True, as contended by the assessee, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im, is the source. We have, therefore, no hesitation to hold that the transactions, in so far as the assessee is concerned, are only commission sales which have no concern or connection with the export. We may also approach the problem from another angle. The assessee who is only a commission agent is not concerned with the profit or loss of the exporter in respect of the goods supplied by him on commission. The assessee is certainly entitled to his commission irrespective of the fact whether the exporter earns profit or incurs a loss by exporting the goods supplied by the supplier outside India. It is the exporter that will ultimately reap the result or consequences of the export of the goods out of India but not the commission agent. The exporter may directly purchase the goods for export and export the same in which case the commission agent will be nowhere in the picture. It is not necessary that there should be commission agents for the purpose of export trade. The exporter may purchase either directly or through the commission agents for the purpose of exporting the goods out of India. If really what the assessee contends for is acceded to it would amount to giving rebate n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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