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TMI Blog2005 (12) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... R., B. N. CHATURVEDI. JUDGMENT The judgment of the court was delivered by T.S. Thakur J.-This appeal under section 260A of the Income-tax Act, 1961, arises in the following circumstances: For the assessment year 1998-99, the appellant-assessee filed a return declaring an income of Rs. 11,56,780 after claiming a deduction of Rs. 31,97,357 under section 80HHC. The assessee had for that year shown export sales of Rs. 24,822 and profit on sale of import entitlements of Rs. 35,46,150. The Assessing Officer examined the claim for deduction made by the assessee and came to the conclusion that no exports had been made by the assessee in the assessment year 1996-97 or 1997-98. He also found that the import entitlement sold by the assessee relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed unless there was an export during the year under consideration which fact the assessee had failed to establish. The Judicial Member further held that the assessee was not engaged in the business of export which was a condition precedent for claiming the deduction under section 80HHC. Consequent upon the difference of opinion between the two members, the President of the Tribunal framed and referred to a third Member the following question under section 255(4) of the Income-tax Act, 1961: "Whether, on the facts and in the circumstances of the case, the appellant during the relevant year was engaged in the business of export out of India or any goods or merchandise, so as to entitle it the deduction under section 80HHC of the Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of customs clearance. The only submission of the assessee's counsel is that goods were sent through some passenger going abroad. However, this plea is not supported or substantiated by any material or evidence. There is no airway bill or shipping document. In my considered view, no goods can be said to be actually exported unless there is customs clearance by the concerned authorities. No goods can either leave/enter the country without customs clearance as per the customs law in force in India. Therefore, in the absence of such evidence, it has to be held that there was no export of goods by the assessee as claimed by him. Mere purchase/sale invoice coupled with foreign remittance is not enough to prove actual export. It is not necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal then passed the impugned order dated September 24, 2004, holding by majority that the disallowance of deduction claimed by the assessee under section 80HHC was justified. The present appeal assails the correctness of the said order. Mr. Sharma, learned senior counsel, appearing for the assessee made a twofold submission before us. In the first place, he argued that the question referred to the Third Member of the Tribunal could not have been reframed and the issue had to be examined only by reference to the question referred to the Third Member without enlarging its scope. Secondly, he contended that the findings recorded by the Tribunal that there was no actual export of goods during the year under consideration was perverse inasmu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eframing of the question to bring into focus the true controversy between the parties. The parties had rightly conceded that the issue was not whether the assessee was engaged in the business of export but whether he was entitled to the benefit of deduction under section 80HHC having regard to the fact that the exports themselves were doubtful. The Third Member, therefore, was justified in approaching the issue from the correct perspective after the question was reframed and determining whether any exports had in fact been made during the year under consideration. The first limb of the argument of Mr. Sharma, therefore, fails and is hereby rejected. Coming then to the second limb of the appellant's grievance, we find that the authorities b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oreign remittance was not enough to prove actual export. Even assuming that a second opinion is possible on the material adduced by the assessee, the same would not constitute a good ground for interference in the present appeal nor demonstrate that the view taken by the Tribunal was perverse. We have, therefore, no hesitation in repelling the contention of Mr. Sharma that the finding regarding absence of actual export was perverse. In fairness to Mr. Sharma, we must mention that he did not dispute the proposition that a deduction under section 80HHC was allowable only if actual export of merchandise was proved. That requirement having failed in the present case, there was no escape from the conclusion that the deduction could not be grante ..... X X X X Extracts X X X X X X X X Extracts X X X X
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