9911796707
TMI Blog1994 (12) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... 963 ?" The material facts relevant for the determination of the controversy involved in the above question are as follows : The assessee is a textile mill. This reference pertains to the assessment year 1963-64, the relevant previous year being the year ended on March 31, 1963. The assessee claimed a rebate in respect of export of cloth which was admissible on the export profits under section 2(5)(i) of the Finance Act, 1963 (13 of 1963). This claim of the assessee was rejected by the Income-tax Officer, as according to him, the exports made by the assessee had not resulted in a profit. The Income-tax Officer referred to the directors' report where it was observed that the reduction in the profits was mainly due to adverse trading condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issed the appeal of the Revenue. While doing so, the Tribunal observed that the assessee was entitled to export profit rebate as provided in section 2(5)(i) of the Finance Act, 1963, on export profits determined in the manner laid down in rule 2(3) of the Income-tax (Determination of Export Profits) Rules, 1963. Hence, this reference to us at the instance of the Revenue under section 256(1) of the Act for opinion on the question of law set out above. Section 2(5) of the Finance Act, 1963, so far as is relevant, reads : " 2(5). In respect of any assessment for the assessment year commencing on the 1st day of April, 1963, (i) an assessee being an Indian company or any other company which has made the prescribed arrangements for the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 63, vide Notification No. S. O. 1981, dated July 9, 1963, which provides the method of computation of the qualifying income for the purpose of clause (vi) of sub-section (5) of section 2 of !he Finance Act, 1963. Rule 2 of the above rules reads : " 2. Computation of qualifying income.-- (1) Where an assessee referred to in clause (i) of sub-section (5) of section 2 of the Finance Act, 1963 (XIII of 1963), exports any goods or merchandise out of India, the amount of the profits and gains derived from such exports with reference to which deduction of tax is admissible under that sub-section (hereinafter referred to as the qualifying income) shall be computed in accordance with the provisions of sub-rule (2) or sub-rule (3) or sub-rule (4) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esents exceptional difficulties, the amount of the qualifying income shall be taken as the excess of such profits and gains ascertained by the Income-tax Officer on any other reasonable basis on the data available and included in the total income over the aggregate of the amount of any portion thereof on which income-tax or super tax is not payable and the amount in respect of which a deduction of income-tax or super tax has been granted under any of the provisions of the Act." (emphasis supplied). A conjoint reading of section 2(5)(i) of the Finance Act, 1963, and rule 2 of the Income-tax (Determination of Export Profits) Rules, 1963, makes it abundantly clear that the amount of profits and gains derived from exports with reference to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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