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TMI Blog1982 (4) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... nd exporting the same to other countries. During the year under consideration, the assessee had made export sales to the tune of Rs. 1,98,99,745 against its total sales of Rs. 37,20,15,963. Certain rebate was granted in taxation in respect of profits and gains made on exports to which we shall presently refer. For the purposes of determining that rebate, the assessee filed before the ITO calculation of export profits as under : Export profits Rs. 1,98,99,745 ----------------------- x 3,94,91,546 equal to Rs. 33,08,179. 23,80,12,861 The assessee took the dividing factor at Rs. 23,80,12,861 by deducting a sum of Rs. 13,50,03,102, being, the excise duty paid by the assessee during the said previous year from the total turnover. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the whole business of the assessee and the fraction be determined accordingly ? It is common ground that the provisions which come up for our consideration in this matter are cls. (i) and (vi) of sub-s. (5) of s. 2 of the Finance Act, 1963 (referred to hereinafter as " the said Finance Act "), and sub-r. (3) of r. 2 of the Income-tax (Determination of Export Profits) Rules, 1962 (referred to hereinafter as " the said Rules ") : The relevant portion of s. 2(5) of the said Finance Act reads as follows: " 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 declaration and pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the total turnover of the business of which such exports form a part. " It was the agreed position before the Tribunal that the amounts of profits and gains derived from exports by the assessee, with reference to which a deduction of tax was admissible under the said Finance Act, had to be calculated in accordance with the provisions of sub-r. (3) of r. 2 of the said Rules, as such profits and gains could not be ascertained, the assessee not having kept separately accounts of profits and gains of such business.. The submission of Mr. Munim, the learned counsel for the assessee, is that although the said sub-r. (3), did not expressly so provide, the amount of excise duty paid by the assessee should be deducted from the total turn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover as suggested by Mr. Munim. After all, the excise duty forms part of the sale price and hence gets naturally included in the turnover. In this regard, we may refer to the relevant observations of the Supreme Court in Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13. At pp. 27 and 28, the said observations run as follows: Take for example, excise duty payable by a dealer who is a manufacturer. When he sells goods manufactured by him, he always passes on the excise duty to the purchaser. Ordinarily, it is not shown as separate item in the bill, but it is included in the price charged by him. The 'sale price' in such a case could be the entire price inclusive of excise duty because that would be the consideration paya ..... X X X X Extracts X X X X X X X X Extracts X X X X
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