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TMI Blog2009 (5) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... commissioning of a plant of Pulses, Barley Soya Micronizing with all related service equipments. As per the said terms, the contract period was to be from 17.1.1991 to 16.1.1992. As per the provisions of Section 80HHB(3)(iii) of the Income Tax Act, as in force at that time, the petitioner was required to bring back 50% of profits and gains in convertible foreign exchange into India within period of six months from the end of the previous year i.e. the financial year to take benefit of deduction from the income for computation of Income Tax. As per this order and the provisions of law, earnings in foreign exchange were to be brought back on or before 30.9.1992. The petitioner filed returns for the assessment year 1992-93 on 29.1.1993. Thereafter, by letters dated 2.2.1993, 26.5.1993 and 3.8.1993 addressed to the Commissioner of Income Tax, the petitioner sought extension of time to bring in foreign exchange equivalent to 50% of profits and gains for the purpose of deduction under Section 80HHB of the Income Tax Act. The Commissioner of Income Tax by impugned order dated 5.8.1993 rejected the application to the extent of deficit in the amount which was to be brought back on or be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner may allow in this behalf. From this, it is clear that normally, 50% of the profits and gains should be brought into India in convertible foreign exchange within a period of six months. However, if for reasons beyond his control, the assessee is unable to bring the amount back within the period of six months, the period may be extended by the Chief Commissioner or Commissioner. 4. In the present case, the contract entered into with the foreign company was for erection and commissioning of the plant of Pulses, Barley etc. with all related service equipments and for this permission as taken from the Reserve Bank of India. As per the record, the original contract was worth DHS 2,220,150.00 and the contract was for a period of one year. According to petitioner, during the completion of that contract, the petitioner had an opportunity of carrying out other extra work which had been included as a part of the erection of the Pulses plant and due to this additional work, the revised contract value was DHS 7,515,200.64. Thus, there was substantial increase in the value of the contract. According to the petitioner, the additional work was the part and parcel of the same project i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the strengthening the competitiveness of our construction contractors, proposed to exempt 25% of the profits derived by them from such foreign contracts from computation of income tax and later on, the deduction was raised rom 25% to 50%. 6. The learned Counsel for the Revenue contended that if there were circumstances due to which the 50% of the profits and gains could not be brought back into India in foreign exchange within the specified period of six months i.e. on or before 30.9.1992, it was necessary for the petitioner to make a request to the concerned authorities and to seek extension of time in advance. He contended that the petitioner submitted the returns for the financial year 1991-92 (assessment year 19920-93) on 29.1.1993 and till that time no request was made for the purpose of extension of time. It made this request for the first time by a letter dated 2.2.1993 to the Commissioner of Income-tax and this request was repeated by its letters dated 26.5.1993 and 3.8.1993. It is contended that this belated request could not be considered. 7. The learned Counsel for the petitioner vehemently contended that it is neither expected nor it is possible to make su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(a) does not contemplate the making of any application by the assessee within a period of six months either for availing of the deductibility with respect to sale proceeds received in or brought into India as contemplated therein within a period of six months from the end of the previous year or for the purpose of invoking the power of the Chief Commissioner or Commissioner to allow further period in case the assessee is unable to receive in or bring into India the sale proceeds for reasons beyond his control. If such a position is accepted, then there is no scope for making any application for the purpose of having the benefit of further period before the expiry of six months. ON the other hand, it is our considered view that the deductibility claimed in the return is to be decided in computing the total income in case the six month-period has expired before the assessee received or brought into India the sale proceeds, in that event, it is for the assessing authority to place the same before the Chief Commissioner or Commissioner if the assessee proposes to satisfy that he was unable to do so for reasons beyond his control. Inasmuch as the assessing authority having not been in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as the stages of completion of contract and the receipts already made and the balance amount to be received to the Reserve Bank of India. While rejecting the application for extension of time, the Commissioner of Income Tax observed as follows :- "3. The question for consideration is whether the assessee was unable to remit this foreign exchange for reasons beyond its control. This foreign exchange was received by the assessee. If it so decided it could remit them to India. However, instead of remitting the amount to India, it decided to use that for purpose of some other jobs there. Its decision to do so is a voluntary decision. Therefore, the non-remittance cannot be said to be for reasons beyond its control. .." On perusal of material on record, we find that the petitioners had contended that while carrying out the main contract, they had opportunity of carrying out the other extra work, which had been included as part of the erection order for the Pulses plant. Petitioners also stated as follows in application dated 2 nd February 1993: " Since we have been working on extended jobs under this contract and we needed funds for re-deployment on the ongoing jobs, the bal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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