9911796707
TMI Blog2009 (5) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 before the end of Septembers, 1992, holding that the assessee had failed to prove that it was unable to remit the foreign exchange for reasons beyond its control. According to the petitioner, there was delay in bringing the foreign exchange to the tune of Rs.20,64,184/-, while foreign exchange equivalent to Rs.25,83,560/- was already remitted within the prescribed period. The deficit amount was also brought back in foreign exchange by the end of May, 1993. Due to rejection of application for extension of time, the petitioner would not be entitled to ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice 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.e. the erection and commissioning of the Pulses Plant. If as per the original contract, it would bring back the 50% of the profits and gains into India in foreign exchange upto 30.9.1992, it would be required to make further arrangement for finances for carrying out the work ad for that purpose, a lot of time would be required and it would cause unnecessary procedural formalities and delay. That would also cause loss of further contract and other penal consequences. To avoid this, it was necessary for the petitioner to carry out the additional w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 such a request for extension before expiry of the period of six months after the end of financial year because that request would be premature and the request could be made only if the concerned contractor cannot fulfill the obligation of bringing back the amount in foreign exchange as per the terms of Section 80HHB. The learned Counsel finds support from several authorities. Most of the authorities relied upon by the petitioner are under Section 80HHC which are in pari materia with section 80HHB except that Section 80HHB relates to the execution of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ope 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 invested with the power granted under sub-section (2)(a) for allowing further period, he can neither refuse nor deal with the same. Therefore, it is imperative on its part to place the same before the Chief Commissioner or Commissioner, as the case may be. The assessee may also bring the fact to the notice of the Chief Commissioner or Commissioner, but in that vent, no time limit can be applied except that the claim is to be made in the return to be filed." This authority was relied upon by the Calcutta High Court in Geekay Exim (India) Ltd. and another v.& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her 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 2nd 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 balance amount was retained outside India which could be brought into India only after the same had been realised from the ongoing jobs after 31-3-92. Early remittances could have been made only at the cost of on-going jobs which would have affected their timely completion and eventually would have resulted in the loss of reputation and business which is very important to sustain in the highly competitive foreign market." In our considered opinion, if extension of work was part of the same project, which the petitioner was to complete as per original contract and not separate and i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
