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TMI Blog1977 (8) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 24,13,040 and claimed deduction from income-tax in respect of such exports or sales to exporters under s. 2(4)(a)(ii) and (iii) of the Finance (No. 2) Act, 1967. It should be noted that the aforesaid two provisions of the respective Finance Acts are in pari materia. The ITO rejected the claim made by the assessee holding that on a plain reading of the relevant exemption clause and s. 2(5)(c) or s. 2(4)(c), as the case may be, of the respective Finance Acts, it was clear that the industry engaged in the manufacture or production of vegetable oils and vanaspathi was not entitled to exemption. The assessee's claim for exports in the course of the accounting year corresponding to the assessment year 1967-68 was also rejected for identical reasons. The assessee-firm, therefore, carried the matter in appeal before the AAC, who by his common order of December 8, 1977, accepted the claim made by the asessee for both the assessment years and accordingly directed the ITO to grant deduction as claimed by the assessee. The revenue, therefore, preferred appeal before the Appellate Tribunal. The Appellate Tribunal, following the decision of the Bombay Bench of the Tribunal in the case of O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with which he is chargeable for the assessment year, of an amount equal to the income-tax calculated at the average rate of income-tax on an amount equal to two per cent. of the sale proceeds receivable by him in respect of such export.... (iii) where he is engaged in the manufacture of any articles in an industry specified in the said First Schedule and has, during the previous year, sold such articles to any other person in India who himself has exported them out of India, and evidence is produced before the Income-tax Officer of such articles having been so exported, the assessee shall be entitled to a deduction, from the amount of income-tax with which he is chargeable for the assessment year, of an amount equal to the income-tax calculated at the average rate of income-tax on a sum equal to two per cent. of the sale proceeds receivable by him in respect of such articles from the exporter ....... (c) Nothing contained in sub-clause (ii) or sub-clause (iii) of clause (a) shall apply in relation to-- (1) fuels, (2) fertilisers, (3) photographic raw film and paper, (4) textiles (including those dyed, printed or otherwise processed) made wholly or in part of jute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tentions of the revenue must prevail obviously for the following reasons: We must admit at the outset that the legislative intent is not happily brought out in sub-cls. (ii) and (iii) of cl. (a) as well as in cl. (c) of s. 2(5) of the Finance Act, 1966. However, on reading the relevant sub-cls. (ii) and (iii) of cl. (a) and particularly cl. (c), we are of the opinion that the contentions urged on behalf of the revenue are well founded. Sub-clauses (ii) and (iii) of cl. (a) provide for the exemption. The exemption is granted not to all the industries but to those industries which are specified in the First Schedule to the Industries (Development and Regulation) Act, 1951. It is no doubt true that concession under the said sub-clauses is in respect of any of the articles manufactured by the qualified industries. If we look to the First Schedule to the Industries (Development and Regulation) Act, 1951, we find that the said Schedule specified different industries which are sought to be regulated by the said Act. The specified industries are again sub-divided in the said Schedule. As for example, fuel industry is sub-divided into coal, lignite, coke and their derivatives, mineral oil ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by these industries. Sub-clauses (ii) and (iii), therefore, extend concession to the specified industries, no doubt, with reference to the articles manufactured by such industries. Clause (c), on the other hand, withdraws this concession with reference to the industries. It is no doubt true that item No. 5 or for that matter item No. 11 of cl. (c) of s. 2(5) excludes newsprint and cigarettes from the purview of the concession extented under sub-cls. (ii)and (iii) and these two items are not referable to the broad heads of the industries specified in the First Schedule, because newsprint is a part of paper industry while cigarettes are part of miscellaneous industries. To that extent, it may be possible to argue that cl. (c) takes away the concession in respect of the articles though we do not intend to express our final opinion on this point because that is not the subject-matter of the questions directly arising before us. It is only for purposes of construction of cl. (c)that we are examining this position and even if we agree with the learned advocate for the assessee, it does not follow that in respect of other items mentioned in cl. (c) the reference is to the articles an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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