Export deduction limited to the real exporter where export houses had contractual privity and already claimed the benefit.

Deduction for export profits under the relevant version of section 80HHC was available only to the real exporter. Where export houses had privity of contract with foreign buyers, were treated as exporters in the agreements, and had already claimed the benefit, a supporting processor exporting on their account could not claim the same deduction. The absence of a direct contractual relationship with the foreign buyers and the later statutory requirement of a disclaimer certificate reinforced that dual claims were not permitted. The processor's claim was therefore rejected, and the deduction was held unavailable on those exports.

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Issues: Whether the assessee was entitled to deduction under section 80HHC of the Income-tax Act, 1961, for exports routed through export houses where the export houses had privity of contract with the foreign buyers and had already claimed the deduction.

Analysis: The deduction under section 80HHC, as it stood for the relevant assessment year, was available only to the exporter of the goods. The agreements showed that the export houses had contracted with the foreign buyers, while the assessee processors exported the goods only on account of the export houses. The export houses were described as exporters in the agreements, the letters of credit were initially opened in their names, and the export documents were prepared on their account. The assessee had no direct contractual relationship with the foreign buyers and no cause of action against them. The later statutory scheme allowing supporting manufacturers to claim the benefit required a disclaimer certificate from the export house, showing that the benefit could not be claimed simultaneously by both. Since the export houses had already claimed and obtained the deduction, the assessee could not also claim it.

Conclusion: The assessee was not entitled to deduction under section 80HHC for the exports routed through the export houses; the question was answered against the assessee and in favour of the Revenue.

Ratio Decidendi: For the relevant period, deduction under section 80HHC was available only to the real exporter, and where export houses had contractual privity with the foreign buyers and had claimed the benefit, the supporting processor could not also claim the same deduction.

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