Section 80HHC exporter status turns on the export transaction and foreign exchange receivable, not private transfer arrangements.

Section 80HHC relief depended on the person who exported the goods and in whose favour the sale proceeds in convertible foreign exchange were receivable. The export was undertaken in the export house's name, the foreign buyer contracted with that export house, and the letter of credit stood in its name; the assessee had also accepted the declaration treating the export house as exporter. An internal arrangement transferring foreign exchange onwards did not alter that position. The statutory deduction therefore could not be claimed by the manufacturer, and the export house was the relevant exporter for the provision.

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Issues: Whether the assessee, which exported goods through an export house and received the foreign exchange under an internal arrangement, was entitled to deduction under section 80HHC of the Income-tax Act, 1961 as an exporter.

Analysis: The deduction under section 80HHC depended on two requirements: the assessee must export the goods and the sale proceeds must be receivable by the assessee in convertible foreign exchange. The Court held that title to the goods was not decisive, but the surrounding transaction showed that the export was undertaken in the name of the export house, the foreign buyer contracted with the export house, the letter of credit stood in the export house's name, and the foreign exchange was receivable by the export house. The assessee had also accepted the declaration treating the export house as exporter and could not later disown that position. The internal transfer of foreign exchange to the assessee under a separate arrangement did not make it the exporter for the purpose of the section.

Conclusion: The assessee was not entitled to deduction under section 80HHC; the export house was the exporter for the purpose of the provision.

Final Conclusion: The claim for deduction failed because the statutory benefit could not be claimed by both the export house and the manufacturer in respect of the same export and the same foreign exchange receipt.

Ratio Decidendi: For section 80HHC, the relevant exporter is the person in whose favour the export transaction and receivable foreign exchange stand, and a private arrangement for onward transfer of sale proceeds does not confer exporter status on another participant.

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