TaxTMI 
TaxTMI 
2001 (6) TMI 181
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....he export house. The assessee-company sold goods to the export house during the assessment year l991-92. The export house had in turn exported these goods during the assessment year 1992-93. The export house issued a certificate in Form No. 10CCAB in respect of the assessment year 1992-93 only as it had exported these goods in that year. The assessee claimed deduction under section 80HHC for assessment year 1991-92 as it had sold the goods to the export house during that assessment year. This claim is made irrespective of the date of export by the export house. The Assessing Officer disallowed the claim stating that the assessee-company has not exported the goods through the export house during that year. The contention of the assessee-comp....
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....claim deduction only to the extent the export house disclaims the deduction and that the question of sharing the fruit of deduction arises only when the goods are exported. He relied on the term 'exported' specifically mentioned in Form 10CCAB and contended that the primary condition for generating deduction under section 80HHC is export of goods outside the country and that section 80HHC(1) and (1A) provides for sharing of the deduction. 4. The Ld. DR further argued that the goods sold by the supporting manufacture to the export house have formed the closing stock of the export house at the end of the financial year and as such are not eligible for the deduction under section 80HHC. He filed a copy of the illustration given in the book ....
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....eduction of the profits derived by the assessee from the sale of goods or merchandise to the export house or trading house qualifies for deduction under the section in the year of sale only. 6. Replying to these arguments, Ld. Departmental Representative argued that this sub-section cannot be viewed in isolation and a further reading of the section requires that the deduction be restricted to the extent to which the certificate has been issued by the export house or trading house. He stated that the goods sold by the supporting manufacturer to the export house formed part of the closing stock of the export house as on 31st March and there is no dispute about it. The export of these goods had been done by the export house only in the next....
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....turer. 8. The fact that the certificate has been issued by the export house proves that the goods purchased from this supporting manufacturer, were ultimately exported and this should enable the supporting manufacturer to claim appropriate deduction under this section in the year of its supply to the export house. Any other interpretation would defeat the legislative intention of promoting exports and earning foreign currency by providing appropriate incentives to the deserving assessees. If at all an interpretation is taken that the supporting manufacturer is entitled to a deduction only in the year in which the export house exports the goods, it might result in an unjust and absurd result wherein the supporting manufacturer would be de....