2003 (9) TMI 704

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.... R.V. Easwar, JM.-There are cross-appeals relating to the assessment year 1994-95. The assessee is a partnership firm engaged in the business of importing rough diamonds, getting them cut and polished and exporting them. 2. The dispute, which is common to both the appeals, relates to the computation of the deduction under section 80HHC of the I.T. Act. The only question is whether the premium ....

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....nbsp; Total turnover   did not include the premium in the "total turnover" on the ground that it is an incentive for exports under section 28(iiib) of the I.T. Act. On account of full convertibility of rupee on trade account, there was a fall in the exchange value of the rupee vis-a-vis dollar. The imports therefore became expensive. Realising this difficulty, the Government of India....

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....it is an incentive. He concluded that the premium which was given to the exporters was directly related to the import licences which in turn are issued to them against exports or export-obligations. The premium thus relates to the business activity and should form part of the turnover. At any rate, it cannot be considered to be an incentive and excluded under the proviso to Explanation ( ba) from,....

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....s" was directed to be included in the "total turnover". He thus partly upheld the assessee's claim and partly upheld the Assessing Officer's view. 6. While the assessee is in appeal against the view of the CIT(A) that the premium received on surrender of "market licences" cannot be excluded from the "total turnover", the Department is in appeal against his view that the premium received on surr....