TaxTMI 
TaxTMI 
2014 (7) TMI 1127
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....ed Commissioner of Income-tax (Appeals) failed to appreciate that the terms of section 10B read with the foreign trade policy in force at the relevant time the NFE (net foreign exchange earnings) was in favour of the appellant supporting its claim for under section 10B. (c) The learned Commissioner of Income-tax (Appeals) failed to appreciate that deemed exports are also exports for the purpose of computation of deduction under section 10B and the usage 'export of goods' cannot be construed as 'export out of India'. Consequently, the learned Commissioner of Income-tax (Appeals) erred in upholding the restricted deduction under section 10B. He ought to have allowed the valid claim made under section 10B for the total amount of Rs. 2,52,37,535. 3) The learned Commissioner of Income-tax (Appeals) has not considered for calculation of exemption under section 10B, the profits of business as per the Income-tax Act instead of book profit." 4)......  ....
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.... : "Exports and imports are regulated by the Customs Act, 1962 which, among others, repealed the Sea Customs Act, 1878. Section 2(18) of the Customs Act defines 'export' to mean 'taking out of India to a place outside India'. As defined in section 2(16) of the Customs Act 'entry' in relation to goods, inter alia, means an entry made in a bill of entry, shipping bill or bill of export. Sections 50 and 51 of the Customs Act stipulate the procedure for entry of goods for exportation as well as clearance of goods for exportation. For ready reference they are quoted below- '50. Entry of goods for exportation.-(1) The exporter of any goods shall make entry thereof by presenting to the proper officer in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export in the prescribed form. (2) The exporter of any goods, while presenting a shipping bill or bill of export, shall at the foot thereof make and subscribe to a declaration a....
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.... per cent. export oriented units from the export of articles or things for a period of 10 years. Section 80HHC of the Act is to the effect that an assessee, being an Indian company engaged in the business of 'export out of India', may be allowed deduction of the profits to the extent specified in section 80HHC(1B) of the Act. The Explanations to all these provisions has a definite bearing in understanding section 10B(3) of the Act on which the petitioner's counsel placed considerable emphasis. For ready reference, we quote the same hereunder. '10B(3). This section applies to the undertaking, if the sale pro ceeds of articles or things or computer software exported out of India are received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf.' The language of section 10B(3) of the Act is plain. It does not admit any other meaning than what is conveyed by the language used therein. The benefit under section 10B(1) of the A....
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....or things or computer software received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (3), but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India ; "export out of India" shall not include any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situated in India, not involving clearance at any customs station as defined in the Customs Act, 1962 (52 of 1962) ; Explanation (b) "export turnover" means the sale proceeds received in, or brought into, India by the assessee in convertible foreign exchange in accordance with clause (a) of sub-section (2) of any goods or merchandise to which this section applies and which are exported out of India, but does not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962 (52 of 1962) ; Sections 10A, 10AA, 10B and 80HHC of the Act allow an assessee to....
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....#39; It is the admitted position herein that initially Proteco agreed to take delivery of wire/cable drawing machines at Hyderabad ex-factory, subsequently Proteco sent a communication advising the appellant to deliver the machinery to their agent at Silvasa which is also a 100 per cent. export oriented units, the payment was received in convertible foreign exchange as evidenced by the FIRC, and the goods were delivered to the agent under a proforma invoice in the name of the foreign buyer. This transaction of manufacturing machines in India by an export oriented units and delivering them in India to another 100 per cent. export oriented units, which is alleged to be the agent of a foreign buyer, does not amount to 'export out of India' either under the Customs Act or under the Income-tax Act. The Assessing Officer, the appellate authority and the learned Tribunal appreciated the principle of law and applied it correctly. The appeal is misconceived." 4. In the absence of any decision to the contrary brought to our notice, respectfully following the above binding decision of the jurisdictional High Court, which squarely covers the issue against the assessee and clearly hol....