TaxTMI 
TaxTMI 
TaxTMI 
2004 (11) TMI 27
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....goods worth Rs. 1,07,80,835. A sum of Rs. 3,53,000 was due as outstanding from three foreign buyers as on March 31, 1997. An application for extension of time as required under section 80HHC(2)(a) of the Income-tax Act (hereinafter referred to as "the Act") was filed by the petitioner before the Commissioner of Income-tax. The Commissioner of Income-tax by means of the impugned order dated August 6, 1999, has allowed the said application in part. It has granted extension of time for not bringing the sale proceeds of the goods exported by the petitioner to M/s. Andersen, Germany, but has refused to extend the time in respect of the foreign buyers, namely, M/s. Prime Leather Enterprises USA, and M/s. Horseman, USA. Section 80HHC of the Act provides deduction in respect of profits retained for export business. This section was inserted with a view to increase large export of certain goods. It provides certain tax relief to the exporters. One of the conditions to claim the benefit of the special deduction under section 80HHC(2)(a) is that the sale proceeds of the specified goods or merchandise exported out of India, are received in, or brought into, India by the assessee in convertibl....
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....nbsp; 3. M/s. Horseman Corral, Invoice number 52 1,88,860 Modestoca, USA dated 4-3-1997 brought in India on 13-4-1998 - Rs. 78,495 on 16-8-1998- Rs. 1,10,065 ------------------------------------------------------------------------------------- As mentioned above, the Commissioner of Income-tax by the impugned order has refused to extend the time in respect of the buyers at serial Nos. 1 and 3 and has extended the time with respect to the buyer at serial No. 2. It has come on record that the convertible foreign exchange in respect of the buyer at serial No. 3, has been brought in India, on April 13, 1998, Rs. 78,495 and on June 16,1998, Rs. 1,10,065. The reason given by the Commissioner of Income-tax is that the petitioner had sufficient time for realising the sale proceeds and bringing the same into India. No sincere and genuine efforts were made to bring the sale proceeds into India within the normal time permissible under section 80HHC(2)(a) of the Act. Also one cannot rule out the possibility of the fact that the assessee expected a higher yield in terms of the Indian rupee by delaying receipt of sale proceeds....
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....and Co. v. CIT [2001] 248 ITR 162 has held that the expression "such further period", though not defined in the Act, keeping in view the limitation prescribed under the Act for completion of assessment within two years from the end of the assessment year, the extension contemplated by section 80HHC(2)(a) can be granted for the period ending with the expiry of two years from the end of the assessment year. To put it differently, if the sale proceeds of the goods or merchandise exported out of India are received or brought into India by the assessee in convertible foreign exchange within the period of two years from the end of the assessment year and the assessee shows that the amount could not be brought or received earlier on account of reasons beyond his control, then the concerned authority is obliged to grant extension of time. The aforesaid judgment has been followed by the Calcutta High Court in Mountview Exports Pvt. Ltd. v. CIT [2002] 258 ITR 46. Now we venture to examine the relevant facts of the case with respect to invoice No. 3 dated February 12, 1996, through which the goods were exported to M/s. Prime Leather Enterprises. The explanation given by the petitioner was th....
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.... convertible foreign exchange by the specified date in order to find out as to whether the assessee-petitioner deliberately delayed the receipt of sale proceeds of the goods exported by it in expectation that fall in value of Indian rupee would fetch it a higher yield. The power to extend time under section 80HHC(2)(a) has been given to the competent authority with certain purposes. The said power should be exercised in a quasi-judicial manner and with a view to achieve the purpose. The non-extension of the period of about 34 days for such a small amount in comparison to the aggregate exports is arbitrary and respondent No. 1 committed illegality in not extending the time with respect to the goods exported to M/s. Prime Leather Enterprises, USA. Now we take up the petitioner's case for extension of time in respect of the goods exported by it to M/s. Horseman, USA, in respect of invoice No, 52 dated March 4,1997. The Commissioner of Income-tax has not doubted that the payments have been received and brought into India in convertible foreign exchange in two instalments on April 13, 1998, and June 16,1998, total Rs. 1,88,860. The petitioner sought the extension of time and came out ....
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....l economy. Under section 80HHC(2)(a) of the Act the relevant consideration is whether the assessee is "for reasons beyond his control" unable to bring the convertible foreign exchange into India within a period of six months from the end of the previous year. The Commissioner of Income-tax has not disbelieved the personal visit of a partner of the petitioner-firm to the buyer's place and the request for early payment. The petitioner has written letters and reminders asking the foreign buyer to make the early payment. The question which arises is as to whether in such circumstances it could be said that the sale proceeds of the goods or merchandise exported out of India are not brought in India by the assessee within the period of six months from the end of the previous year "for reasons beyond his control". The Commissioner of Income-tax has failed to record any finding that the sale proceeds could not be brought into India within the specified period by the assessee "for reasons beyond his control". The order of the Commissioner of Income-tax is based on the supposition that as the value of the Indian rupee has fallen in the mean time and correspondingly the petitioner-assessee th....