TaxTMI 
TaxTMI 
2019 (3) TMI 1542
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.... on the facts and in the circumstances of the case and in law the authorities below erred in law on the following:- 1. In bringing to tax a sum of Rs. 23,45,668/- pertaining to duty draw back and otherwise not allowing rebate u/s 10B of the Act thereon. 2. In not reducing the sale scrap in a sum of Rs. 53,34,092/- from the cost of sale and setting it off merely from the turnover." ITA No. 3921/DEL/2011 (Revenue's appeal) "1. That on the facts and in the circumstances of the case and in law the Ld.CIT(A) has erred in directing the A.O to compute deduction u/s 10B by including the constructive export of Rs. 4,36,65,896/- to arrive at the total turnover of the assessee. 2. The Ld.CIT(A) failed to appreciate that no goods were sent (export....
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.... 'D' (A) Export Sales 356542912 e) Domestic Sale 67261236 f) Scrap Sale (wastage) 5334092 (B) Domestic sale 72595328 (A+B) Total Turnover 429138240 However the Assessee company is availing Exemption u/s 10B of the Income Tax Act, 1961 on the following sales:- Export Sale a) Physical Export Rs. 312480000 ] as per chart 'C' enclosed b) Constructive Export Rs. 43665896 ] as per chart 'C' enclosed c) Exchange Fluctuation Rs. (3044122) d) Type Setting & Scanning Rs. 3441138 ] STP Forms & Payment advice received are enclosed The Assessing Officer made addition in respect of disallowance u/s 10B on account of duty draw back claim and not including income from typesetting and scan and exchange rate fluctuation as....
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..... We have heard both the parties and perused the material available on record. The issue contested herein is very much identical to the issue decided by the Hon'ble Delhi High Court in case of Sadhu Forging Ltd. (supra). The Hon'ble High Court held as under: "Keeping in view of the activities of the assessee in giving heat treatment for which it had earned labour charges and job-work charges, it can thus be said that the appellant had done a process on the raw material which was nothing but a part and parcel of the manufacturing process of the industrial undertaking. These receipts cannot be said to be independent income of the manufacturing activities of the undertakings of the assessee and thus could not be excluded from the profits and ....
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....therefore exemption u/s 10B was not allowable to the assessee in respect of constructive exports. 10. The Ld. AR submitted that the orders for the constructive export were received from foreign publishers. Books were delivered as per direction of the foreign parties after approval and clearance of Custom (NEPZ), RBI etc. The payments for the constructive export were also received from foreign publishers in convertible foreign exchange. The Ld. AR submitted these are identical features between constructive export and physical export. The only difference between these two export was that the delivery of goods was made to the agents (importers) of foreign buyers in India. It is an admitted fact that the goods under the constructive export did....
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....Supreme Court in case of J B Bora 197 ITR 271. The Ld. AR further submitted that in fact in assessee's own case for Assessment Year 2005-06, the Hon'ble High Court decided this issue in favour of the assessee. 11. We have heard both the parties and perused the material available on record. The CIT(A) held as under: "7.4 On careful examination of the mater, I find that the claim of the appellant with regard to the constructive export has been allowed by the department in scrutiny assessments made in earlier years, i.e. A.Y. 2005-06 to A.Y. 2007-08. Further, as per the facts relating to constructive export, it is found that in this kind of export, the appellant supplies the published material to local shopkeepers who are importers of bo....
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....ents of goods. This claim was also allowed by the Revenue in A.Ys. 2005-06 to 2007-08, therefore, rule of consistency also has to be applied. Besides this, the Hon'ble High Court in assessee's own case WP (c) No. 13838 of 2009 order dated 22.01.2013 held as under: "10. We have heard the counsel for the parties and we may straightaway state that his is a clear case of change of opinion as also a case which was beyond the jurisdiction of the revenue audit which had pointed to the so-called discrepancies on paints of law, particularly, on an interpretation of Section 10B of the said Act. 11. In so far as the change of opinion is concerned, it is writ large from the records of the case. The Assessing Officer had specifically raised a query wi....