TaxTMI 
TaxTMI 
2021 (1) TMI 745
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....25,865/- on the ground that out of the total export turnover of Rs. 4.25,32,628/-, the foreign exchange realized was only Rs. 2,10,35,760/- by refusing to take into consideration of the payment of Rs. 2,14,96,917/-, which was adjusted towards the imports of certain raw materials made by the assessee for the manufacture of the very same goods which were exported. 2.2 According to the appellant-assessee, the word 'sale proceeds' occurring in section 10B(3) cannot be construed to be only as the total value of the goods exported but would need to be interpreted as net sale proceeds when the competent authority, viz., the Reserve Bank of India, permits such realization of foreign exchange of net sale value. 2.3 The appellant contended that the statutory authority failed to take into consideration the fact that when the competent authority under section 10B(3), viz., the Reserve Bank of India, permits realization of net sale value as against the realization of the total value of the goods exported as compliance with its provision and other related statutory provisions dealing with the foreign exchange, the Income Tax authority could not be allowed to interpret the word '....
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.... amount is one not received in convertible foreign exchange. We are of the view that the income is received in India in convertible foreign exchange, in a lawful and permissible manner through the premier institution concerned with the subject-matter -- the Reserve Bank of India. In this view, we hold that the proceedings of the Central Board of Direct Taxes dated 11.3.1986, declining to approve the agreements of the appellant with M/s Sedgwick offshore Resources Ltd. London for the purposes of section 80-0 of the Income-tax Act, are improper and illegal. We declare so. we direct the respondent to process the agreements in the light of the principles laid down by us herein above. The appeal is allowed. There shall be no order as to costs.?" Further, the Hon'ble Supreme Court held that an assessee acting as agent of foreign reinsurer, collecting premia from the ceding Insurance Company in India and remitting the same to the foreign insurer in foreign exchange, with the permission of the RBI, after retaining the brokerage in foreign exchange, the brokerage income retained by assessee is receipt of income in convertible foreign exchange qualifying for deduction under section 80....
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....itual, on the facts of this case. On a perusal of the nature of the transaction and in particular the statement of remittance filed in the Reserve Bank of India regarding the transaction, we are unable to uphold the view of the respondent that the income under the agreement is generated in India or that the amount is one not received in convertible foreign exchange. We are of the view that the income is received in India in convertible foreign exchange, in a lawful and permissible manner through the premier institution concerned with the subject-matter the Reserve Bank of India. In this view, we hold that the proceedings of the Central Board of Direct Taxes dated 11-3-1986, declining to approve the agreements of the appellant with Sedgwick Offshore Resources Ltd., London, for the purposes of section 80O of the Income-tax Act, are improper and illegal. We declare so. We direct the respondent to process the agreements in the light of the principles laid down by us hereinabove. The appeal is allowed. There shall be no order as to costs" 9.. The Tribunal did not commit any error in finding that the principle of laid down in J.B. Boda & Co. (P.) Ltds case (supra) will be applic....
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....e appellant in any manner whatsoever for the reason that the subject amtter of teh appeal is pertaining to the assessment year 2004-05. Even the Hon'ble Supreme Court in the judgment reported in (1997) 223 ITR 0271 (cited supra) held that the assessee should get prior permission from the RBI. 12. In the Judgment reported in (2012) 21 taxmann.com 314 (cited supra), the Allahabad High Court held that Explanations 1 and 2 to section 10B(3) of the Act is not attracted to the subject matter of the appeals therein. The Hon'ble Supreme Court in the Judgment reported in 1997) 223 ITR 0271 (cited supra) clearly held that prior approval is mandatory. Hence, Explanations 1 and 2 to section 10B(3) are applicable to the case on hand. 13. The materials available on record would clearly establish that the appellant had not obtained prior approval from the RBI as contemplated under Explanations 1 and 2 to section 10B(3) of the Act. That apart, Form 56G would reflect that the Foreign Inward Remittances with regard to the sale proceeds have not been brought in foreign currency during the previous year and within six months period. As per Section 10B of the Act, the entire sale proce....