Travancore Cocotuft P. Ltd, Alappuzha V. The ACIT, Cir-1, Alappuzha

ITA 199/COCH/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2070 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-06-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 02-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: R KRISHNAN
• Keywords: Deemed export; Competent authority
• Section: 143(3); 10B; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M I .T . A. NO . 199 / COCH/ 2 01 8 ASSESSMENT YEAR : 20 08 - 09 M/S. TRAVANCORE COCOTUFT PVT. LTD., 229/CMC, VELORVATTOM, CHERTHALA, ALLEPPEY - 688 524. [PAN: A ABCT 2096F] VS. THE ASSISTANT COMMISSIONER OF IN COME - TA X , CIRCLE - 1, ALAPPUZHA. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) A SSESSEE BY S HRI R. KRISHNAN, CA REVENUE BY SMT. A.S. BINDHU, SR. DR D ATE OF HEARING 19/06/2019 DATE OF PRONOUNCEMENT 19/06/2019 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) , KOTTAYAM DATED 21 /0 2 /2018 AND PERTAIN TO THE ASSESSMENT YEAR 20 08 - 09 . 2. AT THE OUTSET, T HERE WAS A DELAY OF 03 DAY S IN FILING THE APPEA L BEFORE THE TRIBUNAL. THE LD. AR HAS FILED CONDONATION PETITION ACCOMPANIED BY AN AFFIDAVIT DT. 2 6/0 7 /201 8 WHEREIN IT WAS STATED THAT THE ASSESSEE S CHARTERED ACCOUNTANT WAS INITIALLY BUSY WITH THE INCOME TAX FILINGS, COMPANY FILINGS UNDER CONDONATION O F DELAY SCHEME UNDER MCA AND BANK AUDITS. LATER ON, THE CHARTERED ACCOUNTANT FELL I.T.A. NO . 199 /COCH/201 8 2 ILL AND COULD NOT ATTEND THE OFFICE FOR FEW DAYS. IT WAS SUBMITTED THAT BY THE TIME APPEALS WERE DRAFTED, CORRECTED AND FILED, THERE OCCURRED A DELAY OF 03 DAYS IN FILING THE APPEAL. THUS IT WAS SUBMITTED THAT THE DELAY IN FILING THE APPEAL WAS DUE TO REASONS BEYOND THE CONTROL OF THE ASSESSEE AND NOT WILLFUL AND INTENTIONAL AND PRAYED THAT THE DELAY MAY BE CONDONED AND THE APPEAL DISPOSED OF ON MERITS. 2.1 WE HAVE HEA RD THE RIVAL SUBMISSIONS AND GONE THROUGH THE REASONS ADVANCED BY THE ASSESSEE FOR FILING THE APPEAL BELATEDLY BEFORE THIS TRIBUNAL. WE ARE SATISFIED WITH THE REASONS EXPLAINED BY THE ASSESSEE FOR FILING THE APPEAL BELATEDLY. ACCORDINGLY, WE CONDONE THE DELAY OF 03 DAYS IN FILING THE APPEAL AND ADMIT THE APPEAL FOR ADJUDICATION. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE EXCLUSION OF RS.10,77,995/ - FROM THE EXPORT TURNOVER, ON THE GROUND THAT THE APPELLANT HAD NOT RECEIVED THE SALE PROCEEDS WITHIN 6 MONTHS FROM THE END OF THE PREVIOUS YEAR. 2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE NOTICED THAT THIS IS ONLY A PROCEDURAL REQUIREMENT, S O MUCH SO, IT CANNOT BE A REASON FOR EXCLUSION OF THE AMOUNT FROM EXPORT TURNOVER. 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN EXCLUDING RS.1,61,62,499/ - FROM THE PURVIEW OF EXPORT TURNOVER ON THE GROUND THAT INTER - UNIT SALES ARE NOT TR EATED AS EXPORT WITHIN THE MEANING OF SECTION 10A OF THE ACT, NO MATTER SUCH TRANSFER ARE TREATED AS EXPORT SALES FOR THE PURPOSE OF CUSTOMS & EXCISE DUTY EXEMPTION. I.T.A. NO . 199 /COCH/201 8 3 4) THE LEARNED OFFICERS OUGHT TO HAV E UNDERSTOOD THAT DEEMED EXPORT IS A CONCEPT ACCEPTE D IN LAW AND SCHEME OF THINGS. SO LONG AS THE GOODS STAND EXPORTED AND THE COUNTRY EARNS FOREIGN EXCHANGE, IT OUGHT TO BE ACCEPTED AS EXPORT TURNOVER OF THE APPELLANT. 5) THE CONSEQUENTIAL RESTRICTION OF DEDUCTION U/S. 10B IS BAD IN LAW. 6) HAVING REGAR D TO THE VARIOUS DECISIONS OF THE SUPREME COURT ON THE ISSUE, THE DECISION OF THE LOWER AUTHORITIES IS BAD IN LAW. 4 . THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2008 - 09 ON 18/09/2008 DECLARING AN INCOME OF RS.22,83,4 22/ - . THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE I.T. ACT BY ACCEPTING THE INCOME RETURNED. ON SUBSEQUENT VERIFICATION OF RECORDS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HA D CLAIMED DEDUCTION UNDER SECTION 10B OF THE ACT ON THE EXPORTS MADE THROUGH THE THIRD PARTY AND ALSO ON THE SALE PROCEEDS WHICH WERE NOT BROUGHT WITHIN SIX MONTHS TO I NDIA. THEREFORE, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 OF THE ACT ON 28.03.2014 AND COMPLETED THE ASSESSMENT UNDER SECTION 143(3) R.W.S . 147 OF THE ACT BY ASSESSING THE INCOME AT RS. 54,05,049 / - . ACCORDING TO THE ASSESSING OFFICER, SECTION 10B CLEARLY SPECIFY THAT THE DEDUCTION CAN BE CLAIMED ONLY FROM THE CONSIDERATION IN RESPECT OF THE EXPORT BY THE UNDERTAKING ALONE AND E XPORTS BY TH IRD PARTIES CANNOT BE CONSIDERED AS THE EXPORT BY THE UNDERTAKING. HENCE, THE DEEMED EXPORTS AMOUNTING TO RS. 1,61,62,499 WAS DEDUCTED FROM THE EXPORT TURNOVER FOR THE PURPOSE OF COMPUTING THE DEDUCTION I.T.A. NO . 199 /COCH/201 8 4 ALLOWABLE UNDER SECTION 10B. THE ASSESSING OFFICER PL ACED R ELIANCE ON THE DECISION OF BANGALORE BENCH OF IT AT IN THE CASE OF TATA ELXSI LTD VS ACIT. 4.1 MOREOVER , ACCORDING TO THE ASSESSING OFFICER, THE CONSIDERATION RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE, WHICH WAS NOT BROUGHT TO I NDIA WITHIN SIX MONT HS TO I NDIA, HAS TO BE EXCLUDED FROM EXPORT TURNOVER FOR COMPUTING THE ELIGIBLE DEDUCTION UNDER SECTION 10B. AS PER THE DETAILS FURNISHED BY THE ASSESSEE, AN AMOUNT OF RS. 10,77,995 / - WAS NOT RECEIVED WITHIN SIX MONTHS. THIS AMOUNT WA S ALSO DEDUCTED FROM EXPORT TURNOVER WHICH WAS UPH ELD IN COMMISSIONER OF INCOME TAX, COCHIN VS ELECTRONIC CONTROLS A DISCHARGE SYSTEMS P LTD 13 TAXMANN.COM 193 . 5. ON APPEAL, THE CIT(A) OBSERVED THAT E VEN THOUGH THE ASSESSEE DISPUTED THE ACTION OF THE ASSESSING OFFICER ON T HIS ISSUE BUT HAS NOT EXPLAINED HOW SUCH ACTION IS CONTRARY TO THE PROVISIONS OF THE ACT. ACCORDING TO THE CIT(A), THE PROVISIONS OF SUBSECTION 3 OF THE SECTION 10B READ AS UNDER: '(3) THIS SECTION APPLIES TO THE UNDERTAKING, IF THE SALE PROCEEDS OF ARTI CLES 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 COMPETE NT AUTHORITY MAY ALLOW IN THIS BEHALF, EXPLANATION 1 . - FOR THE PURPOSE OF THIS SUB - SECTION THE EXPRESSION COMPETENT AUTHORITY MEANS THE RESERVE BANK OF INDIA OR SUCH OTHER AUTHORITY AS IS AUTHORISED UNDER ANY LAW FOR THE TIME BEING IN FORCE FOR REGULATING PAYMENTS AND DEALINGS IN FOREIGN EXCHANGE. I.T.A. NO . 199 /COCH/201 8 5 EXPLANATION 2. - THE SALE PROCEEDS REFERRED TO IN THIS SUB - SECTION SHALL BE DEEMED TO HAVE BEEN RECEIVED IN INDIA WHERE SUCH SALES PROCEEDS ARE CREDITED TO A SEPARATE ACCOUNT MAINTAINED FOR THE PURPOSE BY THE ASSESS EE WITH ANY BANK OUTSIDE INDIA WITH THE APPROVAL OF THE RESERVE BANK OF INDIA. 5.1 THEREFORE, THE CIT(A) HELD THAT AS PER THE PROVISIONS OF SECTION 10B(3) OF THE ACT, ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 10B ONLY IF THE SALE PROCEEDS OF THE EXPORTS ARE RECEIVED WITHIN SIX MONTHS FROM THE END OF THE PREVIOUS YEAR OR ANY FURTHER TIME GRANTED BY COMPETENT AUTHORITY. AS THE ACTION OF THE ASSESSING OFFICER IS IN ACCORDANCE WITH THE PROVISIONS OF THE ACT , THE CIT(A) DISMISSED THE GROUND RAISE D BY THE ASSESSEE . 6. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LD. DR RELIED ON THE ORDER OF THE CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. AS RIGHTLY POINTED OUT BY THE CIT(A), THE SALE PROCEEDS OF E XPORTS IN CONVERTIBLE FOREIGN EXCHANGE WERE NOT BROUGHT TO INDIA WITHIN SIX MONTHS FROM THE END OF THE PREVIOUS YEAR OR ANY FURTHER TIME GRANTED BY COMPETENT AUTHORITY IN TERMS OF SECTION 10B OF THE ACT . HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN REJECTING THE ABOVE I.T.A. NO . 199 /COCH/201 8 6 GROUND TAKEN BY THE ASSESSEE AND THE SAME IS CONFIRMED. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 9. THE NEXT GROUND IS WITH REGARD TO EX CLUSION OF EXPORTS MADE THROUGH SISTER CONCERN FROM EXPORT TURN OVER . 10. THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER EXCLUDED THE EXPORTS MADE THROUGH THE THIRD PARTIES AMOUNTING TO RS. 1,61,62,499 / - FROM THE EXPORT TURNOVER FOR THE PURPOSE OF COMPUTATION OF DEDUCTION UNDER SECTION 10B OF THE ACT. T HE LEARNED A.R. OF THE ASSESSEE IN THE WRITTEN SUBMISSIONS RELIED ON THE DECISION OF CIT ( A), KOTTAYAM IN THE CASE OF EXTRAWEAVE P LTD VIDE ORDER DATED 21.07.2016, WHEREIN THE LEARNED CIT(A) HELD THAT THE EXPORTS MADE THROUGH THE THIRD PARTIES ALSO QUALIFY FOR EXPORT TURNOVER UNDER SECTION 10B OF THE ACT. 11. ON APPEAL, THE CIT(A) OBSERVED THAT THE DECISION OF HIGH COURT OF KERALA IN THE CASE OF TATA TEA LTD . ( 234 CTR 90 ) WAS NOT RENDERED ON THE ISSUE OF EXPORTS THROUGH THE THIRD PARTIES. HOWEVER, HIGH CO URT OF KERALA CONSIDERED A SIMILAR ISSUE IN THE CASE OF ELECTRONIC CONTROLS &. DISCHARGE SYSTEMS (P) LTD . ( 245 CTR 0465 ). 11 . 1 THE CIT(A) ALSO OBSERVED THAT IN THE ABOVE DECISION, THE JURISDICTIONAL HIGH COURT, AFTER CONSIDERING THE PROVISIONS OF OTHER ACTS WITH REGARD TO SPECIAL ECONOMIC ZONES, HA D HELD THAT INTER - UNIT SALES IN THE EXPORT PROCESSING ZONE WERE NOT TREATED I.T.A. NO . 199 /COCH/201 8 7 AS EXPORT WITHIN THE MEANING OF SECTION 10A OF THE ACT, NO MATTER SUCH TRANSFERS ARE TREATED AS EXPORTS FOR THE PURPOSE OF CUSTOMS AN D EXCISE DUTY EXEMPTION. THEREFORE, THE CIT(A) HELD THAT THE ACTION OF THE ASSESSING OFFICER, IN EXCLUDING THE L OCAL SALES FROM THE EXPORT SALES, WAS IN ACCORDANCE WITH L AW AND H ENCE, DISMISSED THE GROUND RAISED BY THE ASSESSEE . 12. AGAINST THIS, TH E ASSESSEE IS IN APPEAL BEFORE US. 13. THE LD. DR ON THE RELIED ON THE ORDER OF THE CIT(A). 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD . ADMITTEDLY, THERE IS A SUPREME COURT JUDGMENT IN THE CASE OF DY. CIT VS. METAL CLOSURES (P ) LTD. 261 TAXMAN 161 WHEREIN BY DISMISSING THE SLP, THE SUPREME COURT HELD AS FOLLOWS: APPEAL (SUPREME COURT ) - SPECIAL LEAVE PETITION DEDUCTION UNDER SECTION 10B 100 PER CENT EXPORT ORIENTED UNDERTAKING ALTOWABILITY [ DEEMED EXPORT ] OF GOODS - WHERE THE DE PARTMENT/PREFERRED SLP TO APPEAL AGAINST THE JUDGMENT OF KA RNATAKA HIGH COURT IN M ETAL CLOSURES (P) LTD. V. DY. C1T [ I TA NOS. 24 - 25/2015 C/W ITA NOS. 22 - 23/2015, ITA NOS. 379 - 381/2016 DT. 12 - 6 - 2018 ] : 2019 TAXPUB(DT) 297 (KARN - HC) WHEREBY THE HIGH COURT HEL D THAT IN THE CASE OF M/S. TATA ELXSI LTD. V. ASSTT. CIT 2015 TAXP U B(DT) 5191 (KARN - H C) IT WAS HELD THAT ASSESSES WAS ENTITLED TO DEDUCTION UNDER SECTION 10B OF THE ACT IN RESPECT OF THE [ DEEMED EXPORT] ALSO AND SIMILARLY FOLLOWING THE SAID JUDGMENT, THE I SSUE WAS ALSO DECIDED IN FAVOUR OF THE ASSESSEE IN CASE OF PR. CIT V. INTERNATIONAL STONES INDIA (P) LTD. [ITA NO. 564/2016, DT. 12 - 6 - 2018 ] : 2018 TAXPUB(DT) 4058 (KARN - HC)], THAT THE PRESENT ASSESSEE, WHO WAS ALSO SIMILARLY SITUATED, SINCE THE FACT OF [ DE EMED EXPO R T ] MADE BY IT THROUGH A THIRD PARTY WAS NOT IN DISPUTE, ALSO DESERVES TO GET THE SAME RELIEF AND THEREFORE, I.T.A. NO . 199 /COCH/201 8 8 THE PRESENT APPEAL FILED BY ASSESSEE DESERVES TO BE ALLOWED, THE SUPREME COURT CONDONED DELAY AND DISMISSED THE SLP. DEPARTMENT PREFERRE D SLP TO APPEAL AGAINST THE JUDGMENT OF KA RNA TAKA HIGH COURT IN METAL CLOSURES (P) LTD. V. DY. CIT [ITA NOS. 24 - 25/2015 A /W ITA NOS. 22 - 23/2015, ITA NOS. 379 - 381/2016, DT. 12 - 6 - 2018 ] : 2019 TAXP U B(DT) 297 (KARN - HC) ] WHEREBY THE HIGH COURT HELD THAT IN THE CASE OF M/S. TATA ELXS I LTD V. ASSTT. CIT 2015 TAXPUB(DT) 5191 (KARN - H C) IT WAS HELD THAT ASSESSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 10B OF THE ACT IN RESPECT OF THE [DEEMED EXPORT ] ALSO AND SIMILARLY FOLLOWING THE SAID JUDGMENT, THE ISSUE WAS ALSO D ECIDED IN FAVOUR OF THE ASSESSEE IN CASE OF PR. CIT V. INTERNATIONAL STONES INDIA (P) L T D. [ITA NO. 564/2016, DT. 12 - 6 - 2018} : 2018 TAXPUB(DT) 4058 (KARN - HC), THAT THE PRESENT ASSESSEE, WHO WAS ALSO SIMILARLY SITUATED, SINCE THE FACT OF [DEEMED EXPORT ] MAD E BY IT THROU GH A THIRD PARTY WAS NOT IN DIS PUTE, ALSO DESERVES TO GET THE SAME RELIEF AND THEREFORE, THE PRESENT APPEAL FILED BY ASSESSEE DESERVES TO B E A LLO WED. HELD: THE SUPREME COURT CONDONED DELAY AND DISMISSED THE SLP. 14.1 FURTHER, THE QUESTI ON W HETHER DISMISSAL OF SLP AMOUNTS TO LAYING DOWN LAW IN RESPECT OF THE ISSUE DISPUTED UNDER SLP, HAS BEEN CONSIDERED BY THE ITAT IN THE CASE OF MORADABAD DEVELOPMENT AUTHORITY, 89 TAXMANN.COM 263 AND IT WAS HELD AS UNDER: '4. ...... FURTHER, IT IS A S ETTLED LEGAL POSITION THAT A SUMMARY DISMISSAL OF SLP CANNOT BE CONSTRUED AS A DECLARATION OF LAW BY THE HON'BLE SUPREME COURT UNDER ARTICLE 141 OF THE CONSTITUTION. A MERE DISMISSAL OF SLP WITHOUT GIVING ANY REASONS, CANNOT BE EQUATED WITH EXPOSITION OF L AW BY THE HON'BLE SUPREME COURT SO AS TO INDICATE THE IMPRIMATUR ON THE REASONING AND/OR THE RATIO DECIDENDI OF THE HIGH COURT IN THE JUDGMENT. IN SUCH CIRCUMSTANCES, THERE IS NO MERGER OF THE JUDGMENT OF THE HON'BLE HIGH COURT. THE HON'BLE APEX COURT IN H EMALATHA GARGYA V. CIT (2003) 259 ITR 1/128 TAXMAN 190, HAS HELD THAT DISMISSAL OF SLP IN LIMINE: 'COULD NOT OPERATE AS A CONFIRMATION OF THE REASONING IN THE DECISION SOUGHT TO BE APPEALED AGAINST........'. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE SUPR EME COURT IN KUNHAYAMMED V. STATE OF KERALA (2000) 245 ITR 360/113 TAXMAN 470, IN WHICH THEIR LORDSHIPS HAVE HELD THAT AN ORDER REFUSING SPECIAL LEAVE TO APPEAL DOES NOT STAND SUBSTITUTED IN PLACE OF ORDER UNDER CHALLENGE. IN THE HUE OF THE ABOVE DISCUSSIO N, IT IS AMPLY VIVID THAT THE MERE DISMISSAL OF SLP BY THE HON'BLE I.T.A. NO . 199 /COCH/201 8 9 SUPREME COURT AGAINST THE JUDGMENT OF THE HON J&K HIGH COURT IN THE CASE OF JAMMU DEVELOPMENT AUTHORITY CANNOT BE CONSTRUED AS HAVING THE EFFECT OF ELOCUTION OF LAW BY THE HON'BLE SUPREME C OURT ON THE SUBJECT AGAINST THE ASSESSEE.' 14.2 AS RIGHTLY POINTED OUT BY THE LD. DR, DISMISSAL OF SLP BY THE SUPREME COURT CANNOT LAY DOWN A N Y RATIO DECIDENDI OR PRECEDENT VALUE SO AS TO BE FOLLOWED BY THE TRIBUNAL. AS SUCH, WE ARE INCLINED TO DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE BY FOLLOWING THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF ELECTRONIC CONTROLS &. DISCHARGE SYSTEMS (P) LTD . ( 245 CTR 0465 ) WHEREIN IT WAS HELD AS UNDER: '6. AFTER HEARING BOTH SIDES AND AFTER GOING THR OUGH THE ABOVE REFERRED PROVISIONS OF THE INCOME - TAX ACT AND THE PROVISIONS OF THE SPECIAL ECONOMIC ZONES ACT, 2005, WE ARE UNABLE TO UPHOLD THE ORDER OF THE TRIBUNAL BECAUSE THE CONCEPT OF DEEMED EXPORT UNDER THE SPECIAL ECONOMIC ZONES ACT IS NOT INCORPOR ATED IN THE SCHEME OF EXEMPTION UNDER SECTION 10A OF THE INCOME - TAX ACT AND IT IS THE SETTLED POSITION THAT THE INCOME - TAX ACT IS A SELF - CONTAINED CODE AND THE VALIDITY OR CORRECTNESS OF THE ASSESSMENT HAS TO BE CONSIDERED WITH REFERENCE TO STATUTORY PROVI SIONS. IT IS NOT AS IF THE SPECIAL ECONOMIC ZONES ACT, 2005 OR THE FOREIGN EXCHANGE REGULATION ACT OR THE FOREIGN EXCHANGE MANAGEMENT ACT ARE NOT REFERRED TO IN THE INCOME - TAX ACT. THE INCOME - TAX ACT REFERS TO SEVERAL STATUTES IN DIFFERENT PLACES AND WHERE VER REQUIRED, PROVISIONS OF SUCH STATUTES ARE INCORPORATED IN THE ACT THROUGH REFERENCE OR BY INCORPORATION. IT IS NOT AS IF THE PARLIAMENT IS UNAWARE OF OTHER STATUTES WHICH HAVE SPECIFIC PURPOSES. INTER - UNIT TRANSFERS IN ECONOMIC ZONES ARE TREATED AS EXP ORTS FOR THE PURPOSE OF CUSTOMS ACT AND THE CENTRAL EXCISE ACT. HOWEVER, WHEN SECTION 10A, PROVIDES FOR EXEMPTION ONLY ON PROFITS DERIVED ON EXPORT PROCEEDS RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE, THE LEGISLATURE NEVER INTENDED THE BENEFIT TO BE EXTENDED TO LOCAL SALES MADE BY THE UNITS IN THE SPECIAL ECONOMIC ZONE, WHETHER AS 5 PART OF DOMESTIC TARIFF AREA SALES OR INTER - UNIT SALES WITHIN THE ZONE OR UNITS IN OTHER ZONES. IN FACT ALL SPECIAL ECONOMIC ZONES ARE ALLOWED TO MAKE 25 PER CENT SALES TO DOMESTI C TARIFF AREA AND THE PROFIT DERIVED FROM SUCH SALES ARE NOT ENTITLED TO EXEMPTION. EXEMPTION UNDER SECTION 10A(3) IS SPECIFICALLY GEARED TO PROFITS ON ACTUAL EXPORTS, THAT TOO, MADE AGAINST RECEIPT OF CONVERTIBLE FOREIGN I.T.A. NO . 199 /COCH/201 8 10 EXCHANGE. WE ARE OF THE VIEW THAT IF THE PROVISIONS OF THE SPECIAL ECONOMIC ZONES ACT, 2005, ARE BROUGHT INTO EXTEND THE EXEMPTION ON PROFITS DERIVED ON INTER - UNIT SALE MADE BY INDUSTRIES WITHIN THE EXPORT PROCESSING ZONE, THE COURT WILL BE RE - WRITING THE LEGISLATION WHICH IS EXACTLY WHAT THE TRIBUNAL HAS DONE. IN FACT, THE UNIT WHICH PURCHASED COMPONENTS FROM THE ASSESSEE MUST BE MANUFACTURING FINAL PRODUCTS AND BEING A UNIT IN THE SPECIAL ECONOMIC ZONE WILL BE EXPORTING THE FINAL PRODUCT, ON WHICH THAT UNIT WILL GET EXEMPTION ON THE ENTIR E PROFITS WHICH INCLUDE THE VALUE OF THE COMPONENTS SUPPLIED BY THE ASSESSEE. PROBABLY THE LEGISLATURE DID NOT WANT DUPLICITY IN EXEMPTION ON EXPORT PROFIT. THAT IS WHY INTER - UNIT SALES IN THE EXPORT PROCESSING ZONE ARE NOT TREATED AS EXPORT WITHIN THE MEA NING OF SECTION 10A OF THE INCOME - TAX ACT, NO MATTER SUCH TRANSFERS ARE TREATED AS EXPORTS FOR THE PURPOSE OF CUSTOMS AND EXCISE DUTY EXEMPTION. WHEN THE EXEMPTION IS ONLY ON ACTUAL PROFITS DERIVED ON EXPORTS MADE AGAINST RECEIPT IN CONVERTIBLE FOREIGN EXC HANGE, THE TRIBUNAL, IN OUR VIEW, HAS NO JUSTIFICATION TO EXTEND IT TO PROFITS RECEIVED ON LOCAL SALES WITHIN INDIA AGAINST PAYMENT RECEIVED IN INDIAN RUPEES. FOR THE ABOVE REASONS, WE ARE UNABLE TO SUSTAIN THE ORDERS OF THE TRIBUNAL AND WE, THEREFORE, ALL OW THE APPEALS BY REVERSING THE ORDERS OF THE TRIBUNAL AND BY RESTORING THE ORDERS CANCELLED BY THE TRIBUNAL.' [EMPHASIS SUPPLIED] THUS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND THE SAME IS CONFIRMED. 15 . IN THE RESULT, THE APPEAL F ILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH JUNE , 2019 SD/ - SD/ - (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 19 TH JUNE, 2019 I.T.A. NO . 199 /COCH/201 8 11 GJ COPY TO: 1 . M/S. TRAVANCORE COCOTUFT PVT. LTD., 229/CMC, VELO RVATTOM, CHERTHALA, ALLEPPEY - 688 524. 2. THE ASSISTANT COMMISSIONER OF INCOME - TAX, CIRCLE - 1, ALAPPUZHA. 3 . THE COMMISSIONER OF INCOME - TAX (AP P EALS) , KOTTAYAM. 4. THE PR. COMMISSIONER OF INCOME - TAX, KOTTAYAM. 5 . D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6 . G UARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN