ACIT, UDAIPUR V. M/s. Galaxy Exports, UDAIPUR

ITA 233/JODH/2014

• Counselvise Citation: 23323314 RSA 2014
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SINGH
• Assessee Lawyers: G K GARGIEYA
• Keywords: Business income; Competent authority
• Section: 80HHC; 194C; 10B; 154

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL , JODHPUR BENCH: J ODHPUR ( BEFORE SHRI H ARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ) I.T.A. NO. 177 /JODH/201 4 (A.Y. 2009 - 10 ) GALAXY EXPORT VS ADDL. CIT, ROOM NO. 1, OLD FATEHPURA, RA NGE - 2, UDAIPUR. UDAIPUR. PAN NO. AAADFG0705B I.T.A. NO. 233/JODH/2014 (A.Y. 2009 - 10) ACIT, CIRCLE - 2, VS M/S. GALAXY EXPORTS, UDAIPUR. ROOM NO. 1, PURANA FATEHPURA, UDAIPUR. PAN NO. AAADFG0705B (APPELLANT) (RESPONDENT) ASSESSEE BY : - SHRI G.K. GARGIEYA. DEPARTMENT BY : - SHRI JAI SINGH - D.R. DATE OF HEARING : 22 /0 9 /201 4 DATE OF PRONOUNCEMENT : 30 / 09 /2014 O R D E R P E R HARI OM MARATHA, J.M. : THESE ARE CROSS APPEALS FILED AGAI NST THE ORDER OF LD. CIT(A), UDAIPUR, DATED 30.04.2014. 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND CARRIES ON BUSINESS OF MARBLE TRADING AND EXPORT THEREOF. FOR A.Y. 2009 - 10, THE ASSESSEE - FIRM FILED ITS RETURN OF INCOME (ROI) DECLARING TO TAL INCOME OF RS. 2,03,94,7 2 1/ - . AS AGAINST THE ABOVE THE INCOME OF THE YEAR HAS BEEN ASSESSED AT RS. 3,10,01,299/ - , AS UNDER: - INCOME AS PER COMPUTATION FILED WITH THE RETURN OF INCOME 20394720 ADD: OCEAN FREIGHT AND O THER CHARGES IN TRADING DIVISION DISALLOWED AS PER PARA 3 250409 OCEAN FREIGHT AND OTHER CHARGES IN EOU DIVISION DISALLOWED AS PER PARA 3 645048 EXEMPTION U/S 10B DISALLOWED AS PER PARA 4 9711122 10606579 TELEPHONE NET TAXABLE INCOME 31001299 2.1 AGGRIEVED, THE ASSESSEE - FIRM FILED ITS APPEAL AND LD. CIT(A) HAS GIVEN A PART RELIEF. THAT IS WHY BOTH THE PARTIES ARE NOW AGGRIEVED. THE REVENUE HAS FILED ITS APPEAL BY RAISING THE FOLLOWING GROUNDS : - 1. DELETING THE DISALLOWANCE OF R S. 8,95,457 / - [SIC] (RS. 2,42,150+6,45,048) MADE U/S 40(A)(IA) OF THE I.T. ACT IGNORING THE FACT THAT THE ASSESSEE HAS FAILED TO DEDUCT TAX ON PAYMENT MADE AS PER PROVISIONS OF SECTION 194C OF THE I.T. ACT. 3 2. DELETING THE ADDITION OF RS. 71,705/ - ON ACCOUNT OF APPORTIONMENT OF COMMON EXPENSES. 3. DIRECTING THE AO TO INCLUDE AMOUNT OF RS. 21,00,813/ - IN THE EXPORT TURNOVER FOR THE PURPOSE OF SECTION 10B OF THE I.T. ACT DESPITE THE FACT THAT AMOUNT WAS NOT RECEIVED EVEN IN THE PERIOD EXTENDED BY THE RBI. THE AS SESSEE HAS FILED ITS APPEAL BY RAISING THE FOLLOWING GROUNDS : - THAT ON THE FACT AND ON THE CIRCUMSTANCES OF THE CASE AS WELL AS IN THE LAW, THE ID. A.O. WHILE COMPLETING THE ASSESSMENT OF INCOME ORDER DT.26.11.2011 RESTRICTED THE CLAIM OF DEDUCTION UNDE R SECTION 10B OF THE INCOME TAX ACT, AT RS.2,25,40,038/ - AGAINST THE CLAIM MADE RS.3,22,51,160/ - RESULTED DISALLOWANCES OF CLAIM RS.97,11,122/ - ON THE ALLEGE GROUND THAT A SUM OF RS.2,14,42,571/ - I. .E SALES CONSIDERATION NOT REALIZED / RECEIVED IN CONVERT IBLE FOREIGN E XCHANGE AS PER THE PROVISION OF LAW AND FURTHER HEL D THAT SUM OF RS.2,10,083/ - CONVERTIBLE FOREIGN EXCHANGE RECEIVED BEYOND TIME, CIT(A) WHILE DISP OSING OF APPEAL AS PER IMPUGNED ORDER CONFIRM DISALLOWANCES OF RS.2,14,42,571/ - WITHOUT APPREC IATING THE FULL FACT OF THE CASE WRITTEN SUBMISSION WHICH IS BAD IN LAW AND UNJUSTIFIED. IT IS RESPECTFULLY SUBMITTED THAT HAVING REGARD TO THE FACT OF THE CASE PREVAILING CIRCUMSTANCES IMPOSITION OF THE LAW THE ASSESSEE IS ENTITLED TO BE TAKEN IN T O CON SIDERATION FOR THE PURPOSE OF DETERMINING OF DEDUCTION U/S 10(B) OF THE INCOME TAX ACT, ON SUM OF RS. 2,14,42,571/ - HENCE DIRECTION BE GIVEN TO THE ASSESSING AUTHORITY. 4 2.2 WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE RECORD. 2.3 THE FACTS OF GROUND NO. (1) OF REVENUES APPEAL RELATING TO DELETION OF AN ADDITION OF RS. 8,95,457/ - ADDED U/S 40(A)(IA) ARE THAT THE ASSESSEE HAS MARBLE MINE, AND ALSO DEALS IN PURCHASE AND SALE OF MARBLE SLABS IN ITS TWO UNITS KNOWN AS GALAXY EXPORT S (TRADING DIVISION) AND GALAXY EXPORTS (EOU) SHORTLY EOU DIVISION. IN THE TRADING UNIT ON GROSS SALES OF RS. 5. 14 CRORE S GROSS PROFIT RATE OF 61.37% HAS BEEN DISCLOSED IN THIS YEAR. THE GROSS PROFIT HAS BEEN SHOWN AT RS. 3.15 CRORE S . IN THE IMMEDIATELY PAST ASSESSMENT YEAR THIS GROSS PROFIT RATE ON TOTAL TURNOVER OF RS. 4. 32 CRORES WAS DECLARED AT 58.64%. IN THE EXPORT DIVISION ON TOTAL TURNOVER OF RS. 9.72 CRORE S G.P. RATE OF 57.65% HAS BEEN DECLARED IN THIS YEAR. WHEREAS IN THE IMMEDIATELY PAST ASSESS MENT YEAR THIS RATE WAS 56.57% ON TOTAL TURNOVER OF RS. 14.14 CRORES. THE ASSESSEE MAINTAINS QUANTITATIVE TALLY AND HAS SHOWN INCREASED G.P. AS WELL AS N.P. RATE. FROM THE PERUSAL OF P&L ACCOUNT IT WAS NOTICED THAT THE ASSESSEE HAS PAID SUBSTANTIAL AMOUNTS TO ITS CLEARING AND FORWARDING AGENTS WHICH ARE MAINLY NON - RESIDENT SHIPPING COMPANIES. THE ASSESSEE HAS DEDUCTED TDS ON PAYMENTS WHICH WERE BILLED BY M/S. AASHITA INTERNATIONAL OR SOME OTHER AGENCIES. ON THE 5 PART OF PAYMENTS WHICH WERE NOTED IN THE BILLS RAISED BY M/S. AASHITA INTERNATIONAL / SHIPP I NG AGENTS, THE ASSESSEE H A S NOT DEDUCTED TDS AS PER THE PROVISIONS OF SECTION 194C. ACCORDINGLY, BY TREATING THESE PAYMENTS IN THE NATURE OF CONTRACTUAL PAYMENTS, THE A.O. HAS ADDED A SUM OF RS. 645048/ - IN THE ACCOUNT OF EOU DIVISION AND A SUM OF RS. 250409/ - IN THE ACCOUNT OF TRADING DIVISION ON ACCOUNT OF NON DEDUCTION OF TDS AS PER THE PROVISIONS OF SECTION 194C OF THE ACT. 2.4 THE LD. CIT(A) HAS DELETED BOTH THE ADDITIONS VIDE ORDER DATED 30.04.2014, UNDE R CHALLENGE, BY FOLLOWING JUDGMENT OF JODHPUR BENCH RENDERED IN ASSESSEES OWN CASE FOR A.Y. 2005 - 06 TO 2008 - 09 ORDER DATED 16.05.2013. COP Y OF THIS ORDER OF THE APPELLATE TRIBUNAL IS PLACED AT PAPER BOOK PAGE 13 TO 14 (RELEVANT PORTION). DURING HEARING BE FORE US THE LD. A.R. HAS FURTHER RELIED ON THE DECISION OF THIS VERY BENCH IN THE CASE OF MINPRO REPORTED IN 143 TTJ 331, INTER ALIA. WE DONT FIND MUCH FORCE IN THE ARGUMENTS OF LD. D.R. WHO HAS RELIED ON THE ORDER OF LD. A.O. THE ISSUE INVOLVED IN THIS G ROUND DIRECTLY STANDS COVERED IN THE FAVOUR OF THE ASSESSEE, AS HAS BEEN DISCUSSED ABOVE. THE FACTS IN THIS YEAR ARE EXACTLY SAME AND SIMILAR TO THE FACTS OBTAINING OTHER ASSESSMENT YEARS IN ITA NO. 350 AND 351/JODH/2009, 399/JODH/2010 AND 260/JODH/2012. I N FACT THE PAYEE WAS WORKING AS CLEARING AND FORWARDING AGENT OF THE ASSESSEE - FIRM FOR THE LAST SEVERAL 6 YEARS AND IS REGULA RLY ASSESSED TO TAX. THE PAYEE H A S DEDUCTED AND DEPOSITED TDS. THE BILLS FOR REIMBURSEMENT WOULD NOT ATTRACT PROVISIONS OF SECTION 19 4. ACCORDINGLY, THE DISALLOWANCE U/S 40(A)(IA) ON OCEAN FREIGHT AND OTHER CHARGES OF RS. 2,42,150/ - IN THE TRADING DIVISION AND RS. 6,45,048/ - IN THE EOU DIVISION HAVE BEEN CORRECT LY DELETED BY LD. CIT(A). AS A RESULT, WE DISMISS GROUND NO. (1) OF REVENUE S APPEAL. 3. THE FACTS OF GROUND NO. (2) PERTAINING TO DELETION OF THE ADDITION OF RS. 71,705/ - ON ACCOUNT OF APPORTIONMENT OF COMMON EXPENSES ARE THAT FROM THE PERUSAL OF ADMINISTRATIVE EXPENSES OF THE TRADING DIVISION AND EOU DIVISION IT WAS SEEN THAT IN THE TRADING DIVISION COMMON FACILITY EXPENSES AT THE MANUFACTURING SITE HAS BEEN DEBITED AT RS. 1,01,124/ - AND CONVEYANCE EXPENSES AT RS. 8500/ - SUCH EXPENSES ARE NOT REFLECTED IN THE EOU DIVISIO N. THE A.O HAS ALLOCATED COMMON FACILITY EXPENSE AND CON VEYANCE EXPENSES AMOUNTING TO RS. 71705/ - [109624 (101124 + 8500)] IN THE RATIO OF TURNOVER HAS ADDED THE SAME. THE LD. CIT(A) HAS DELETED THIS ADDITION (PAGES 11 AND 12). 3.1 BOTH THE PARTIES HAVE REITERATED THEIR EARLIER ARGUMENTS, EVEN BEFORE US. AFT ER CONSIDERING THEM WE HAVE FOUND THAT THESE ENTIRE EXPENSES RELATE TO THE TRADING DIVISION ALONE WHICH WERE SHARED 7 BETWEEN M/S. MUMAL MARBLES PVT. LTD. AND THE TRADING DIVISION ONLY. ACCORDINGLY, WE UPHOLD THE ACTION OF LD. CIT(A) AND DISMISS GROUND NO. ( 2) OF THE REVENUES APPEAL. 4. THE FACTS OF GROUND NO. (3) OF REVENUES APPEAL AND GROUND NO. (1) OF ASSESSEES APPEAL ARE COMMON AND INTERCONNECTED AND ARE THAT THE ASSESSEE HAS CLAIMED EXEMPTION U/S 10B OF THE ACT OF RS. 3,22,51,160/ - WHICH HAS BEEN R ESTRICTED TO RS. 2,25,40,083/ - AND HAS EXCLUDED A SUM OF RS. 2,14,42,571/ - FROM THE KITTY OF EXPORT TURNOVER WHICH HAS RESULTED INTO AN ADDITION OF RS. 97,11,122/ - . THE LD. A.O. HAS RECALCULATE D THE CLAIM OF DEDUCTION U/S 10B IN RESPECT OF EXPORT UNDER TAK ING (EOU) AT RS.2,25,40,038/ - INSTEAD OF CLAIM MADE U/S 10B RS.3,22,51,160/ - RESULTED AND ADDITION OF RS.97,11,122/ - TO THE TOTAL INCOME . T HE DETAIL WORKING THEREOF HAS BEEN WORK ED OUT BY THE A . O. [ AT PAGE NO. 11 AND 12 [ AS FOLLOWS : TOTAL EXPORT PROFIT OF EOU AS SHOWN BY THE ASSESSEE 3,22,51,160 ADD : - TELEPHONE EXPENSES 1,01,452 LESS : INTEREST ON FDR AS DISCUSSED ABOVE 9,54,040 APPORTIONED EXPENSES AS DISCUSSED ABOVE ** 71,705 - 10,25,745 3,13,26,867 8 THE A.O HAS FURTHER OBSERVED THAT : IN VIEW OF ABOVE, THE EXEMPTED EXPORT INCOME WILL BE : - TOTAL PROFIT OF EOU RS. 3,13,26,867 X EXPORT TURN OVER RS.6,03,93,667/ - / TOTAL TURNOVER OF EOU RS.8,39,37,051/ - = RS.2,25,40,038/ - . THUS, ASSESSEE WILL BE ELIGIBLE FOR DEDUCTION U/S 10B AT RS.22,54,0038/ - IN RESPECT OF EXEMPTION CLAIMED AT RS.3,22,51,1 60/ - AND THE DIFFERENCE OF RS.97,84,117/ - WILL BE ADDED TO THE INCOME OF THE ASSESSEE. IN RESPECT OF RS.9,54,040/ - NO APPEAL FILED BY THE APPELLANT. APPORTIONED EXPENSES AS DISCUSSED ABOVE RS.71,705/ - ALLOWED BY THE CIT(A) DEPARTMENT IN SECOND APPEAL BEA RING NO. 233/JODH/2014. RECEIPT BEYOND ONE YEAR FROM THE DATE OF EXPORT AS DISCUSSED ABOVE RS.21,00,813/ - ALLOWED BY CIT(A), REVENUE IN SECOND APPEAL BEARING NO. 233/JODH/2014 TAKEN GROUND NO. 3. CIT (A) AT PAGE NO 13 OF THE IMPUGNED ORDER BEARING NO. 410/ IT/UDR 2011 - 12 DT.30.04.2014 AT PAGE NO. 13 ONWARD DEAL WITH THE COMPUTATION OF EXEMPTION U/S 10B AT RS.2,25,40,038/ - AGAINST CLAIM MADE RS.3,22,51,160/ - BY THE LD. A. O. AND TOTAL EXPORT TURNOVER AS SHOWN BY THE AS SESSEE 8,39,37,051 LESS : RECEIPT THROUGH ECGC AS DISCUSSED ABOVE 21,44,2571 RECEIPT BEYOND ONE YEAR FROM THE DATE OF ***21,00,813 - 23543384 60393667 9 ULTIMATELY AT PAGE NO. 17 THE LD. CIT(A) DISMISSED THE GROUND OF APPEAL OF THE AP PELLANT IN FOLLOWING WORDS: - I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS WELL AS THE FINDINGS OF THE LD. A. O. KEEPING INTO CONSIDERATION THE VARIOUS CASE LAWS OF THE HIGHER APPELLATE AUTHORITIES AND THE HONBLE COURTS, I AM THE OPINION THAT THE LD. A. O. IS JUSTIFIED IN RESTRICTING THE EXEMPTION CLAIMED U/S 10B AT RS.2,25,40,083/ - IN PLACE OF EXEMPTION CLAIMED AT RS.3,22,51,160/ - BECAUSE THE CLAIMS SETTLED IN INDIA CURRENCY BY ECGC AND PRIVATE INSURANCE COMPANIES REGULATED BY IRDA CANNOT BE CONSTRUED AS EXPORT REALIZATION IN FOREIGN CURRENCY ACCORD ING TO THE MASTER CIRCULAR NO. 10/2010 - 11 DATED 01.07.2011 ISSUED BY RBI. THE JUDICIAL PRONOUNCEMENT RELIED ON BY THE LD. A. R. ARE RELATED TO THE PROVISIONS OF SECTION 80HHC OF THE ACT, I.E. THE FA CTS AND CIRCUMSTANCES OF THE APPELLANTS CASE ARE DIFFERENT FROM THAT OF THE CASES RELIED ON BY THE LD. A. R. THEREFORE, I CONFIRM THE ACTION OF THE LD. A. O. WHILE EXAMINING THE FOB VALUE FOR THE PURPOSE OF COMPUTING EXEMPTION US/ 10B IT WAS NOTICED BY T HE A.O THAT THE ASSESSEE HA D RECEIVED VARIOUS PAYMENTS BEYOND THE EXT EN D ED PERIOD. TO EXPLAIN THIS POSITION THE ASSESSEE REPLIED VIDE LETTER DATED 05.12.2011 STATING THAT PART OF THE PAYMENTS FROM IMPORTER MR. AHMED KHALIL AL RAHMAN HAYAT TRADING ESTABLISH MENT WERE RECEIVED IN THE INDIAN RUPEE (INR) THOUGH 10 THE INSURANCE COMPANY CCGC AS THE IMPORTER FAILED TO MAKE THE PAYMENTS. IT WAS ALSO NOTICED THAT SOME OF THE PAYMENTS WERE RECEIVED BEYOND THE EXTENDED TIME. THEREFORE, PAYMENT OF RS. 21,00,813/ - RECEIVED THROUGH THE ECGC AGAINST FOB BEYOND THE SPECIFIED TIME. THE CONTENTION OF THE ASSESSEE THAT THIS PAYMENT OF RS. 21,00,813/ - WAS RECEIVED DURING THE EXTENDED PERIOD AND THE RECEIPT THOUGH CGGC IS TO BE TREATED AS A RECEIPT IN CONVERTIBLE FOREIGN EXCHANGE. AS PER THE AO EITHER THE RECEIPT WITHIN SIX MONTHS FROM THE END OF THE RELEVANT F.Y. OR WITHIN ONE YEAR FROM THE DATE OF EXPORT, WHICHEVER IS LATER WOULD BE EXCLUDED FROM THE EXPORT TURNOVER OF THE ELIGIBLE UNIT AND THUS HE HAS MADE THE IMPUGNED ADDITION. 4.2 THE LD. CIT(A) HAS DELETED THIS ADDITION. BEFORE US BOTH THE PARTIES HAVE REITERATED THEIR EARLIER STAND. ACCORDING TO LD. D .R. THIS RECEIPT HAS TO BE EXCLUDED FROM THE EXPORT TURNOVER FOR THE PURPOSE OF SECTION 10B OF THE ACT. HE HAS REPEATED ALL TH E REASONS GIVEN BY THE A.O. FOR MAKING THIS ADDITION. ON THE OTHER HAND LD. A.R. HAS RELIED ON THE ORDER OF LD. CIT(A). 11 4.3 AFTER CIRCUMSPECTING THE ENTIRE RECORD IN THE LIGHT OF THE OBTAINING FACTS OF THIS ISSUE, WE WOULD GO ALONG WITH THE FINDING GIV EN BY LD. CIT(A). FOR THE READY REFERENCE, WE EXTRACT PARA 3.3 AT PAGE 16 AND 17 OF CIT(A)S ORDER, S UNDER : - 3.3 THE ID. ASSESSING OFFICER HAS NOT TREATED EXPORT OF RS. 21,00,813/ - WHILE COMPUTING THE EXPORT TURN - OVER FOR THE REASON THAT THE PERMISSIO N FROM RESERVE BANK OF INDIA WAS RECEIVED BELATED. IT IS AN ADMITTED FACT THAT GOODS HAVE BEEN EXPORTED AND CONVERTIBLE FOREIGN EXCHANGE HAS BEEN RECEIVED. THUS, THE BASIC OBJECTIVE OF THE SAID PROVISION STAND FULLY FULFILLED. THE ASSESSEE HAS DONE ITS DUT Y BY MAKING APPLICATION FOR EXTENSION AND EXTENSION HAS NOT BEEN REJECTED. IN SUCH CIRCUMSTANCES, IT SHOULD BE DEEMED AS AN APPROVAL BY RBI. WE RELY UPON CIT V. MORGAN STANLEY ADVANTAGE SERVICES P. LTD. (BOMBAY) (2011) 339 ITR 291 WHEREIN APPLICATIONS TO R BI FOR EXTENSION OF TIME WERE MADE BUT NO REPLY WAS RECEIVED. THE HUMBLE COURT TREATED IT AS DEEMED APPROVAL FOR SECTION 10A(3) OF THE ACT. SHOULD YOU REQUIRE ANY FURTHER INFORMATION/PARTICULARS, WE SHALL BE GLAD TO SUBMIT THE SAME. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS WELL AS THE FINDINGS OF THE LD. AO. KEEPING INTO CONSIDERATION THE VARIOUS CASE LAWS OF THE HIGHER APPELLATE AUTHORITIES AND THE HONBLE COURTS, I AM OF THE OPINION THAT THE LD.AO IS JUSTIFIED IN RESTRICTING THE EXEMPTION C LAIMED U/S 10B AT RS.2,25,40,083/ - IN 12 PLACE OF EXEMPTION CLAIMED AT RS.3,22,51,160/ - BECAUSE THE CLAIMS SETTLED IN INDIAN CURRENCY BY ECGC AND PRIVATE INSURANCE COMPANIES REGULATED BY IRDA CANNOT BE CONSTRUED AS EXPORT REALIZATION IN FOREIGN CURRENCY ACCOR DING TO THE MASTER CIRCULAR NO. 10/2010 - 11 DATED 01.07.2011 ISSUED BY RBI . THE JUDICIAL PRONOUNCEMENT RELIED ON BY THE LD. AR ARE RELATED TO THE PROVISIONS OF SECTION 80HHC OF THE ACT I.E. THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE ARE DIFFERENT FROM THAT OF THE CASES RELI ED ON BY THE LD. AR . THEREFORE , I C ONFIRM THE ACTION OF THE LD. AO . FURTHER, I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS WELL AS THE FINDINGS OF THE LD. AO IN RESPECT OF THE REDUCTION OF DELAYED PAYMENTS OF RS.21,00,81 3/ - . KEEPING INTO CONSIDERATION THE VARIOUS CASE LAWS OF THE HIGHER APPELLATE AUTHORITIES AND THE HONBLE COURTS, I INCLINE TO AGREE WITH THE CONTENTION OF THE APPELLANT THAT IT IS AN ADMITTED FACT THAT GOODS HAVE BEEN EXPORTED AND CONVERTIBLE FOREIGN EXC HANGE HAS BEEN RECEIVED. THUS, THE BASIC OBJECTIVE OF THE SAID PROVISION STAND FULLY FULFILLED. THE ASSESSEE HAS DONE ITS DUTY BY MAKING APPLICATION FOR EXTENSION AND EXTENSION HAS NOT BEEN REJECTED. IN SUCH CIRCUMSTANCES, IT SHOULD BE DEEMED AS AN APPROVA L BY THE RBI. THE RELIANCE IS PLACED UPON THE CASE OF CIT V. MORGAN STANLEY ADVANTAGE SERVICES P. LTD. (BOMBAY) (2011) 339 ITR 291 WHEREIN APPLICATIONS TO RBI FOR EXTENSION OF TIME WERE MADE BUT NO REPLY WAS RECEIVED. THE HONBLE COURT TREATED IT AS DEEMED APPROVAL FOR SECTION 10A(3) OF THE ACT. ACCORDINGLY , THE LD. AO IS DIRECTED TO CONSIDER THE DELAYED PAYMENTS OF RS.21,00,813/ - 13 FOR COMPUTING THE EXPORT TURNOVER FOR THE PURPOSES OF SECTION 10B . ACCORDINGLY, THIS IS PARTLY ALLOWED. 4.2 WE HAVE FOUND THA T T HE ASSESSEE HAD APPLIED FOR THE EXTENSION OF TIME UPTO 30.01.2011 AS PER RULES BUT THE CONCERNED AUTHORITY SLEPT OVER IT AND DID NOT CONVEY I T S DECISION IN RESPECT THERETO. THEREFORE, IT WOULD BE GENERALLY DEEMED THAT THE REQUEST HAS BEEN GRANTED. THUS, THIS IS A CASE OF DEEMED EXTENSION OF TIME . UNDENIABLY THE MONEY HAS BEEN RECEIVED BY THE ASSESSEE IN THE CONVERT IBLE FOREIGN EXCHANGE WHICH HAS NOT BEEN DOUBTED BY THE A.O. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE FINDING OF LD. CIT(A) . FURTHER, THE LD. A.R HAS RELIED ON AND WE ALSO DERIVE FORCE FROM THE DECISIONS OF BOMBAY HIGH COURT IN THE CASE OF KAMLESH R. SHAH VS CIT REPORTED IN 286 ITR 684, AND THAT OF ALLAHABAD HIGH COURT IN THE CASE OF AZAD TOBACCO 225 ITR 1002 AND THE DECISION OF THE BAN GALORE BENCH, COPY ENCLOSED AT PAPER BOOK PAGE 30 TO 32. 4.3 IN RELATION TO THE GROUND NO. 1 OF ASSESSEES APPEAL THE LD. A.R H A S SUBMITTED IN HIS WRITTEN SUBMISSIONS AS UNDER: - NOW THE PRESENT APPEAL BEFORE THE HONBLE BENCH AND IN BRIEF HAVING REGARD TO THE NATURE OF BUSINESS EXPORT OF GOODS, APPLICATION MADE TO RBI FOR THE EXTENSION OF TIME, HAVING REGARD 14 TO THE PROVISIONS OF SUB CLAUSE 11(A) OF SECTION 155 OF THE INCOME TAX ACT, INSERTED BY THE TAXATION LAWS (AMENDMENT) ACT 2006 W.E.F. 13.07.2006 AN D DECIDED CASE LAW WE SUBMIT AS FOLLOWS: A) CASE OF A PARTNERSHIP FIRM CAME INTO EXISTENCE AS PER PARTNERSHIP DEED EXECUTED ON 1/10/1993. LATER ON CONSTITUTION CHANGED ON 9/7/1999. B) FIRM HAVING TWO DIVISIONS; (I) TRADING DIVISION (II) EOU DIVISION. C) IN TRADING DIVISION USE TO EXPORT DRESSED, CUT & POLISHED MARBLE BLOCK AND IN EOU DIVISION USE TO EXPORT POLISHED MARBLE SLABS AND TILES. D) THE FIRM IS NOT HAVING ANY MINES. THE FIRM PURCHASES CUT AND POLISHED MARBLE BLOCK FROM MINE OWNERS WITH A DIRECTION TO SUPP LY FULLY DRESSED CUT AND POLISHED MARBLE BLOCK AND ACCORDINGLY GOODS WERE PURCHASED FROM M/S M.S. MARBLES. SOME OF THE BILLS WERE PRODUCED/FILED BEFORE THE A.O. WHEREIN IT WAS STATED THAT THE SAID FIRM SUPPLIED CUT AND POLISHED MARBLE BLOCK. E) FOR THE UNITS , SEPARATE SET OF BOOKS OF ACCOUNTS IS MAINTAINED, ACCOUNTS ARE AUDITED AND OBTAINED AUDIT REPORT FROM CHARTERED ACCOUNTANT IN PRESCRIBED FORM 56G AS PER RULE 16A CLAIM DEDUCTION U/S 10B IN RESPECT OF 100% EOU UNIT SUM OF RS.3,22,51,160/ - ON EXPORT TURNOVE R OF RS.8,39,37,051/ - (TOTAL TURNOVER ADOPTED ON THE BASIS OF FOB. 15 F) TO ONE OF THE PARTY NAMELY, AHMED KHALIL HAYAT TRADING EST JADDAH SAUDI ARBIA THROUGH 35 BILLS FROM 7 APRIL 2008 TO 25.05.2009 EXPORTED GOODS IN INDIAN RS.3,66,79,084/ - USA $ 80,70,40.41 CHART ENCLOSED. IN RESPECT OF BILL NO. 35, 45, 80 PART PAYMENT RECEIVED INDIA RS. 17,23,416/ - UDA $ 38,496.94 G) THAT LD A. O. IN IMPUGNED ORDER OF ASSESSMENT AT PAGE NO. 8 & 9 STATED THAT IN RESPECT OF 19 BILLS THE AGGREGATE FOB VALUE (BILL AMOUNT AS ON SHI PPING BILL PAYMENT WERE NO RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE, PAYMENT WERE RECEIVED THROUGH ECGC AND DISALLOW THIS FIGUR E WHILE COMPLETING THE PROFIT U/ S 10B OF THE I. T. ACT, H) SIR, IT IS EVIDENT FROM THE RECORD THAT IN RESPECT OF 19 BILL OF DIFFERE NT DATES REFERENCE OF WHICH HAS BEEN MADE TO THE PAGE NO. 8 OF THE IMPUGNED ORDER ASSESSMENT HAVING AGGREGATE FOB VALUE RS.2,14,42,571/ - THE APPELLANT FIRM MADE REQUEST/REMINDER TO THE DEPUTY GENERAL MANAGER, RBI, FOR THE EXTENSION OF TIME TO BROUGHT CONVE RTIBLE FOREIGN EXCHANGE AGAIN EXPORT OF GOODS, THE REQUEST SO MADE REMAIN UNATTENDED PRESUME TO BE GRANTED IN VIEW OF THE DECISION OF HONBLE MUMBAI HIGH COURT CIT V.S MORGAN STANLEY ADVANTAGES SERVICES PVT. LTD. 339 ITR 291 PAPER BOOK PAGE NO. 74. THAT HO NBLE SUPREME COURT DISMISS THE SPECIALLY PETITION. I) THAT FOR THE RECOVERY OF THE EXPORT GOODS VALUE APPELLANT TAKEN ONE INSURANCE POLICY WITH EXPORT CREDIT GUARANTEE INDIA LTD. JODHPUR DT. 03.06.2008 FOR RS.4.00 CRORE FOR THE PERIOD 03.06.2008 TO 02.06 .2009 FOR SINGLE BUYER M/S AHMAD KHALIL 16 HAYAT TRADING EST JADDAH SAUDI ARABIA, IN SPITE OF BEST EFFORTS TIME TO TIME REMINDER TELEPHONIC TALK WHEN IT CAME TO KNOW THAT IMPORTER NOT IN A POSITION TO REMIT MONEY IN CONVERTIBLE FOREIGN EXCHANGE DUE TO FINANCI AL CRISES ON HIS PART THE ULTIMATELY THE APPELLANT ON 31.01.2010 AGAINST THE EXPORT OF GOODS CLAIM WERE FILED WITH THE SAID INSURANCE COMPANY FOR RS.2,60,26,065/ - , INSURANCE COMPANY AFTER DEDUCTING THE AMOUNT OF COMMISSION OF RS. 13,01,305/ - ON BALANCE AMO UNT OF RS.2,47,24,760/ - AT THE RATE OF 80% ISSUED CHEQUE OF RS. 1,89,41,934/ - SIR, THE CHEQUE ISSUED BY THE INSURANCE COMPANY IN ALL PRACTICE PURPOSES DEEM TO BE TREAT THE MONEY RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE BY THE APPELLANT NOT DIRECTLY BUT THR OUGH THE INSURANCE COMPANY SO THE AMOUNT PROVIDED BY THE INSURANCE CO. RS. 1,89,41,934/ - AND LATER ON A SUM OF RS.6,51,644/ - IS REQUIRED TO BE TREATED PART OF EXPORT TURN OVER FOR THE PURPOSE OF CALMING DEDUCTION U/S 10B . J) ECGC WAS ESTABLISHED TO STREN GTHEN THE EXPORT PROMOTION BY COVERING THE RISK OF EXPORTING ON CREDIT. IT FUNCTIONS UNDER THE ADMINISTRATIVE CONTROL OF THE MINISTRY OF COMMERCE & INDUSTRY, DEPARTMENT OF COMMERCE, GOVERNMENT OF INDIA. IT IS MANAGED BY A BOARD OF DIRECTORS COMPRISING REPR ESENTATIVES OF THE GOVERNMENT, RESERVE BANK OF INDIA, BANKING, AND INSURANCE AND EXPORTING COMMUNITY. I EXPORT CREDIT INSURANCE IS DESIGNED TO PROTECT EXPORTERS FROM THE CONSEQUENCES OF THE PAYMENT RISKS, BOTH POLITICAL AND COMMERCIAL, AND TO ENABLE THEM TO EXPAND THEIR OVERSEAS BUSINESS WITHOUT FEAR OF LOSS. 17 K) ECGC IN TURN GO IN FOR RE - INSURANCE FROM FOREIGN AGENCIES AND NORMALLY THE PAYMENTS THEY RECEIVE IN FOREIGN CURRENCY AGAINST THE DEFAULT OF THE BUYERS IN OTHER WORD ULTIMATELY MONEY RECEIVED IN CONV ERTIBLE FOREIGN EXCHANGE BY THE INSURANCE INSTEAD OF THE EXPORTER SO THE PURPOSE OF EARNING THE FOREIGN CURRENCY WILL BE SERVED L) THE AO SIMPLY ON THE GROUND THAT NO DIRECT PAYMENT RECEIVED WILL NOT AMOUNT TO DENIAL OF THE BENEFIT OF THE SAME , THE A. O . SHOULD A CONSTRUED LIBERALLY THE PROVISION OF GRANTING INCENTIVE PROVISION FOR THE GROWTH OF INDUSTRY AS WELL AS ECONOMY GROWTH IN AS MUCH WHEN ON THE POINT IN ISSUE TWO POSSIBLE INTERPRETATION OF PARTICULAR SECTION WHICH AKIN TO A CHARGING SECTION THE I NTERPRETATION WHICH IS FAVORABLE TO THE ASSESSEE SHOULD BE PREFERRED ATTENTION IS BEING INVIT ED TO THE FOLLOWING DECISION.: - BAJAJ TEMPO LTD. 196 ITR 188 (SC) - JUGGILAL KAMLAPAT VS. CIT (1959) 73 ITR 702 (SC) - CIT VS. SOUTH ARCOT DISTRICT CO - OPERATIVE MA RKETING SOCIETY LTD. 176 ITR 117 (SC) AT PAGE NO. 119) - CIT VS. PODDAR CEMENT [P] LTD [1977 226 ITR 625 - CIT VS. SHAAN FINANCE PVT. LTD [1998] 231 ITR 308 [SS] IN ALTERNATIVE AND WITHOUT PREJUDICE WE WISH TO DRAW YOUR ATTENTION TO AMENDMENT OF SE CTION 155 TO ENABLE THE ASSESSING OFFICER TO ALLOW DEDUCTION IN RESPECT OF CONVERTIBLE FOREIGN EXCHANGE RECEIVED OR BROUGHT INTO INDIA. 18 19.1 UNDER THE EXISTING PROVISIONS OF SECTION 155(13), THE ASSESSING OFFICER HAS POWER TO RECTIFY AN ASSESSMENT ORDER WHEREI N DEDUCTION UNDER SECTIONS 80HHB, 80HHC, 80HHD, 80HHE, 80R, 80 - 0 ETC. HAS NOT BEEN ALLOWED ON THE AMOUNT OF FOREIGN EXCHANGE WHICH HAS NOT BEEN RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE IN INDIA BUT IS SUBSEQUENTLY RECEIVED OR BROUGHT INTO INDIA WITH THE AP PROVAL OF THE COMPETENT AUTHORITY. 19.2 SIMILAR PROVISIONS ARE NOT AVAILABLE IN RESPECT OF THE PROVISIONS OF SECTIONS 1OA, 1 OB AND 1 OB A. SECTIONS 1OA, 1 OB AND 10BA ALSO PROVIDE THAT FOREIGN EXCHANGE MAY BE BROUGHT INTO INDIA WITHIN SIX MONTHS FROM THE END OF THE FINANCIAL A* YEAR OR WITHIN SUCH TIME AS MAY BE EXTENDED BY THE COMPETENT AUTHORITY. HOWEVER, UNDER THE EXISTING PROVISIONS OF SECTION 155, THE ASSESSING OFFICER IS NOT EMPOWERED TO RECTIFY HIS ASSESSMENT ORDER WHEREIN DEDUCTION UNDER SECTIONS 10A, 10B OR 10BA HAS NOT ALLOWED ON THE AMOUNT OF FOREIGN EXCHANGE WHICH HAS NOT RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE IN INDIA BUT HAS SUBSEQUENTLY BEEN RECEIVED OR BROUGHT INTO INDIA WITH THE APPROVAL OF THE COMPETENT AUTHORITY. 19.3 WITH A VIEW TO ENABLE THE ASSESSING OFFICER TO RECTIFY THE ORDERS UNDER SECTIONS 10A OR 10B OR 10BA, SUB - SECTION (11 A) HAS BEEN INSERTED IN SECTION 155 OF THE INCOME - TAX ACT SO AS TO PROVIDE THAT WHERE IN THE ASSESSMENT FOR ANY YEAR , THE DEDUCTION UNDER SECTION 1 OA OR SEC TION 1OB OR SECTION 1 OB A HAS NOT BEEN ALLOWED ON THE GROUND THAT SUCH INCOME HAS NOT BEEN RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE IN INDIA, OR HAVING BEEN 19 RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE OUTSIDE INDIA, OR HAVING BEEN CONVERTED INTO CONVERTIBLE FOREIGN EX CHANGE OUTSIDE INDIA, HAS NOT BEEN BROUGHT INTO INDIA, BY OR ON BEHALF OF THE ASSESSEE WITH THE APPROVAL OF THE RESERVE BANK OF INDIA OR SUCH OTHER AUTHORITY AS IS AUTHORIZED UNDER ANY LAW FOR THE TIME BEING IN FORCE FOR REGULATING PAYMENTS AND DEALINGS IN FOREIGN EXCHANGE AND SUBSEQUENTLY SUCH INCOME OR PART THEREOF HAS BEEN OR IS RECEIVED IN, OR BROUGHT INTO, INDIA IN THE MANNER AFORESAID, THE ASSESSING OFFICER SHALL AMEND THE ORDER OF ASSESSMENT SO AS TO ALLOW DEDUCTION UNDER SECTION 10A OR SECTION 10B O R SECTION 10BA, AS THE CASE MAY BE, IN RESPECT OF THEIR INCOME OR PART THEREOF AS IS SO RECEIVED IN, OR BROUGHT INTO, INDIA. THE PROVISIONS OF SECTION 154 SHALL, SO FAR AS MAY BE, APPLY THERETO, AND THE PERIOD OF FOUR YEARS SHALL BE RECKONED FROM THE END OF THE PREVIOUS YEAR IN WHICH SUCH INCOME IS SO RECEIVED IN, OR BROUGHT INTO, INDIA. 19.4 THIS AMENDMENT TAKES EFFECT FROM 13 TH JULY, 2006. C) SINCE IN THE PRESENT CASE ON THE BASIS OF APPLICATION FILED FOR THE EXTENSION TO RECEIVED CONVERTIBLE F OREIGN EXCHANGE DEEMED TO BE HAVE GRANTED AS PER THE DECISION OF MUMBAI HIGH COURT IN CASE OF MORGAN STANLEY ADVANTAGE SERVICES PVT. LTD. 339 ITR 291 APPELLANT IS ENTITLED THROUGH ENTITLED TO PROVIDE NECESSARY IN RELIEF IN RESPECT OF THE FUND RECEIVED THRO UGH CONVERTED FOREIGN EXCHANGE THE DETAIL OF WHICH HAS BEEN GIVEN.. D) THAT APPELLANT CONTINUE PURSUANCE TO THE IMPORTER PARTY FOR THE PAYMENT OF EXPORTED GOODS IN CONVERTIBLE FOREIGN EXCHANGE 20 AND DUE TO THE EFFORTS OF THE APPELLANT BY THE TIME OF JULY 20 14 ABLE TO RECEIVE AMOUNT IN RESPECT OF BILL NO. 51, 55 & 70 THE AGGREGATE AMOUNT RECEIVED IN INDIAN RS. 74,57,669/ - USA $ 1,33,512 ON WHICH PROVISION OF SUB CLAUSE 11(A) OF SECTION 155 OF THE INCOME TAX ACT, INSERTED BY THE TAXATION LAWS (AMENDMENT) AC T 2006 WITH EFFECT FROM 13.07.2006. E) THAT THROUGH THE PAPER BOOK PAGE NO. 55 TO 70 ATTENTION IS BEING INVITED TO THE DECISION OF BANGALORE BENCH, BOMBAY BENCH AND DELHI BENCH ON THE POINT OF INTERPRETATION AND FILLING OF APPLICATION FOR THE RECTIFICAT ION U/S 155 (11 A) WITHIN A PERIOD OF 4 YEARS FROM THE END OF PREVIOUS YEAR THAT ALL THESE FOUR DECISION WHICH APPEARS AT P. B. NO. 55 TO 71 IS SQUARELY APPLICABLE TO THE PRESENT APPLICABLE CASE AND ACCORDING TO WHICH THE CONVERTIBLE FOREIGN EXCHANGE RECEI VED IN RESPECT OF BILL NO. 51, 55, 70 THE DETAIL OF WHICH SPELL OUT AT P. B. NO. 45 THE AMOUNT OF RS.74,57,699/ - IS TAKEN IN TO CONSIDERATION FOR DETERMINING THE EXPORT TURNOVER AND FOR RECALCULATION OF DEDUCTION U/S 10B SO NECESSARY DIRECTION IS GIVEN TO THE ASSESSING AUTHORITY AS TO PROVIDE NECESSARY RELIEF. 5.2 ON THE OTHER HAND LD. D.R. HAS REPEATED ALL THE REASONS GIVEN BY THE A.O. AND THE LD. CIT(A) IN THIS REGARD. 5.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE RELEVANT MATE RIAL ON RECORD. THE ADDITION OF RS. 97,11,122/ - HAS RESULTED FROM TWO REASONS : - 21 (I) THE A.O. HAS EXAMINED FOB VALUE FOR THE PURPOSE OF COMPUTING EXEMPTION U/S 10B OF THE ACT AND HAS FOUND THAT PAYMENTS OF RS. 2,14,42,571/ - WAS RECEIVED IN INDIAN CURRENCY THOU GH THE INSURANCE COMPANY NAMELY ECGC WHEN THE IMPORTER MR. AHMED KHALIL AL REHMAN ITAYAT TRADING ESTABLISHMENT FAILED TO MAKE PAYMENTS. THE A.O. HAS EXCLUDED THIS RECEIPT FROM THE EXPORT - TURNOVER. (II) PAYMENT WORTH FOB RS. 21,00,813/ - RECEIVED BEYOND THE SPEC IFIED TIME. 5.4 THE CONTENTION OF THE ASSESSEE IS THAT THE RECEIPT THOUGH CCGG IS TO BE CONSIDERED AS RECEIPT IN THE CONVERTIBLE FOREIGN EXCHANGE. AND THAT THE RECEIPT OF RS. 21,00,813/ - WAS RECEIVED DURING THE DEEMED EXTENDED PERIOD AND HENCE IT IS ALSO TO BE INCLUDED IN THE EXPORT TURNOVER. THE CASE OF THE REVENUE STAND WELL EXPLAINED BY THE AUTHORITIES AND THE ESSENCE OF WHICH ARE GIVEN IN POINTS (I) AND (II) AS DISCUSSED ABOVE AS THE REASONS FOR DISALLOWANCE. 5.5 AFTER CONSIDERING THE SUBMISSIONS OF T HE PARTIES WE FIND THAT THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF EIH LIMITED VS CIT REPORTED IN (2011) 244 CTR 353 (COPY ENCLOSED) HAS RULED THAT WHEN REMITTANCES ARE RECEIVED IN INDIAN CURRENCY IN RESPECT OF THE EXPORTED GOODS (FOOD ETC. IN THAT CA SE0 TO THE INTERNATIONAL AIR LINES AT MUMBAI AND NEW 22 DELHI, THIS RECEIPT IN CONVERTIBLE FOREIGN EXCHANGE AND THE ASSESSEE IS ENTITLE TO DEDUCTION U/S 80HHC OF THE ACT. THE CALCUTTA HIGH COURT HAS RELIED AND REFERRED TO A JUDGEMENT OF HONBLE RAJASTHAN HI GH COURT AND THE SUPREME COURT IN THIS REGARD. IT WAS CORRECTLY ARGUED BY LD. A.R. THAT THE REQUIREMENT FOR EARNING FOREIGN CURRENCY U/S 10B AND UNDER SECTION 80HHC ARE EXACTLY IDENTICAL EXPLANATION (2)(II) TO SECTION 10B READS : - (II) CONVERTIBLE FOREIGN EXCHANGE MEANS FOREIGN EXCHANGE WHICH IS FOR THE TIME BEING TREATED BY THE R.B.I. AS CONVERTIBLE FOREIGN EXCHANGE FOR THE PURPOSE OF THE FOREIGN EXCHANGE REGULATION ACT, 1973 AND ANY RULES MADE THERE UNDER OR ANY OTHER CORRESPONDING LAW FOR THE TIME BEING IN FORCE. 5.6 LIKEWISE EXPLANATION (A) TO SECTION 80HHC OF THE ACT READS AS UNDER : - C ONVERTIBLE FOREIGN EXCHANGE WHICH IS FOR THE TIME BEING TREATED BY THE R.B.I. AS CONVERTIBLE FOREIGN EXCHANGE FOR THE PURPOSES OF THE FOREIGN EXCHANGE REGULATION A CT, 1973 AND ANY RULES MADE THERE UNDER. THUS THE PAYMENT RECEIVED FROM EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD. ALTHOUGH RECEIVED IN INDIAN RUPEE BY THE ASSESSEE - FIRM 23 HAS TO BE CONSIDERED AS CONVERTIBLE FOREIGN EXCHANGE UNDER EXPLANATION (2)(II ) AS ABOVE. 5.7 THE BOMBAY HIGH COURT IN CIT VS PFIZER LTD. (2011) 330 ITR 62 HAS HELD THAT INSURANCE CLAIM ON STOCK IN TRADE AS BUSINESS INCOME FOR CALCULATING ELIGIBLE PROFITS U/S 80HHC. A CONTRACT OF INSURANCE IS A CONTRACT OF INDEMNITY. THE INDEMNIF ICATION STANDS ON THE SAME FOOTING S THE INCOME. THE ASSESSEE TRIED TO RECOVER FROM THE EXPORTER BUT HAD TO RECOVER FROM THE INDEMNIFIER COMPANY. THERE IS NO BILATERAL TRADE TREATING BETWEEN THESE COUNTRIES AND ANY DISPUTE ARISING THEREFROM ARE CONSIDERED AS RECEIPT IN FOREIGN EXCHANGE FOR THE PURPOSES OF FERA AND RBI. THE REVENUE HAS NOT EXPLAINED THIS LEGAL POSITION EITHER IN THE ASSESSMENT ORDER OR THE APPELLATE ORDER. THEREFORE, THE RECEIPT THOUGH INSURER HAS TO BE TREATED AS ELIGIBLE RECEIPT US/ 10B OF THE ACT. IN RESPECT OF BELATED RECEIPT OF RS. 21,00,813/ - , THE LOGIC THAT THE ASSESSEE HAD APPLIED FOR EXTENSION BUT IT WAS DEEMED APPROVED AND IN VIEW OF THE JUDGEMENT OF HONBLE APEX COURT IN THE CASE OF J.B. BODA AND CO. P. (LTD. ) 223 ITR 271 (S.C.) W E ALLOW THIS SUM ALSO ELIGIBLE FOR DEDUCTION U/S 10B OF THE ACT. THE ULTIMATE AIM OF THESE PROVISIONS IS TO GIVE INCENTIVE FOR EXPORT. FOR DEEMED ALLOWANCE THE JUDGEMENT OF BOMBAY HIGH COURT IN THE CASE OF CIT VS MORGAN STANLEY ADVANTAGE 24 SERVICES P. LTD. R EPORTED IN (2011) 339 ITR 291 WILL APPLY AND WHEN NO DECISION IS TAKEN ON SUCH A APPLICATION IT WOULD BE DEEMED AS APPROVED U/S 10A(3) OF THE ACT. WE HAVE FOUND THAT BOTH LD. A.O. AS WELL AS LD. CIT(A) HAVE IGNORED SUBMISSIONS OF THE ASSESSEE, AFTER DISCUS SING THE SAME IN THEIR RESPECTIVE ORDER. ACCORDINGLY, WE ORDER TO DELETE THE IMPUGNED ADDITION OF RS. 97,11,122/ - BY TREATING BOTH THE ABOVE RECEIPT AS ELIGIBLE U/S 10B OF THE ACT. 6. IN THE RESULT, THE APPEAL OF REVENUE IN ITA NO 233/JU/2014 IS DISMISSE D AND THAT OF THE ASSESSEE IN ITA NO. 177/JU/2014 IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 30 TH SEPTEMBER , 2014. SD/ - SD/ - (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT ME MBER JUDICIAL MEMBER DATED : 30 TH SEPTEMBER , 2014 VL/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR SENIOR PRIVATE SECRETARY ITA T, JODHPUR 25