Commissioner Of Income Tax Chennai v. M/S.aswini Fisheries Limited (Formerly Century Cold Storage) 136

In the High Court of Judicature at Madras Dated : 09.07.2008 Coram :- The Honourable Mr.Justice K.RAVIRAJA PANDIANandThe Honourable Mr.Justice P.P.S.JANARTHANA RAJA Tax Case (Appeal) Nos.890 and 891 of 2008 Commissioner of Income TaxChennai. .. Appellant in both T.CsVs. M/s.Aswini Fisheries Limited(Formerly Century Cold Storage)136 & 139, Old MahabalipuramRoad, KarapakkamChennai – 600 096. .. Respondent in both TCs TAX CASE (APPEAL) filed under Section 260A of the Income TaxAct 1961 against the order of the Income Tax Appellate TribunalMadras 'A' Bench dated 5.8.2005 in I.T.A.Nos.1321 and 1322/Mds/2000for the assessment years 1994-95 and 1997-98 respectively againstthe order of the Commissioner of Income-Tx (A) IV-Chennai is ITANo.176/38/2000-01, date of order 31.5.2000 for the assessment year1994-95 and 1997-1998 and against the order of the DeputyCommissioner of Income-Tax Company Circle -IV (1) Chennai -6000 006is PAN/GIR-226-A date of order 27.3.2000 for the assessment year1997-98 and against the order of the Deputy Commissioner of Income-Tax Company Circle-IV (1) Chennai -600 006 is PAN/GIR-226-A Date oforder 27.3.2000 for the assessment year 1994-1995. For Appellant : Mrs.Pushya Sitaraman JUDGMENTJUDGMENT OF THE COURT WAS DELIVERED BY K.RAVIRAJA PANDIAN,J The revenue came up on appeal against the order of theIncome Tax Appellate Tribunal Madras 'A' Bench dated 5.8.2005 inI.T.A.Nos.1321 and 1322/Mds/2000. The relevant assessment years are1994-95 and 1997-98. The common substantial questions of lawformulated in these appeals are as follows:- https://hcservices.ecourts.gov.in/hcservices/ "Whether in the facts and circumstancesof the case, the Tribunal was right in holdingthat the commission termed as "additional saleprice/sale consideration" received from theexport house constitutes eligible profiteligible for the benefit of Section 80HHC ofthe Income tax Act? 2. Whether in the facts and circumstancesof the case, the Tribunal was right in holdingthat the sale receipts through export houses,forms part of export turnover for the purposeof determining the deduction under Section80HHC? 2. As the issue involved in these appeals is one and thesame, these appeals are taken together and are disposed of by thiscommon order. The Tax Case (Appeal) No.890 of 2008 is taken as atypical case, the facts of which are as follows: https://hcservices.ecourts.gov.in/hcservices/ "Whether in the facts and circumstancesof the case, the Tribunal was right in holdingthat the commission termed as "additional saleprice/sale consideration" received from theexport house constitutes eligible profiteligible for the benefit of Section 80HHC ofthe Income tax Act? 2. Whether in the facts and circumstancesof the case, the Tribunal was right in holdingthat the sale receipts through export houses,forms part of export turnover for the purposeof determining the deduction under Section80HHC? 2. As the issue involved in these appeals is one and thesame, these appeals are taken together and are disposed of by thiscommon order. The Tax Case (Appeal) No.890 of 2008 is taken as atypical case, the facts of which are as follows: The assessee is a sea food exporter. The return of incomewas filed on 20.2.1995 for the assessment year 1994-95 admitting nilincome after deduction under Section 80HHC and 80I. The return wasprocessed under Section 143(1)(a). The assessee company apart fromexporting sea-food to the extent of FOB value of Rs.3,08,43,262/-directly for the assessment year 1994-95, also as supportingmanufacturer exported through export house to the extent of FOB valueof Rs.14,57,56,576/-. The assessee company has received an amount ofRs.64,72,768/- from the export houses as margin of sale price overand above the actual sale price of the exports. The assessee hasclaimed that this is additional sale consideration. The claim has notbeen accepted by the assessing officer on the premise that the amountpaid by the export houses is nothing but a portion of exportincentive earned by the export house on account of the exports madethrough them which is passed on to the supporting manufacturer andthese receipts are squarely fall within the clause (baa) under theexplanation to Section 80HHC(4A) as other receipt of similar nature.That order has been carried on appeal to the Commissioner of Income-tax (Appeals, who allowed the appeal by following the Tribunal'sorder in the assessee's own case for the assessment years 1994-95 and1995-96 (I.T.A.Nos.54 and 1869/Mds/98). The revenue carried thematter on appeal to the Income-tax Appellate Tribunal, whichconfirmed the order of the Commissioner of Income-tax (Appeals). Thecorrectness of the same is now put in issue before this Court inthese appeals by formulating the above said question of law. 3. Learned counsel for the revenue fairly submits that the issueis now once and for all settled by the Supreme Court in the case ofCOMMISSIONER OF INCOME-TAX, THIRUVANANTAPURAM VS. BABY MARINEEXPORTS, (2007) 290 ITR 323. 3. Learned counsel for the revenue fairly submits that the issueis now once and for all settled by the Supreme Court in the case ofCOMMISSIONER OF INCOME-TAX, THIRUVANANTAPURAM VS. BABY MARINEEXPORTS, (2007) 290 ITR 323. 4. In the case of COMMISSIONER OF INCOME-TAX, THIRUVANANTAPURAMVS. BABY MARINE EXPORTS, (2007) 290 ITR 323, the assessee was engagedin the business of selling marine products both in the domesticmarket and also exporting them directly as well as through exporthouses. In relation to exports through export houses, the exporthouse agreed to pay the assessee an incentive of 2.25 per cent of thef.o.b. Value as an incentive commission. The assessee showed thepremium as part of its total turnover for the purpose of the specialdeduction under Section 80HHC of the Income-tax Act, 1961. Theassessing officer rejected the claim of the assessee holding that theassessee, a supporting manufacturer, sold the goods to the exporthouse in respect of which the export house had issued a certificateunder the proviso to section 80HHC(1); that the export house premiumwas nothing but an integral part of sale price realised by theassessee; that the premium could not possibly be considered to beeither commission or brokerage, as a person could not earn commissionor brokerage for himself; and that the export house premium receivedby the assessee was includible in the "profits of the business" ofthe assessee while computing the deduction under section 80HHC. Onappeal by the Department the High Court also held that the assesseewas entitled to the benefit of section 80HHC on the export premiumreceived from the export houses. On appeal to the Supreme Court, theSupreme Court while affirming the decision of the High Court heldthat "since the sales were to the export house the provisions of sub-section (1) of section 80HHC did not apply to the case of theassessee. Only the provisions of sub-section (1A) of section 80HHCapplied." 5. As the questions of law now raised in this appeal havealready been decided against the review in the above said judgment,following the said judgement, these appeals are dismissed.Consequently, the connected M.P.No.1 of 2008 is also dismissed. Sub Asst.Registrar To 1.Assistant Registrar, Income-Tax Appellate Tribunal, III Floor,Rajaji Bhavan, Besant Nagar, Madras 90 (with records five copies).2.The Secretary, Central Board of Revenue, New Delhi (3 copies).3. The Commissioner of Income Tax (Appeals)-IV, Chennai4. The Deputy Commissioner of Income-tax, Company Circle-IV(I),Chennai 5. The Commissioner of Income Tax, Chennai +1cc to Mrs. Pushya Sitaraman, Advocate Sr 36637 SS (CO)km/17.7. Tax Case (Appeal) Ns.890 and 891of 2008