CIT vs. MAGSONS EXPORTS

IN THE HIGH COURT OF DELHI AT NEW DELHI . 01.12.2010 . Present: Ms. Sonia Mathur, Advocate for the appellant/Revenue. . . +ITA 1864/2010 . . The respondent assessee is engaged in the business of export of readymade garments. In the return filed by it for the assessment year 1999- 2000, the Assessing Officer noted that the export proceeds amount to ` 1.20 crores were not realized till 30th September, 1999 which was the stipulated date by which export proceeds has to be realized for computing the benefit of Section 80 HHC of the Act. The Assessing Officer, therefore, did not include the aforesaid amount of ` 1.20 crores for computing the deduction under the aforesaid provision. Before the CIT (A), however, the assessee produced the requisite Certificate which according to him could not be furnished earlier. Acting on this certificate, the CIT (A) directed the Assessing Officer to include the amount of ` 1.20 crores in the export turnover for the computation of deduction u/s 80 HHC of the Act. This order is upheld by the ITAT as well. Three submissions were made by the Revenue in the appeal filed before the ITAT namely; (a) As per the Certificate the money was realized after the stipulated period and, therefore, it could not have been taken into consideration . . (b) The additional evidence was admitted by the CIT (A) under Rule 46A of the Act which was not permissible. (c) The Certificate which was produced was issued by the Indian Overseas Bank which is not a competent authority to issue such certificates, inasmuch as, Circular No.20 dated 28th January, 2002 issued by the Reserve Bank of India, if the invoice value exceed US$ 1,00,000, only competent authority is Reserve Bank of India. . In so far as first contention is concerned, as per Circular No.12 dated 9th September, 2000 issued by the Reserve Bank of India, cases where an exporters has not been able to realize proceeds of shipment within the prescribed period i.e. within six months from the date of exports, for reasons beyond his control, the exporter may apply to Reserve Bank of India in requisite form for extension of period of realization. The assessee herein had adopted that course of action and extension was given. In these circumstances, in our view the ITAT rightly held that even if the export proceeds were realized beyond the period of six months but within the extended period, the said export had to be included in the total export turnover for the purposes of computation under Section 80HHC of the Act. The Tribunal has relied upon the judgments of this Court in Kausales Exports (India) Vs. CIT, 240 ITR 108, Vikram Overseas (P) Ltd. Vs. CIT, 222 ITR 253 and judgments of other High Courts as well. Therefore, we are not agreeable to accept the plea of the Revenue in so far as this ground of challenge is concerned. As far as admission of additional evidence under Rule 46A of the Act is concerned, we find that CIT (A) before admitting the additional evidence, had obtained remand report from the Assessing Officer. No doubt, the Assessing Officer had opposed the admission of the aforesaid evidence which was in the form of Certificate issued by the Indian Overseas Bank. We do not find any infirmity in adopting the procedure for admission the aforesaid additional evidence which was material document touching upon the controversy raised in the appeal. Accordingly, we issue notice limited to the third ground namely whether the Indian Overseas Bank is competent authority to issue the certificate or not. Notice, returnable on 22nd December, 2010. Since this issue is in a short compass, the notice shall indicate that appeal shall be decided finally on the next date of hearing. . . A.K. SIKRI, J. . SURESH KAIT, J. DECEMBER 01, 2010 skb . A-3