NIRU JEWELS P.LTD,MUMBAI vs. DCIT (OSD)-1CENTRAL RG 7, MUMBAI

In this appeal, the assessee is aggrieved for restricting the claim of deduction u/s.10A to the extent of exports sale proceeds received upto 30-9-2008 on the plea that necessary extension of time to receive foreign exchange from RBI was not obtained by the assessee. Accordingly, CIT(A) held that export turn over eligible for deduction u/s.10A is restricted to the turnover of Rs.98,38,23,087/- as against turnover of Rs.125,55,29,231/-.

Rival contentions have been heard and record perused. Facts in brief are that assessee company is engaged in business of manufacturing and export of diamond studded jewellery. Its claim for deduction u/s.10A was restricted by CIT(A) to the extent of receipt of foreign exchange uptil 30-9-2008. It was argued by ld. AR that RBI has already issued circular in respect of units situated in SEZ(Special Economic Zone), relaxing the realisation to the exports proceeds. Reliance was also placed on the decision of coordinate bench in the case of Tara Jewels Exports Pvt. Ltd., ITA No.662/Mum/2012, dated 29-1-2014, wherein it was held that after the RBI have clarified that it has not stipulated any time period for the realisation of sale proceeds for SEZ units, it can only be considered as having allowed and indefinite period for the same. Consequently, it cannot be said that the condition of Section 10A was not satisfied.

We have considered rival contentions and found that deduction u/a.10A was restricted to the extent of export receipts realised uptll 30-9- 2008. The assessee company is situated In SEZ, the RBI, the Competent Authority, u/s.10A(3) of the Act had vide its Circular bearing A.P. -(DIR Series) Circular No:91 dated 1st April, 2003 relaxed the realization of export proceeds, which reads as under: