Law:

Section:

Section 80HHC of the Income-tax Act, 1961 - Deductions - Exporters - Assessment year 1995-96 - Whether in order to compute deduction under section 80HHC, direct and indirect costs have to be reduced from export turnover, which in any case can not include freight and insurance charges attributable to transportation of goods or merchandise - Held, yes FACTS The assessee-company was carrying on business of export of granite. For the assessment year 1995-96, the assessee filed its return of income along with the requisite certificate and claimed deduction under section 80HHC. The same was taken up for scrutiny by the Assessing Officer and according to him, the export turnover of Rs. 79.71 lakhs claimed by the assessee was not correct and that the FOB value of the assessee had to be taken into consideration and, accordingly, computed export value at Rs. 70.25 lakhs. Thereafter, he deducted all the direct and indirect costs from the said amount including freight and insurance charges. Accordingly, the Assessing Officer worked out relief under section 80HHC to Rs. 5.42 lakhs. On appeal, the Commissioner (Appeals) while deducting direct costs from export turnover, excluded freight and insurance charges and thereby allowed higher relief to assessee under section 80HHC. The Tribunal upheld the order of the Commissioner (Appeals). On revenue's appeal : HELD On a conspectus reading of the relevant provisions, it becomes clear that while determining the export turnover with regard to goods exported outside India or trading of the goods as per section 80HHC(3)(b), freight and insurance charges have to be deducted at the first instance. In other words, what the definition of 'export turnover' states is that freight and insurance charges attributable to the transportation of goods or merchandise beyond the customs station have to be excluded. Even the definition of 'total turnover' does not encompass freight and insurance charges. After excluding such charges the computation of export turnover must be made and it is from the said figure that 'direct' and 'indirect costs' has to be deducted. While doing so the definition of direct and indirect costs have to be taken into…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492