Income Tax Appellate Tribunal - Delhi
The Asstt. C.I.T. vs Pamir International Co. on 23 July, 2003
ORDER
V. Dongazathang, President
1. This appeal of the revenue is directed against the order of the CIT (Appeals) for assessment year 1992-93.
2. The assessee is a merchant exporter. It declared export sales of Rs. 76,19,940 besides receipt of Rs. 6,73,256/- on account of foreign exchange variation. The assessee claimed deduction u/s 80HHC on the export turnover of RS. 69,92,408 consisting of FOB value of Rs. 64,32,498 and foreign exchange difference of Rs. 6,73,256. The assessee, therefore, reduced an amount of Rs. 1,13,347 which was not brought to India.
3. The assessee also claimed direct cost at Rs. 46,55,340 after deducting Rs. 96,900 on account of the cost relating to export, the proceeds of which were not brought to India. The AO was of the opinion that the foreign exchange variation of Rs. 6,73,256 included proportionate cost of freight and insurance on which deduction u/s 80HHC was not admissible. He accordingly estimated the proportionate freight and insurance in the foreign exchange variation at Rs. 1,07,820 which was excluded from the export turnover.
4. Similarly, the A.O. held that the cost of exports referred to the entire cost of goods exported and the claim of deduction on account of unrealized sale proceeds was not admissible. He accordingly denied deduction on a further sum of Rs. 96,000. The A.O determined the allowable deduction u/s 80HHC at Rs. 17,16,436 which was allowed.
5. Aggrieved by the said order, the assessee took up the matter in appeal before the CIT(A) and it was submitted that the foreign exchange variation of Rs. 6,73,256 was entirely on account of sale proceeds of exports. The freight and insurance charges actually paid had been excluded from the CIF value of exports to arrive at the FOb value of exports on which deduction was claimed. It was further stated that as export proceeds of Rs. 1,13,347 were not brought to India, it was excluded from the export turnover and the cost of exports proportionate to the unrealized proceeds amounting to Rs. 96,000 have been already excluded from the total cost of export. The learned CIT(A) agreed with the assessee and allowed the deduction as claimed by the assessee.
6. The revenue is aggrieved and has come up in appeal before the Tribunal. At the hearing none appeared on behalf of the assessee. After hearing Shri Salil Gupta, learned Sr. D.R., we are of the view that no interference is called for in this regard as the learned CIT(A) has rightly allowed the deduction on the facts recorded by him. Since there is no infirmity in the order, the same is upheld.
7. In the result, the appeal fails and is dismissed.