INCOME TAX ACT, 1961

Section 80HHC

Deduction under section 80HHC - Allowability - Export turnover - Export sale proceeds in foreign exchange due to adverse exchange rate of rupee

Question arose for consideration was firstly or not extra realization in terms of rupees for export sale due to adverse exchange rate of rupee would form part of export turnover of assessee and if the answere to the first question was in affirmative, whether benefit contemplated under section 80-HHC could be denied to assessee.Held: It was not possible for assessee to know as on date of export as to the manner in which exchange rate might fluctuate in future. Subsequent excess realization in Indian rupees due to adverse exchange rate of rupee could not be said to be unrelatable to particular export and thus extra realization made in rupees for export sale proceeds in foreign exchange due to adverse exchange rate of rupee would be part of the export turnover in the year of receipt subject to foreign exchange coming into the country within statutorily prescribed time period. Export sale proceeds received in accordance with and in terms of export contract and with approval of RBI could not be ignored for the purpose of relief under section 80HHC. Matter was remanded to Tribunal for fresh consideration accordingly.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 1996-97

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