INDIAN SPICES CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income Tax Appellate Tribunal, Cochin Bench has referred the following two questions of law under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') for decision by this court at the instance of the assessee :

(2.) THE brief facts necessary for consideration of this case are as follows: The applicant -assessee is a partnership firm carrying on business in the purchase and sale of raw rubber, coconut oil and pepper. Pepper trade consists of both export sales and local sales. The assessee had maintained separate accounts for raw rubber which -consists of local sales only.

(3.) SRI . P. Balchandran, learned counsel for the applicant submits that the provisions of section 80HHC(3)(b) has application only to a case where the assessee is engaged in the export of pepper and also in local sale of pepper. According to the counsel in a case where the assessee is having local sales of rubber and coconut also the turnover of the same cannot be taken into account for the purpose of computation of the profits of the export business under section 80HHC of the Act. In other words, the profits in the export business has to be worked out only in accordance with the provisions of section 80HHC(3)(a) of the Act. The counsel also relied on the decision of the Madras High Court in CIT v. Madras Motor Ltd. (2002) 257 ITR 601. The counsel also submitted that the decision of this court in CIT v. Parry Agro Industries Ltd. : [2002]257ITR41(Ker) is distinguishable, in that in the said decision, the assessee therein was engaged in the export sale and in the local sale of the very same commodity and further the question therein was as to whether, in a case where the assessee had kept separate books of account both in respect of export sales and in respect of local sales there is any question of application of clause (b) of section 80HHC(3) of the Act.