COMMISSIONER OF INCOME TAX Vs. JAMEELA

JUDGEMENT

(1.) The appeals by the Department as against two independent assessees raise the following similar questions of law:

(2.) Whether, on the facts and in the circumstances of the case and considering the facts and the question of law involved in Commissioner of Income Tax v. Parry Agro Industries Ltd., (2002) 257 ITR 41 (Ker.) the Tribunal is justified in relying on the same?"

(3.) Shri Ravindranatha Menon, learned Senior Counsel appearing for the Revenue, would impugn the decision of the Tribunal placing reliance on [2002] 257 ITR 41 (Ker.), Commissioner of Income Tax v. Parry Agro Industries Ltd., which according to him, is not applicable. It is urged that the assessees are entitled to such deduction, only to the extent of profits derived from the exports of high sea sales. The profit derived in the course of import of products, which the high sea sales obviously is, cannot be included in the computation of profits eligible for exemption under Section 80HHC. The learned Senior Counsel would rely on Commissioner of Income Tax v. K. Raveendranathan Nair, [2007] 295 ITR 228 (SC), to contend that when there is a loss occasioned in the export business, there could be no claim raised for deduction under Section 80HHC, especially since the benefit is one specifically conferred for the foreign exchange brought into the Country. The assessee's having suffered loss in the export business, cannot claim the benefit under the incentive clause, as it has been termed by the Honourable Supreme Court, is the compelling argument raised.