COMMISSIONER OF INCOME TAX Vs. P.R. PRABHAKAR

JUDGEMENT

(1.) WHETHER , on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to deduction under s. 80HHC of the IT Act, even though the export business resulted in a loss of Rs. 6,372 ?

(2.) WHETHER , on the facts and in the circumstances of the case, the Tribunal is right in law in holding that commission and brokerage for procuring export contracts for other exporters is exempt under s. 80HHC of the Act on the ground that the same is export profits -

(3.) THE matter relates to the asst. yr. 1990 -91. For the aforesaid assessment year, the gross total income derived by the assessee as commission and brokerage for procuring export contracts for other exporters was to the tune of Rs. 56,69,321. The assessee had also exported goods outside India to the extent of Rs. 3,67,600. However, in respect of such export, the assessee had incurred a loss of Rs. 6,372. In other words, his gross total income was based mainly on the commission and brokerage received by him from other Indian exporters. The assessee had claimed deduction in respect of the aforesaid income under s. 80HHC of the IT Act. The AO came to the conclusion that since the assessee had incurred loss in respect of export business, no exemption could be granted under s. 80HHC. The assessee filed an appeal, which was rejected by the CIT(A). However, on further appeal, the Tribunal relying upon an earlier decision of the Special Bench of the Tribunal reported in International Research Park Laboratories Ltd. vs. Asstt. CIT (1994) 50 TTJ (Del)(SB) 661 came to the conclusion that the commission received from other exporters was also profit derived from export and accordingly, the benefit under s. 80HHC was available in respect of such profit derived as commission/brokerage. The matter has been brought to this Court at the instance of the Revenue in the present reference.