SWAYAM CONSULTANCY P LTD Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS appeal under Section 260A of the Income Tax Act, 1961 (the Act) is against the order dated 31.1.2011 of the Income Tax Appellate Tribunal, Hyderabad Bench 'A', in ITA No.l242/H/2010. By the said order, the appeal of the assessee against the order dated 03.2.2010 of the Commissioner of Income Tax (Appeals)-IV, Hyderabad was dismissed holding that the appellant is not entitled to claim deduction under Section 10B of the Act.

(2.) THE appellant is engaged in the manufacturing and assembling of wire and cable drawing/manufacturing machines. It is an assessee within the jurisdiction of the respondent. THE assessee filed income tax returns for the year 2007-08 declaring loss of T 45,469.00. Though the surplus, as per the profit and loss account, is Rs. 1,29,79,828.00, the assessee claimed deduction of Rs. 1,28,97,161.00 under Section 10B of the Act. THEy contended that they are a 100% export oriented unit (EOU) as approved under the scheme of the Government of India, and they are entitled for deduction under Section 10B of the Act. Tine assessing officer noticed that the goods were cleared from the factory on 04.11.2006 and, as per the invoice-cum-challan, the place of delivery is at Attola Village in Silvasa (Daman and Nagar Haveli Union Territory). During the scrutiny of the return, the assessee pleaded that the machinery was delivered to M/s.Chandra Proteco Ltd., (the Agent for short) under Section 143(3) of the Act on the express instructions of the foreign buyer, M/s. Proteco De Marino Ozino and C Sass, Italy (the Proteco for short) and, therefore, it is deemed to be an export for the purpose of Section 10B of the Act. THE assessing officer disallowed deduction holding that the assessee did not fulfil the conditions laid down for deduction under Section 10B of the Act; the goods were delivered in India; and they were not exported out of India. Being aggrieved, the appellant preferred an appeal to CIT (A). While holding that the assessee did not furnish any evidence that the goods had moved out of India so as to fall within the definition of "export", the appeal was dismissed. This view found favour with the learned Tribunal as well.

(3.) EXPORTS and imports are regulated by the Customs Act, 1962 which, among others, repealed the Sea Customs Act, 1878. Section 2(18) of the Customs Act defines "export" to mean "taking out of India to a place outside India". As defined in Section 2(16) of the Customs Act "entry" in relation to goods, inter alia, means an entry made in a bill of entry, shipping bill or bill of export. Sections 50 and 51 of the Customs Act stipulate the procedure for entry of goods for exportation as well as clearance of goods for exportation. For ready reference they are quoted below. Section 50. Entry of goods for exportation.- (1) The exporter of any goods shall make entry thereof by presenting to the proper officer in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export in the prescribed form. (2) The exporter of any goods, while presenting a shipping bill or bill of export, shall at the foot thereof make and subscribe to a declaration as to the truth of its contents. Section 51. Clearance of goods for exportation.- Where the proper officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance and loading of the goods for exportation.