Commissioner of Income Tax vs Rajendra Kasliwal

This appeal is directed against the order and judgment dated 29th August, 2001 passed by the ITAT, Jaipur. Following questions have been referred by the income tax Appellate Tribunal, Jaipur, for the opinion of this Court :-- "1. Whether in the facts and circumstances of the case, the ITAT was justified in holding that the assessee is entitled to claim deduction u/s 80HHC in respect of counter sales effected to foreign tourists in its showroom, in view of Explanation (aa) to section 80HHC?

Whether in the facts and circumstances of the case, the ITAT was justified in allowing the benefits of deductions u/s 80HHC to the assessee in respect of counter sales effected to the foreign tourists in absence of any proof or evidence that the goods so sold have been cleared at any custom station?"

Mr. Mathur, learned Counsel for the appellant, submits that as there is no specific finding that the goods required clearance, therefore when the goods are sold in a shop in India, the assessee is not entitled for benefit of section 80HHC of the Act.

On the other hand, learned Counsel for the assessee submits that issue is squarely covered by the decision of the Apex Court in the case of Commissioner of Income Tax Vs. Silver and Arts Palace, and the decision of this Court in the case of CIT v. Jewels Emporium [D.B. IT Reference No. 9 of 1997, dated 7-1-2003].

He also drew our attention to the finding of the CIT(A). In para 3.2, the CIT (Appeals) had stated that there is a documentary evidence to the effect that the goods have been purchased against payment in foreign exchange. It is only after the Customs Authorities clear the goods so purchased that the bona fide foreign tourists are able to carry away with them the items purchased from India. Thus, the goods sold by the appellant to the foreign tourists in shop counter involved clearance at the Customs Stations. On such sale, the benefit of section 80HHC cannot be denied, only on the ground that the sales are effected in India.

The Tribunal has also followed the decision of their Lordships in the case of Silver & Arts Palace (supra) referred to above, and allowed the claim of the assessee. Thus, the assessee is entitled to the benefit of section 80HHC of the Act. Considering the submissions and material on record, no interference is called for. The appeal stands dismissed.