SILVER AND ARTS PALACE Vs. ASSISTANT COMMISSIONER OF INCOME TAX
INCOME TAX APPELLATE TRIBUNAL
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M.A.A. Khan, Judicial Member -
(1.) THIS is an appeal from the order dated 22-5-1991 whereby the learned CIT(A) Rajasthan-II, Jaipur confirmed certain additions/disallowances.
(2.) The assessee is a Registered Firm engaged in the business of manufacture and export of precious/semi-precious stones, gold and silver jewellery, silk and woollen carpets, ivory and handicraft goods. It also deals in shares.
Being a registered exporter of the export products the assessee-firm had been granted on 28-6-1985 by the Government of India, Ministry of Commerce and Industry an Import Licence No. 3085023/C/XX/96/2/86 under Import (Control) Order, 1955 dated 7-12-1955 issued under the Imports and Exports (Control) Act, 1947. The Licence authorised the assessee-firm to import (a) rough diamonds, uncut and unset precious or semi-precious stones, uncut and unset rough synthetic stones and other imitation stones and (b) pearls, real or caliored/undrilled against the goods exported by it. According to the Import Policy for Registered Exporters the assessee-firm could have become eligible for import replenishment of a specified percentage of the licence value (REP entitlement) of the material of import. As per provisions of the Import & Export (Central) Act, 1947 and the Import (Central) Order, 1955 issued thereunder the REP licence were transferable.
(3.) FOR the year under consideration, ending on Diwali 1985, the assessee-firm returned an income of Rs. 1, 37, 623 which included business income of Rs. 2, 69, 278 only against which deductions amounting to Rs. 1, 31, 655 were claimed. Of the total turn-over of Rs. 87, 47, 649 inclusive of sale of shares at Rs. 1, 19, 500, 98. 77% pertained to counter sales in foreign exchange to foreign tourists and direct sales to foreign countries against which the assessee-firm duly received REP licenses. The assessee sold such import licences to various parties of Bombay, Delhi and Jaipur.;
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