Decided on August 30,1967



- (1.) THIS is a reference at the instance or the Commissioner of Income-tax, Kerala, by the Income-tax Appellate Tribunal, Madras Bench, under Section 256 (1) of the income-tax Act, 1961. The assessment year concerned is 1963-64; and the accounting period the Samvat year 2018. The question referred is: "whether on the facts and in the circumstances of the case the assesses was an exporter entitled to the rebate contemplated in Section 2 (5) (i) of the Finance Act. 1963?"
(2.) SECTION 2 (5) (i) of the Finance Act, 1963, provides that an assessee (other than a company) "whose total income includes any Profits and gains derived from the export of any goods or merchandise out of India, shall be entitled to a deduction, from the amount of income-tax and super-tax with which he is chargeable of an amount equal to the income-tax and super-tax calculated respectively at one-tenth of the average rate of income-tax and of the average rate of super-tax on the amount of such profits and gains included in the total income" During the Samvat year 2018 the asses-see received a sum of Rs. 53,446/- by way of commission. That sum included a sum of Rs. 22,776/- which the assessee earned for his services in pursuance of Annexure A dated the 14th May 1959.
(3.) THE assessee is not a company, and the sole question for determination is whether the sum of Rs. 22,776/- earned by the assessee in pursuance of annexure A can be considered as "profits and gains derived from the export of any goods or merchandise out of India" Annexure A is entitled an Agency Agreement. The clauses from that Agreement extracted in the order of the Appellate Tribunal and in the Statement of the Case read an follows: "i The Agents undertake to effect the purchase of Tea from the Cochin auctions or private sales for the Buyers in full accordance with the buyers' instructions. In no case are the Agents to buy defective lea including mouldy, musty, cheesy, sour, and damaged tea or tea with foreign admixture, with foreign smell, and increased moisture. XV. The Buyers, are to pay to the Agents an Agent's commission at the rate of 1/4 (one-fourth) per cent from the amount of the auction value of the goods purchased. All expenses connected with the storing, marking, booping, gunnying, repairing (if necessary), delivery of the goods to the port, loading, export duties, Port Commissioner's toll, customs charges and insurance (after prompt) are to be borne by the Buyers (the schedule of the rates of the expenses is attached hereto ). XVI. Payment is to be effected by an irrevocable Letter of Credit opened by the Buyers in favour of the Agents with the Central Bank of India ltd. , Cochin, for the full F. O. B. value of the goods against the Agents' and Brokers' invoices, full set of clean on board Bills of Lading and lotby-lot specifications for the tea shipped, according to the form presented by the Buyers. The Buyers undertake to open the Letter of Credit upon receipt of the documents showing the quantities, prices and preliminary total F. O. B. amount of the tea purchased. In case of any delay in shipment preliminary payment of the actual value of the goods is to be made on prompt date against invoices, godown warrants and specifications. " For the sake of completeness the entire Agreement is reproduced as an Appendix to this judgment. (Not reproduced as not necessary for reporting--Ed.);

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