- (1.) This Income Tax Appeal is directed against an order dated 26th November, 2002 passed by the Income Tax Appellate Tribunal, 'E' Bench, Calcutta, dismissing the assessee's appeal preferred against the order of Commissioner of Income Tax (Appeal) (In short 'CIT') dated 25th November, 1999 for the assessment year 1996-97. By the said order, the CIT had dismissed the assessee's appeal against the Assessment Order dated 26th March, 1999 passed by the Joint Commissioner of Income Tax, Special Range - 7, Calcutta, for the assessment year 1996-97.
(2.) A coordinate Bench of this Court by its order dated 25th July, 2003, admitted the instant appeal for being heard on the following substantial questions of law:- a) Whether extra realization made in rupees for export sale proceeds in foreign exchange due to adverse exchange rate of rupee would be part of the export turnover in the year of receipt? b) Whether export sale proceeds received in accordance with and in terms of the contract and with the approval of Reserve Bank of India could be ignored for the purpose of relief under Section 80-HHC of the Act?
(3.) The undisputed facts of this case are that during the financial year 1992- 1993, the appellant/assessee received an order from P.T. Ispat Indo, an Indonesian company for export of transformers, switch gears, conveyor rolls, etc. for a total CIF value of USD 29,40,000. The terms of payment by the Indonesian company to the assesse was that an advance payment of 10 per cent of the total value would be made ( which came to Rs. 84,81,600/-) and balance 90 per cent would be paid in twelve (12) equal half yearly instalments commencing two years from the mean date of shipment. The Reserve Bank of India (in short "RBI") granted approval in respect of such export on deferred payment terms. The assessee obtained finance from Allahabad Bank against the outstanding dues of 90 per cent of the contract value. Allahabad Bank was in turn refinanced by Export-Import Bank of India.;