Rajesh Balia, J. - (1.) HEARD learned counsel for the parties : The Income-tax Appellate Tribunal at the instance of the assessee has referred the following question of law said to be arising out of its order passed in I. T. A. No. 865/JP of 1985, for the assessment year 1984-85 : "Whether the Tribunal was right in holding that Section 80HHC would not apply to the assessee for supplies made to ONGC and Oil India Ltd., on the basis of global tender floated by them, which is recognised as deemed exports by the Ministry of Commerce ?"
(2.) THE assessee which is a firm was making supplies to ONGC and Oil India Ltd. on the basis of global tender that was floated by them. THE Ministry of Commerce vide its circular dated September 5, 1983, in order to give a boost to domestic industries and also to effect import substitution provided that domestic companies which on the basis of global tender supplied goods to ONGC and Oil India Ltd. would be entitled to all benefits which are being provided to exporters. Such supplies would be deemed exports and all benefits such as cash subsidy, import replacement would also be made available to such domestic companies. On the basis of this, the assessee made supplies to ONGC and Oil India Ltd. and claimed relief under Section 80HHC of the Income-tax Act. THE plea of the assessee was rejected by the Income-tax Officer on the ground that the assessee had not exported any goods outside India. The Appellate Assistant Commissioner agreed with the finding of the Income-tax Officer and dismissed the appeal of the assessee in this regard and so also the Tribunal. The provisions of Section 80HHC as it stood at the relevant period reads as under : "80HHC. Deduction in respect of export turnover.--(1) Where the assessee, being an Indian company or a person (other than a company), who is resident in India, exports out of India during the previous year relevant to an assessment year any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, the following deductions, namely :-- (a) a deduction of an amount equal to one per cent, of the export turnover of such goods or merchandise during the previous year ; and (b) a deduction of an amount equal to five per cent, of the amount by which the export turnover of such goods or merchandise during the previous year exceeds the export turnover of such goods or merchandise during the immediately preceding previous year. (2) (a) This section applies to all goods or merchandise (other than those specified in Clause (b)) if the sale proceeds of such goods or merchandise exported out of India are receivable by the assessee in convertible foreign exchange. (b) The goods or merchandise referred to in Clause (a) are the following, namely :-- (i) agricultural primary commodities, not being produce of plantations ; (ii) mineral oil ; (iii) minerals and ores ; and (iv) such other goods or merchandise as the Central Government may, by notification in the Official Gazette, specify in this behalf." A perusal of the aforesaid provisions makes it abundantly clear that two essential conditions for invoking the provisions are that assessee must be engaged in the business of export out of India of any goods or merchandise. It is the admitted case that the assessee is not engaged in the business of export out of India, but selling the goods within India which are manufactured in India and purchased by a company within India. The second condition is that the deduction is applicable only if sale proceeds of such goods or merchandise exported out of India are receivable by the assessee in convertible foreign exchange, It is not a case even akin to the case where goods have been exported out of India and the sale proceeds have been received by the assessee in convertible foreign exchange or even if it was receivable in convertible foreign exchange, but due to payment expediency actual payment was made in Indian currency. The assessee was to receive payment in Indian currency only and in fact received payment in Indian currency not by converting the value of foreign currency receivable. There is no provision made where such payment could be deemed to have been received or receivable in India in foreign exchange. No legal fiction can be assumed to exist in a statute when it has not been so provided by the Legislature. Since both the conditions required under the statute for claiming deduction under Section 80HHC are non-existing, the assessee is not entitled to claim deduction. We are of the opinion that the answer being self-evident no question ought to have been referred by the Tribunal to this court. However, we answer the question referred to us in the affirmative, i.e. to say, in favour of the Revenue and against the assessee. No order as to costs. ;