By K. B. Bhujle, Advocate
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The assessee engaged in the business of hotelier supplied food and beverages in sealed containers to international flights leaving India. Such foods and beverages were cleared for transmission to the aircrafts and were also escorted by the Customs authorities at international airports. The Assessing Officer disallowed the claim for deduction u/s.80HHC of the Income-tax Act, 1961. The disallowance was upheld by the Tribunal.
On appeal by the assessee, it was contended by the Revenue that the assessee had charged sales tax on those items of food and beverages from the airline authority and such conduct itself indicates that the transactions were sales of items within the country. The Calcutta High Court reversed the decision of the Tribunal and held as under:
“(i) Though the word ‘export’ has not been defined in the Act, the word is to be interpreted in the light of the language of section 80HHC including the Explanation added thereto and if the formalities required in section 80HHC are fully complied with, it is not necessary that all the other formalities prescribed under the Customs Act, 1962, for export of the articles also required to be fully complied with by an assessee in addition to those prescribed u/s.80HHC.
(ii) There is no estoppel for the mistake of an assessee in treating the actual nature of transaction and the taxing authority cannot refuse to give appropriate benefit of deduction of tax merely for the mistake of an assessee if the mistake is lawfully rectified. If the assessee had wrongly realised sales tax on the item of export by treating the sale as within the State, the law would take its own course for such wrong action of the assessee, but such fact could not be a ground for refusing a just benefit available under the Act.
(iii) The certificate issued by the Commissioner of Customs indicated that the assessee in the process of selling the food and beverages in the airport had complied with the conditions mentioned in Explanation (aa) of section 80HHC. The Foreign Exchange Department, RBI certified that the provisions regarding treatment of the amounts received in rupees by a hotel company out of repatriable funds would also apply under the Foreign Exchange Management Regulations. In the absence of any evidence disputing the assertion of the officer concerned, the assessee had also complied with in condition mentioned in Explanation (a) and (aa) of section 80HHC of the Act.
