D.D. International Pvt. Ltd. Vs CIT (Punjab and Haryana High Court)
The Punjab and Haryana High Court examined whether the absence of a consolidated Bank Realization Certificate (BRC) could justify denial of deduction under Section 80HHC of the Income Tax Act, 1961, in respect of export profits linked to the Duty Entitlement Passbook (DEPB) Scheme. The assessee’s entitlement under Section 80HHC(3) for exporters with turnover exceeding ₹10 crore was undisputed, having been settled by the Supreme Court. The controversy was limited to the requirement of BRCs for export proceeds amounting to about ₹201 crore.
The revenue authorities denied the deduction on the ground that the assessee had not furnished bank certificates for the exports. The assessee contended that it had submitted consignment-wise BRCs to the Directorate General of Foreign Trade as well as to the income-tax authorities and that there was no statutory requirement for a consolidated BRC. The Court observed that banks issue BRCs consignment-wise and not in a consolidated form, and therefore an assessee cannot be denied deduction merely for not producing a consolidated certificate.
Accordingly, the Court directed the Assessing Officer to re-examine the records. If consignment-wise BRCs were already available, the demand was to be dropped. If not, the assessee was to be given an opportunity to furnish the same within two months, after which the Assessing Officer was to pass an appropriate order within one month. The appeal was disposed of with these directions.
