Samtex Fashions Ltd. Vs CIT (Supreme Court of India)
CBDT Office Memorandum Cannot Override Section 80HHC Statutory Scheme; Export Quota Premium Not Covered by Sections 28(iiia) to 28(iiic); Export Quota Sale Premium Cannot Be Equated with Export Incentives; CBDT Circular Binds Revenue Officers, Not Courts Interpreting Income-tax Law: Supreme Court
Core Issue: Whether premium realised by an assessee on the transfer of export quota could be treated, in accordance with the CBDT Office Memorandum dated 23 February 1998, as export incentive income falling within sections 28(iiia) to 28(iiic) of the Income Tax Act, 1961, and consequently qualify for deduction under section 80HHC; and whether the administrative clarification issued by the CBDT was binding upon the courts while interpreting the statutory provisions.
Facts of the Case
The assessee, M/s. Samtex Fashions Ltd., filed appeals before the Supreme Court arising from the judgment of the Delhi High Court dated 23 May 2017 in ITA Nos. 32 of 2005 and 1057 of 2008, concerning Assessment Years 2000-01 and 2001-02. In the return for AY 2001-02, the assessee declared Rs. 90,43,061 as proceeds from the sale of export quota and Rs. 16,72,286 as interest earned on margin money deposits, and claimed deductions under the Income Tax Act.
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