Commissioner of Income Tax vs Jewels Emporium

On a reference u/s 256(2) of the Income Tax Act, 1961, the Income Tax Appellant Tribunal, Jaipur has referred the following question for our opinion

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in treating sales made to foreign visitors at the assessee''s counter located in India as export sales for the purpose of allowing deduction u/s 80HHC?"

At the outset, learned counsel appearing for the revenue has fairly admitted that the issue is directly covered by the decision of the Apex Court in the case of CIT v. Silver & Arts Palace (Civil Appeal No. 4478 of 2001, dated 18-12-2002) wherein their Lordships have taken a view that any sale of an article on counter-shop, emporium or other establishment situated in India against foreign currency and if ultimately that article has been taken out of India, the assessee is entitled to the special deduction u/s 80HHC.

Following the view taken by the Apex Court, we answer the reference in affirmative in favour of the assessee and against the revenue.

The reference application stands disposed of.