| Case ID |
2150c9cc-b049-4012-bb08-9644fb251014 |
| Body |
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| Case Number |
IT REFERRED CASE No. 66 OF 1966 |
| Decision Date |
Aug 30, 1967 |
| Hearing Date |
|
| Decision |
The Kerala High Court ruled against the assessee, concluding that the profits earned by the assessee as commission for services rendered were not derived from the export of goods, specifically tea, but rather from the agency services provided. The court asserted that under Section 2(5)(i) of the Finance Act, 1963, the definition of profits and gains from export should include only the excess of the export price over the total cost incurred by the exporter. As the commission earned was not directly linked to the act of exporting tea from India, the assessee was not entitled to the rebate claimed. The decision emphasized the need to distinguish between earnings from export activities and those from agency services, thereby clarifying the interpretation of the law concerning export rebates. |
| Summary |
This case revolves around the interpretation of the Finance Act, 1963, specifically Section 2(5)(i), which addresses rebates on profits derived from exports. The assessee, Saraf Trading Corpn, entered into an agreement to purchase tea for foreign buyers and claimed entitlement to a rebate based on the commission earned. The Kerala High Court examined the nature of the commission in relation to the export of goods and determined that the commission was derived from services rendered rather than from the export of tea itself. The court's decision underscores the importance of correctly identifying the source of income in tax matters, particularly in relation to export rebates. This case serves as a crucial reference point for understanding the application of tax laws in the context of agency agreements and export transactions. |
| Court |
Kerala High Court
|
| Entities Involved |
Not available
|
| Judges |
M.S. Menon, C.J.,
P. Govindan Nair, J
|
| Lawyers |
C.T. Peter for the Appellant,
C.K. Viswanatha Iyer,
M.A.T. Pai for the Respondent
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Saraf Trading Corpn
|
| Citations |
1968 SLD 274,
(1968) 69 ITR 62
|
| Other Citations |
CIT v. Kamakhaya Narayan Singh [1948] 16 ITR. 325 (PC),
Federal Commissioner of Taxation v. Clarke [1927] 40 C.L.R. 246
|
| Laws Involved |
Finance Act, 1963
|
| Sections |
2(5)(i)
|