M/s Anand Concast Ltd., Ludhiana V. ACIT, Ludhiana

ITA 1142/CHANDI/2011

• Counselvise Citation: 114221514 RSA 2011
• Duration Of Justice: 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 30-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Business income; Retrospective amendment; Set aside
• Section: 143(3); 244A; 80HHC; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER ITA NO. 1142/CHD/2011 ASSESSMENT YEAR: 2004-05 M/S ANAND CONCAST LTD., VS THE ACIT, LUDHIANA CIRCLE V, LUDHIANA PAN NO. AABCA2453M (APPELLANT) (RESPONDENT) APPELLANT BY : NONE (WRITTEN SUBMISSIONS) RESPONDENT BY : SHRI N.K. SAINI DATE OF HEARING : 10.01.2012 DATE OF PRONOUNCEMENT : 10.01.2012 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-II, LUDHIANA DATED 12.9.2011 RELATING TO ASS ESSMENT YEAR 2004-05. 2. IN THIS APPEAL, THE ASSESSEE HAS TAKEN THE FOLLO WING GROUNDS:- 1. THAT THE LD. CIT(A)-II HAS ERRED IN NOT FOLLOWING T HE DIRECTION OF THE HON'BLE TRIBUNAL AND HAS THUS EXCE EDED HIS JURISDICTION IN REJECTING THE CLAIM OF THE APPE LLANT IN RESPECT OF DEDUCTION U/S 80HHC ON THE VALUE OF DEPB . 2. THAT THE LD. CIT(A)-II HAS ERRED IN FOLLOWING TH E JUDGMENT OF THE HON'BLE MUMBAI HIGH COURT IN THE CA SE OF KALAPATARU COLOURS AND CHEMICALS IGNORING THE 2 SPECIFIC DIRECTIONS OF THE HON'BLE TRIBUNAL FOR DEC IDING THE ISSUE ON THE BASIS OF SPECIAL BENCH JUDGMENT IN HE CASE OF M/S TOPMAN EXPORTS V ITO. 3. THAT IN ANY CASE THE ORDER PASSED BY THE LD. CIT (A)-II IS AGAINST THE LAW AND FACTS OF THE CASE. 4. THAT THE LD. CIT(A)-II HAS ERRED IN NOT GRANTING RELIEF IN RESPECT OF CHARGING OF INTEREST U/S 234D AND WITHDRAWING OF INTEREST U/S 244A AND MERELY HOLDING THAT THE SAME IS CONSEQUENTIAL IN NATURE. 3. FIRSTLY, WE WILL TAKE UP GROUND NOS. 1 TO 3 OF T HE APPEAL BECAUSE THE SAME ARE INTERLINKED. THE MAIN GRIEVANCE OF THE AS SESSEE AGAINST THE ORDER OF CIT(A)-II, LUDHIANA IS THAT THE CIT(A) WAS NOT JUST IFIED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN REJECTING THE CLA IM OF THE ASSESSEE FOR ALLOWING DEDUCTION U/S 80HHC OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') ON DEPB. IN THE FIRST ROUND OF APPEAL, THE ASSESSING OFFICER AND THE CIT(A) HAD REJECTED THE CLAIM OF THE ASSESSEE AGAIN ST WHICH THE ASSESSEE HAS CAME IN APPEAL BEFORE THE TRIBUNAL AND THE APPEAL W AS DISPOSED OF VIDE CONSOLIDATED ORDER PASSED IN NUMBER OF APPEALS ON 3 1.8.2009 (ASSESSEES APPEAL BEARING NO. ITA NO. 89/CHD/2008). THE ASSES SING OFFICER PASSED ORDER U/S 143(3) READ WITH SECTION 254 OF THE ACT O N 20.12.2010 AND INSTEAD OF FOLLOWING THE DIRECTIONS OF THE TRIBUNAL, DECIDE D THE ISSUE ON THE BASIS OF HON'BLE BOMBAY HIGH COURT JUDGMENT IN THE CASE OF C IT V KALAPATARU COLOURS & CHEMICALS (2010) 328 ITR 451 (BOM). ON A PPEAL, THE CIT(A) HELD AS UNDER:- 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. AR AND THE ASSESSMENT ORDER PASSED BY THE ASSESSING OF FICER. THE LD. AR HAS BASICALLY STRESSED UPON THE FACT THAT TH E ASSESSING OFFICER WAS REQUIRED TO FOLLOW THE DECISION OF THE HON'BLE CHANDIGARH BENCH IN THE CASE OF THE APPELLANT WHERE IN THE 3 DECISION OF THE SPECIAL BENCH OF ITAT IN THE CASE O F M/S TOPMAN EXPORTS HAD BEEN REFERRED. HOWEVER, THE FACT OF TH E MATTER IS THAT THE ABOVE DECISION OF THE SPECIAL BENCH HAS SI NCE BEEN REVERSED BY THE HON'BLE BOMBAY HIGH COURT IN THE CA SE OF CIT V KALAPATRU COLOURS AND CHEMICALS 42 DTR 193 AND THER EAFTER EVEN THE HON'BLE PUNJAB & HARYANA HIGH COURT IN A N UMBER OF CASES WHICH HAVE BEEN MENTIONED BY THE ASSESSING OF FICER IN ITS ASSESSMENT ORDER HAVE HELD THAT THE SAID DECISION O F THE HON'BLE BOMBAY HIGH COURT SHOULD BE CONSIDERED BY THE HON'B LE CHANDIGARH ITAT AND ITS EARLIER DECISION HAS BEEN S ET ASIDE. THUS, UNDER THE CIRCUMSTANCES, THE ACTION OF THE AS SESSING OFFICER IS JUSTIFIED. THOUGH, I AM IN AGREEMENT WI TH THE LD. COUNSEL FOR THE APPELLANT THAT THE HON'BLE CHANDIGA RH BENCH HAS BEEN DIRECTED TO DECIDE THE ISSUE AFRESH ON MER ITS, BUT NEVERTHELESS, THE DECISION OF THE KALAPATARU COLOUR S (SUPRA) WHEREIN IT HAS BEEN CLEARLY DECIDED THAT THE COMPLE TE SALE PROCEEDS OF THE DEPB / DFRC LICENSES IS TO BE CONSI DERED AS PROFITS FOR THE PURPOSE OF COMPUTING DEDUCTION U/S 80HHC. THIS BEING THE LEGAL POSITION, I HAVE NO HESITATION IN U PHOLDING THE ACTION OF THE ASSESSING OFFICER. THEREFORE, THE AS SESSMENT MADE BY THE ASSESSING OFFICER IS IN ORDER AND THE GROUND OF APPEAL OF THE APPELLANT IS HEREBY DISMISSED. 4. IN THIS CASE, THE ASSESSEE HAS SUBMITTED WRITTEN SUBMISSIONS WHEREIN IT IS STATED THAT THE ASSESSING OFFICER HAS EXCEEDED H IS JURISDICTION IN REJECTING THE CLAIM OF THE ASSESSEE. NO APPEAL HAS BEEN FILE D BY THE REVENUE AGAINST THE ORDER OF THE TRIBUNAL IN ASSESSEES CASE WHEREI N SPECIFIC DIRECTIONS WERE GIVEN TO ASSESSING OFFICER TO DECIDE THE ISSUE ON T HE BASIS OF THE SPECIAL BENCH JUDGMENT, THE MATTER STOOD CLOSED AFTER THE D ECISION OF THE TRIBUNAL. ACCORDINGLY, IT WAS SUBMITTED BY THE ASSESSEE THAT THE ORDER OF CIT(A) MAY BE REVERSED. 4 5. WE HAVE ALSO HEARD THE LD. DEPARTMENTAL REPRESEN TATIVE. WE FIND THAT A SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE TH IS BENCH OF THE TRIBUNAL IN THE CASE OF M/S R.N. GUPTA & CO. LTD., LUDHIANA V A CIT, CIRCLE-1, LUDHIANA IN ITA NOS. 926 TO 928/CHD/2011 RELATING TO ASSESSM ENT YEARS 2001-02, 2003- 04 AND 2004-05 WHEREIN THE TRIBUNAL VIDE ITS ORDER DATED 21.11.2011 HELD AS UNDER:- 5. WE HAVE HEARD SMT. JYOTI KUMARI, LD. DR AT LEN GTH AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD . 6. THE ISSUE ARISING IN THESE APPEALS RELATES TO CO MPUTATION OF DEDUCTION U/S 80HHC OF THE INCOME TAX ACT ON ACC OUNT OF INCOME BY WAY OF DUTY ENTITLEMENT PASS BOOK (DEPB). THE ISSUE WAS DECIDED BY THE CHANDIGARH BENCH OF THE TR IBUNAL VIDE ORDER DATED 31.8.2009 FOLLOWING THE DECISION OF A S PECIAL BENCH OF MUMBAI TRIBUNAL IN M/S TOPMAN EXPORTS V ITO (200 9) 29 DTR 153 (MUMBAI) AND THE MATTER WAS REMANDED BACK T O THE FILE OF ASSESSING OFFICER TO ADJUDICATE AFRESH IN CONFOR MITY WITH THE AFORESAID DECISION OF THE SPECIAL BENCH OF THE TRIB UNAL. IT IS PERTINENT TO MENTION HERE THAT RECENTLY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V F.C.SONDHI AND CO. P. LTD (2011) 334 ITR 141 (P&H) VIDE ITS JUDGMENT DATE D 16.8.2010, IN RESPECT OF ISSUE RAISED WITH REGARD T O TREATMENT OF RECEIPTS OF DEPB AND DFRC ENTITLEMENT AND DEDUCTION ALLOWABLE ON SUCH RECEIPTS U/S 80HHC OBSERVED AFTER HEARING THE RIVAL CONTENTIONS OF THE PARTIES THAT THE VIEW TAKE N BY MUMBAI BENCH IN THE CASE OF M/S TOPMAN EXPORTS V ITO (SUPR A) AND M/S KALPATARU CHEMICALS V ACIT (ITA NO. 5769/MUM/2006 AND 5851/MUM/2006 ORDER DATED 11.8.2009, HAS BEEN REVER SED BY THE HON'BLE BOMBAY HIGH COURT IN CIT V KALAPATARU COLOU R & CHEMICAL (2010) 328 ITR 451 (BOM). THE HON'BLE PUNJ AB & HARYANA HIGH COURT HELD AS UNDER:- 6. AFTER HEARING LEARNED COUNSEL FOR THE PARTIES, WE ARE IN AGREEMENT WITH THE VIEW TAKEN BY THE BOMBAY HIGH COURT AND ARE OF THE VIEW THAT THE INCOME FROM DBK, DEPB AND DFRC HAS TO BE TREATED AS BUSINESS INCOME AND HAS TO BE TAKEN INTO ACCOUNT FOR DEDUCTION UNDE R SECTION 80HHC. THE QUESTIONS PROPOSED ARE ANSWERED ACCORDINGLY AND MATTER IS REMANDED TO THE ITAT FOR FRESH DECISION IN ACCORDANCE WITH LAW. 5 7. WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FA VOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE ITAT CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF M/S FITEX INDUSTRIES V ACIT-V, LUDHIANA & OTHERS IN ITA NO. 9 56/CHAD/2006 RELATING TO ASSESSMENT YEARS 2003-04 AND OTHERS. T HE TRIBUNAL VIDE ITS ORDER DATED 30.6.2011 AFTER KEEPING IN VIEW OF THE OBSERVATIONS AND THE DIRECTIONS OF THE HON'BLE HIGH COURT IN THE CASE OF CIT VS F.C.SONDHI AND CO P.LTD (2011) (2011) 334 ITR 141 ( P&H) AND FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V KALAPATRU COLOURS AND CHEMICAL (2 010) 328 ITR 451 (BOM), WHEREBY THE HON'BLE BOMBAY HIGH COURT RE VERSED THE ORDERS OF ITAT, MUMBAI SPECIAL BENCH IN THE CASE OF M/S TOPMAN EXPORTS IN ITA NO. 5769/MUM/2006 AND IN THE CASE OF M/S KALPATARU CHEMICALS V ACIT (ITA NO. 5815/MUMBAI/20 06 ORDER DATED 11.8.2009, HELD AS UNDER:- 45. WE FIND NO MERIT IN THE SAID CONTENTION OF THE LEARNED A.R. FOR THE ASSESSEE AS THE HON'BLE BOMBAY HIGH COURT IN KALAPTARU COLOURS & CHEMICALS(SUPRA) VIDE PARA 32 HAD REFERRED TO THE SPEECH MADE BY THE FINANCE MINISTER WHILE INTRODUCING THE SAID AMENDME NT IN 2005 AND HAD ALSO CONSIDERED THE REASONS FOR THE INTRODUCTION OF CLAUSE (IIID) IN SECTION 28 OF THE ACT IN VIEW OF THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF P& G ENTERPRISES (93 ITD 138) (DEL) AND HAD OBSERVED AS UNDER : 32. THE TRIBUNAL HAS RELIED TO A CONSIDERABLE EXTE NT ON A SPEECH MADE BY THE THEN FINANCE MINISTER ON TH E FLOOR OF PARLIAMENT IN SUPPORT OF ITS CONCLUSION TH AT ONLY THE PREMIUM REALIZED BY AN EXPORTER ON THE SAL E OF THE DEPB CREDIT WOULD FALL WITHIN THE PURVIEW OF CLAUSE (IIID) OF SECTION 28 AND NOT THE FACE VALUE OF THE DEPB. THE ENTIRE APPROACH OF THE TRIBUNAL IS WITH RESPECT MISCONCEIVED AND UNSUSTAINABLE. THE FINANCE MINISTER SOUGHT TO INTRODUCE CLAUSE (IIID) IN SECTI ON 28 IN VIEW OF THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF P & G ENTERPRISES [2005] 93 ITD 138 (DELHI). THE DISPUTE IN THAT CASE RELATED T O TAXING THE ENTIRE AMOUNT RECEIVED ON THE TRANSFER O F THE DEPB CREDIT AND NOT THE AMOUNT THAT WAS RECEIVE D IN EXCESS OF THE FACE VALUE OF THE DEPB CREDIT. AS A MATTER OF FACT IN THAT CASE THE ASSESSEE HAD CLAIME D THAT THE ENTIRE RECEIPT ON THE TRANSFER OF THE DEPB CREDIT INCLUDING THE FACE VALUE OF THE CREDIT AS PR OFITS UNDER SECTION 28(IIIA). THE TRIBUNAL IN THAT CASE H ELD THAT THE ENTIRETY OF THE AMOUNT WOULD BE COVERED BY SECTION 28(IV). HOWEVER, THE VIEW OF THE TRIBUNAL W AS THAT SINCE EXPLANATION (BAA) IN SECTION 80HHC DID N OT ENVISAGE THE EXCLUSION OF PROFITS COVERED BY SECTIO N 28(IV), SUCH PROFITS COULD NOT BE EXCLUDED WHILE 6 COMPUTING THE DEDUCTION UNDER SECTION 80HHC. HENCE, THERE WAS NO DISPUTE IN CONSIDERING THE ENTIRETY OF THE RECEIPTS ON THE TRANSFER OF THE DEPB CREDIT AS PROF ITS OF BUSINESS. THE DISPUTE WAS ONLY IN NOT TREATING T HE RECEIPTS BY WAY OF TRANSFER OF THE DEPB CREDIT AS EXPORT RECEIPTS WHILE COMPUTING THE DEDUCTION UNDER SECTION 80HHC. CONSEQUENTLY, THE ENTIRETY OF THE RECEIPTS ON THE TRANSFER OF THE DEPB CREDIT WHICH W AS SOUGHT TO BE INCLUDED IN SECTION 28(IV) WAS BROUGHT IN BY PARLIAMENTARY AMENDMENT IN THE FORM OF AN INSERTION OF CLAUSE (IIID) IN SECTION 28 WITH RETROSPECTIVE EFFECT. THERE WAS NO CONTROVERSY REGARDING THE TAXABILITY OF THE QUANTUM OF RECEIPTS ON THE TRANSFER OF THE DEPB CREDIT. HENCE, FOR THESE REASONS WE ARE OF THE VIEW THAT IT CANNOT BE INFERR ED FROM THE SPEECH OF THE FINANCE MINISTER THAT THE INSERTION OF CLAUSE (IIID) IN SECTION 28 WAS MADE W ITH A VIEW TO TAX ONLY THE AMOUNT WHICH HAS BEEN RECEIV ED IN EXCESS OF THE FACE VALUE OF THE DEPB CREDIT. 46. THE HON'BLE COURT FURTHER HELD AS UNDER : 33. THE SUBMISSION THAT PRIOR TO THE INSERTION OF CLAUSE (IIID) IN SECTION 28, THE FACE VALUE OF THE DEPB CREDIT REALIZED ON THE TRANSFER OF SUCH CREDIT CONSTITUTED EXPORT PROFITS, BUT NOT THE AMOUNT REAL IZED IN EXCESS OF THE FACE VALUE OF THE DEPB IS SIMILARL Y WITHOUT ANY BASIS. THIS IS BECAUSE (I) THE OBJECT O F THE DEPB WAS TO FURNISH AN INCENTIVE TO EXPORTERS SO AS TO ADJUST THE CREDIT AGAINST THE CUSTOMS DUTY PAYABLE ON ANY GOODS IMPORTED INTO INDIA. HOWEVER, WHERE AN EXPORTER INSTEAD OF UTILIZING THE CREDIT TRANSFERS THE CREDIT AT A PREMIUM, IT CANNOT BE SAID THAT THE EXPORTER HAS UTILIZED THE CREDIT ; (II) THE LEGISLA TURE CONSIDERS THAT THE CUSTOMS DUTY AND EXCISE DUTY PAI D ON RAW MATERIALS USED IN THE EXPORT PRODUCT, WHEN REPAID OR REPAYABLE AS DUTY DRAWBACK, WOULD NOT CONSTITUTE EXPORT PROFIT. SIMILARLY, WHEN THE DEPB CREDIT IS NOT UTILIZED IN THE BUSINESS BUT IS TRANS FERRED FOR VALUE, THE AMOUNT RECEIVED ON THE TRANSFER WOUL D BE BUSINESS PROFITS AND NOT EXPORT PROFITS IRRESPEC TIVE OF WHETHER THE AMOUNT WHICH IS REALIZED IS EQUAL TO , LARGER THAN OR LESS THAN THE FACE VALUE OF THE DEPB CREDIT. PARLIAMENT HAS CONSIDERED THAT THE ENTIRETY OF THE AMOUNT RECEIVED ON THE TRANSFER OF THE DEPB SHA LL CONSTITUTE PROFITS OF BUSINESS UNDER SECTION 28(III D). SINCE SUCH PROFITS ARE NOT EXPORT PROFITS PARLIAMEN T DIRECTED THAT NINETY PER CENT. OF THOSE PROFITS WOU LD BE EXCLUDED WHILE COMPUTING THE DEDUCTION UNDER SECTIO N 80HHC ; (III) PARLIAMENT CONSIDERED THAT AN EXPORTE R 7 WHO INSTEAD OF UTILIZING THE DEPB CREDIT FOR PAYING CUSTOMS DUTY ON IMPORTED GOODS, MAKES A PROFIT BY TRANSFERRING THE DEPB, WOULD FORM A SEPARATE CLASS AND SEEKS TO TAX THE RECEIPTS ON THE TRANSFER OF TH E DEPB CREDIT AS BUSINESS PROFITS AND NOT EXPORT PROF ITS. EXPORTERS WHO TRANSFER THE DEPB CREDIT AND MAKE A PROFIT CANNOT BE PLACED ON PAR WITH THOSE EXPORTERS WHO UTILIZE THE CREDIT FOR PAYING THE CUSTOMS DUTY ON THE IMPORTED GOODS ; (IV) THE FACT THAT PARLIAMENT DID NOT CONSIDER THE AMOUNT RECEIVED ON THE TRANSFER OF THE DEPB TO BE EXPORT PROFIT CANNOT BE A GROUND TO HOLD THAT THE RECEIPTS ON THE TRANSFER OF DEPB CREDIT AR E NOT BUSINESS PROFITS. COUNSEL APPEARING ON BEHALF O F THE ASSESSEE SUBMITS THAT THE ENTIRE AMOUNT RECEIVE D ON THE TRANSFER OF THE DEPB CREDIT IS BUSINESS PROF IT, BUT IT WAS CONTENDED THAT WHAT IS INCLUDED IN SECT ION 28(IIID) IS THE AMOUNT RECEIVED ON THE TRANSFER OF THE DEPB CREDIT IN EXCESS OF THE FACE VALUE OF THE DEPB AND THE AMOUNT RECEIVED TO THE EXTENT OF THE FACE V ALUE OF THE DEPB WOULD BE COVERED UNDER SECTION 28(IIIB) . THERE IS NO MERIT IN THIS CONTENTION BECAUSE (A) TH E DEPB CREDIT WAS NOT IN EXISTENCE WHEN SECTION 28(II IB) WAS INSERTED BY THE FINANCE ACT OF 1990. DEPB CREDI T WAS INTRODUCED WITH EFFECT FROM APRIL 1, 1997 WHICH WAS AFTER THE INSERTION OF CLAUSE (IIIB) IN SECTION 28 ; (B) SECTION 28(IIIB) REFERS TO CASH ASSISTANCE (BY WHATEVER NAME CALLED) RECEIVED BY THE ASSESSEE FROM THE GOVERNMENT PURSUANT TO A SCHEME OF THE GOVERNMENT. THE AMOUNT RECEIVED ON THE TRANSFER OF THE DEPB CREDIT IS NOT RECEIVED BY THE ASSESSEE FRO M THE GOVERNMENT PURSUANT TO A SCHEME OF THE GOVERNMENT WITHIN THE MEANING OF CLAUSE (IIIC) ; AN D (C) WHEN SECTION 28(IIID) SPECIFICALLY DEALS WITH P ROFITS REALIZED ON THE TRANSFER OF THE DEPB CREDIT, IT WOU LD BE IMPERMISSIBLE AS A MATTER OF FIRST PRINCIPLE TO BIFURCATE THE FACE VALUE OF THE DEPB AND THE AMOUNT RECEIVED IN EXCESS OF THE FACE VALUE OF THE DEPB. 47. RESPECTFULLY FOLLOWING THE ABOVESAID RATIO LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN KALAPTARU COLOURS & CHEMICALS(SUPRA) WE FIND NO MERIT IN THE STAND OF THE ASSESSEE THAT DEPB CREDIT HAS A FACE V ALUE AND WHILE DETERMINING THE PROFITS ELIGIBLE FOR DEDU CTION UNDER SECTION 80HHC OF THE ACT, ONLY THE PROFITS AR ISING ON THE TRANSFER OF DEPB CREDIT ARE TO BE EXCLUDED. AS OBSERVED BY US IN PARA 42 ABOVE THE DEPB CREDIT BEI NG AN EXPORT INCENTIVE RECEIVED BY THE ASSESSEE IN PROPORTION TO THE FOB VALUE OF ITS EXPORT HAS NO FA CE VALUE AND THE AMOUNT RECEIVED ON ITS TRANSFER IS TO BE CONSIDERED WHILE COMPUTING THE PROFITS ALLOWABLE FO R 8 DEDUCTION UNDER SECTION 80HHC OF THE ACT. ADMITTED LY, IN THE CASE OF THE ASSESSEES BEFORE US THE TURNOVER EXCEEDS RS.10 CRORES AND THE PROVISIONS OF THIRD PR OVISO TO SUB-SECTION (3) OF SECTION 80HHC OF THE ACT ARE APPLICABLE AND THE ASSESSEE HAVING NOT FULFILLED TH E CONDITIONS LAID DOWN UNDER THE SAID PROVISO, THE TO TAL AMOUNT RECEIVED ON TRANSFER OF DEPB CREDIT IS TO BE EXCLUDED FROM THE PROFITS ELIGIBLE FOR DEDUCTION UN DER SECTION 80HHC OF THE ACT. HOWEVER, THE AMOUNT RECEIVED BY THE ASSESSEE ON THE TRANSFER OF DEPB CR EDIT IS INCLUDIBLE AS BUSINESS PROFIT IN THE HANDS OF TH E ASSESSEE UNDER SECTION 28(IIID) OF THE ACT. 8. RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA), WE DO NOT FIND ANY MERIT IN THE APPEALS. 9. VIDE GROUND NO.1 OF THE APPEAL, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE CIT(A) AS WELL AS THAT OF ASSESSING OFFICER IN NOT FOLLOWING THE DIRECTIONS OF THE TRIB UNAL DATED 31.8.2009 WHEREIN THE TRIBUNAL DIRECTED THE ASSESSI NG OFFICER TO FOLLOW THE DECISION OF ITAT MUMBAI SPECIAL BENCH I N THE CASE OF TOPMAN EXPORTS V ITO-14(2) AND IN ITA NO. 5769/MUM/ 2006 AND IN THE CASE OF KALAPATRU COLOURS & CHEMICALS, MUMBA I VS ADDL. CIT 13(2) MUMBAI IN ITA NO. 5851/MUM/2006, ORDER DA TED 11.8.2009. IT IS OBSERVED THAT THE BASIS ON WHICH THE TRIBUNAL, ITAT CHANDIGARH HAS SET ASIDE THE ISSUE TO THE ASS ESSING OFFICER HAS BEEN REVERSED BY THE HON'BLE BOMBAY HIGH COURT AND ON SIMILAR LINES, THE HON'BLE PUNJAB & HARYANA HIGH CO URT REMANDED A SIMILAR ISSUE TO ITAT, CHANDIGARH FOR FRESH ADJUD ICATION IN ACCORDANCE WITH LAW, AND THEREFORE, THE DECISION TO DECIDE THE CASE AS PER LAW DULY VESTED IN THE ASSESSING OFFICE R. IT IS NOT THAT THE ASSESSING OFFICER PROCEEDED TO DISALLOW THE CLA IM OF THE ASSESSEE ON ENTIRELY DIFFERENT GROUNDS. IN FACT, T HE ASSESSING OFFICER HAS ONLY APPLIED LAW AS IT EXISTED ON THE D ATE OF PASSING THE ASSESSMENT ORDER. THEREFORE, WE DO NOT FIND ANY MERIT IN THE ABOVE GROUND. 6. THE ISSUE RAISED BY THE ASSESSEE AND THE FACTS O F THE CASE ARE SIMILAR TO THAT OF M/S R.N.GUPTA & CO LTD., LUDHIANA (SUPRA), WE DO NOT FIND ANY MERIT IN GROUND NOS. 1 TO 3 OF THE APPEAL. ACCORDINGLY, WE DISMISS THE SAME. 7. AS REGARDS GROUND NO.4, WHICH RELATES TO CHARGIN G OF INTEREST U/S 234D OF THE ACT, THE ASSESSEE SUBMITTED THAT INTEREST IS NOT CHARGEABLE IN 9 RE-ASSESSMENT PROCEEDINGS AS HELD BY VISAKHAPANAM B ENCH OF THE TRIBUNAL IN THE CASE OF DREDGING CORPORATION OF INDIA LTD V ACI T REPORTED IN (2011) 142 TTJ (VISAKHA) 252. IT IS ALSO SUBMITTED IN THE WRI TTEN SUBMISSIONS BY THE ASSESSEE THAT INTEREST U/S 234D IS ALSO NOT CHARGEA BLE IN ORDER U/S 143(3) READ WITH SECTION 254 OF THE ACT, WHICH IS AN ORDER ONLY TO GIVE EFFECT TO THE TRIBUNALS DIRECTIONS. 8. AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMSTA NCES OF THE PRESENT CASE, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSE SSING OFFICER WITH A DIRECTION TO DECIDE THE SAME AFRESH KEEPING IN VIEW THE SUBMI SSIONS OF THE ASSESSEE MADE HEREIN ABOVE. 9. IN THE RESULT, APPEAL IS ALLOWED PARTLY FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF JANUARY, 2012. SD/- SD/- (D.K.SRIVASTAVA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 10 TH JANUARY, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR