M/s Tea promoters (India) Pvt. Ltd., Kolkata V. ACIT, Circle-4, Kolkata, Kolkata

ITA 2442/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6313 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 28-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALLONG YADEN ADD L
• Assessee Lawyers: MRS ARATI DEBNATH
• Keywords: Business income; Competent authority
• Section: 80HHC; 14A; 10B; 10

Judgement Text

1 ITA NO.2442/KOL/2016 M/S TEA PROMOTER (INDIA) (P)LT D. A.Y.2002-03 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOL KATA [BEFORE HONBLE SHRI S.S. GODARA, JM & SHRI M.BAL AGANESH, AM ] ITA NO.2442/KOL/2016 ASSESSMENT YEAR : 2002-03 M/S TEA PROMOTERS (INDIA) (P)LTD. -VERSUS- A.C.I. T., CIRCLE-IV, KOLKATA KOLKATA (PAN:AABCT 0260 H) (RESPONDENT) FOR THE APPELLANT: MRS. ARATI DEBNATH, CA FOR THE RESPONDENT: SHRI SALLONG YADEN,ADDL. CIT DATE OF HEARING : 02.05.2018. DATE OF PRONOUNCEMENT : 09.05.2018. ORDER PER S.S. GODARA, JM: 1. THIS ASSESSEES APPEAL FOR A.Y.2002-03 ARISES F ROM THE CIT(A)-IV, KOLKATAS ORDER DATED 06.12.2013, PASSED IN APPEAL NO.24/CIT( A)-IV/2005-06, CONFIRMING ASSESSING OFFICERS ACTION INTER-ALIA DISALLOWING I TS DEDUCTION CLAIM U/S 10B OF THE ACT ON ACCOUNT OF FOREIGN EXCHANGE FLUCTUATION, PRO FITS DERIVED FROM SALE OF IMPORT LICENSE AND INTEREST INCOME TO THE TUNE OF RS.20,95 ,814, RS.7,34,634/- AND RS.23,13,606/-; RESPECTIVELY, IN PROCEEDINGS U/S 1 43(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. IT EMERGES AT THE OUTSET THAT THE ASSESSEES IN STANT APPEAL SUFFERS FROM 985 DAYS DELAY IN FILING. LEARNED COUNSEL TAKES US TO ASSESSEES CONDONATION PETITION WITH ITS SUPPORTIVE AFFIDAVIT DATED 27.12.2016 ATTR IBUTING THE MAIN CAUSE THEREOF TO BE THE FACT THAT THE CIT(A) HAD DECIDED ITS OTHER APPE AL IN SECTION 147/148 PROCEEDINGS RAISING THE VERY ISSUES ON 18.03.2013. IT PREFERRED ITA NO.1841/KOL/2013 AGAINST THE SAME WELL WITHIN TIME. A CO-ORDINATE BENCH QUASHED THE REOPENING UNDER CHALLENGE THEREIN IN ITS ORDER DT 18.11.2016 WITHOUT DECIDING THE THREE VERY ISSUES ON MERITS. THERE IS NO DISPUTE THAT THE CIT(A) HAS AFFIRMED A LL THE THREE IMPUGNED DISALLOWANCES BY PLACING RELIANCE ON HIS SAID ORDER DATED 18.03.2013 ONLY. IT 2 ITA NO.2442/KOL/2016 M/S TEA PROMOTER (INDIA) (P)LT D. A.Y.2002-03 THEREFORE TRANSPIRES THAT ALL THREE IMPUGNED ISSUE S ON MERITS REMAIN UNADJUDICATED. THIS SEEMS TO BE THE MAIN REASON FOR THE ASSESSEE T O HAVE FILED THE INSTANT APPEAL AFTER A LAPSE OF 985 DAYS. LEARNED DEPARTMENTAL REPRESENT ATIVE ARGUED THAT THE IMPUGNED DELAY IS NOT SUFFICIENTLY EXPLAINED SO AS TO BE CON DONED. WE FIND NO MERIT IN REVENUES STAND SINCE THE ASSESSEE HAD BEEN PURSUIN G ITS REMEDY QUA THE VERY ISSUES BEFORE THIS TRIBUNAL AS INDICATED HEREINABOVE. WE T HUS FIND IT A FIT CASE TO CONDONE THE IMPUGNED DELAY SINCE THE SAME IS NEITHER INTENTIONA L NOR DELIBERATE ON ASSESSEES PART. THE ASSESSEES APPEAL IS THEREFORE TAKEN UP FOR ADJ UDICATION ON MERITS. HEARD BOTH PARTIES VEHEMENTLY ARGUED THEIR RESPECT IVE STANDS AGAINST AND IN SUPPORT OF DISALLOWANCE(S) . CASE FILE PERUSED. 4. THE FIRST DISALLOWANCE UNDER CHALLENGE IN THE IN STANT APPEAL IS ON ACCOUNT OF FOREIGN EXCHANGE FLUCTUATION GAIN OF RS.20,95,814/- . THIS ASSESSEE IS HAVING 100% EXPORT ORIENTED BUSINESS UNIT. THE IMPUGNED FOREI GN EXCHANGE FLUCTUATION GAIN HAD ARISEN FROM DIFFERENCE IN EXCHANGE RATE AT THE TIME OF BOOKING OF THE EXPORT FOLLOWED BY ITS REALISATION. WE NOTE THAT THE HONBLE GUJARA T HIGH COURT IN CASE 2017(12) TMI 814 PRINCIPAL CIT VS ASAHI SONGWON COLORS LIMITED H AS DELETED A SIMILAR DISALLOWANCE BY TERMING CORRESPONDING GAIN TO BE BU SINESS INCOME ONLY BY FOLLOWING ITS EARLIER ORDER IN CIT VS PRIYANKA GEMS [2014] 36 7 ITR 575 . THERE IS NO LEGAL OR FACTUAL EXCEPTION POINTED DURING THE COURSE OF HEAR ING AT THE REVENUES BEHEST. WE THEREFORE SEE NO MERIT IN THE IMPUGNED DISALLOWANCE . THE SAME STANDS DELETED. 5. THE ASSESSEES SECOND GRIEVANCE CHALLENGES BOTH THE LOWER AUTHORITIES ACTION DISALLOWING ITS 10B DEDUCTION OF RS.7,34,634/- ON A CCOUNT OF PROFIT ON SALE OF IMPORT LICENCE. BOTH THE LOWER AUTHORITIES ARE OF THE VIEW THAT SUCH AN INCOME CANNOT BE HELD TO HAVE BEEN DERIVED FROM THE EXPORT ORIENTED UNIT IN QUESTION. WE NOTICE HEREIN AS WELL THAT THIS TRIBUNAL COORDINATE BENCH IN ITA NO S. 1517 TO 1519/KOL/2014 DCIT VS NARENDRA TEA COMPANY (P) LTD DECIDED ON 24.05.2017 HAS ADJUDICATED THE VERY ISSUE AGAINST THE REVENUE WITH THE FOLLOWING DETAILED DIS CUSSION : 3 ITA NO.2442/KOL/2016 M/S TEA PROMOTER (INDIA) (P)LT D. A.Y.2002-03 8. GROUND NO. 3 FOR AY 2011-12 READS AS UNDER: 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), SILIGURI WAS JUSTIFIED IN LAW, IN TREATING THE PROFIT FROM SALE OF DEPB LICENSE AS INCOME FROM REGULAR BUSINESS AND ELIGIBLE FOR EXEMPTION U/S. 10A/10AA. 9. THE FACTS AS NOTED BY THE LD. CIT(A) IS AS UNDER: 4. SALE OF DEPB LICENCES- IN THE AY 2011-12, THE A SSESSEE HAD SOLD DEPB LICENCES FOR RS.60,75,499. THE AO HELD THAT THE INCOME FROM SALE OF DEPB LICENCES IS NOT THE INCOME FROM THE REGULAR BUSINESS AND HENCE, NOT ELIGIBLE FOR EX EMPTION U/S 10A/10AA. THE ASSESSEE SUBMITTED THAT THE DEPB LICENCES ARE AN INCENTIVE G IVEN TO EXPORTERS TO NEUTRALIZE THE INCIDENTS OF CUSTOM DUTY ON THE IMPORT. SINCE THE ASSESSEE DO ES NOT IMPORT ANY RAW MATERIAL/EQUIPMENT FOR HIS BUSINESS OF EXPORT, THE DEPB LICENSES WERE SOLD TO IMPORTERS TO EARN PROFIT. IF THE ASSESSEE HAD USED THESE DEPB LICENCES FOR IMPORT OF CERTAIN GOODS, BENEFIT WOULD HAVE ACCRUED TO THE ASSESSEE BY WAY OF REDUCTION IN THE CUSTOM D UTY PAYMENT. IN BOTH SITUATIONS THERE IS AN INCREASE IN THE TRADING PROFIT. THERE IS NO DIFFERENCE IN SITUATION S WHEN DEPB LICENSE IS USED FOR IMPORT OR SOLD IN THE OPEN MARKET. THEREFORE, THE ASSESSEE SUBMITT ED THAT THE INCOME FROM THE SALE OF DEPB LICENCES IS AN INTEGRAL PART OF THE BUSINESS OF THE ASSESSEE AND THE INCOME THEREFROM IS THE REGULAR BUSINESS INCOME OF THE ASSESSEE. THE ASSESS EE CITED THE JUDGEMENT OF HONOURABLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS VS CIT (2012) 342 ITR 49 (SE) WHEREIN IT HAS BEEN HELD BY THE HONOURABLE SUPREME COURT THAT THE INCOM E FROM SALE OF DEPB LICENCES IS THE INCOME FROM REGULAR BUSINESS AND IS ELIGIBLE FOR EX EMPTION U/S 80HHC. CONCLUSION- 5.1 EXEMPTION U/S 10A/10AA- THE HONOURABLE ITAT HAS DECIDED IN THE CASE OF THE ASSESSEE FOR THE AY 2004-05 TO 2007-08 THAT THE BUSINESS OF BLEN DING OF TEA FOR EXPORT IS ELIGIBLE FOR EXEMPTION U/S 10A/10AA. AS THERE ARE NO CHANGES IN THE FACTS OF THE CASE AND LEGAL PROVISIONS, THE AO IS DIRECTED TO ALLOW EXEMPTION U/S 10A/10AA FOR THE AYS 2009-10, 2010-11 AND 2011- 12. 5.2 DISALLOWANCES U/S 14A- FOR AYS 2009-10 & 2010-1 1, THE AO HAD MADE DISALLOWANCE U/S 14A AND THE ASSESSEE HAS NOT AGITATED THESE DISALLO WANCES. HOWEVER, FOR AY 2011-12, THE ASSESSEE HAS TAKEN IT AS A GROUND OF APPEAL. THE AS SESSEE DID NOT PRESS THIS GROUND IN THE APPELLATE PROCEEDINGS. THESE DISALLOWANCES ARE, THE REFORE, CONFIRMED AND THE GROUNDS DEALING WITH THESE ARE DISMISSED. 5.3. SALE OF DEPB LICENSES- DEPB LICENSES ARE ISSUE D TO THE EXPORTERS AS INCENTIVE TO THEM FOR IMPORT OF GOODS BY REDUCING CUSTOM DUTY TO CERTAIN EXTENT. IN THIS CASE, THE ASSESSEE IS PROCURING ALL RAW MATERIALS DOMESTICALLY; SO HE SOL D THE LICENCES TO OTHERS TO EARN A PROFIT. IF THESE LICENCES WERE UTILIZED FOR IMPORT OF GOODS BY THE ASSESSEE THEN THE PROFIT OF THE ASSESSEE WOULD HAVE INCREASED. IN THAT CASE THE INCOME WOULD HAVE BEEN DIRECTLY ATTRIBUTABLE TO THE REGULAR BUSINESS OF THE ASSESSEE. THEREFORE, THE I NCOME FROM THE SALE OF THE DEPB LICENCES IS ALSO ESSENTIALLY THE INCOME FROM REGULAR BUSINESS. THIS HAS BEEN UPHELD BY THE HONOURABLE SUPREME COURT ALSO IN THE CASE CITED BY THE ASSESSE E. THE AO IS DIRECTED TO TREAT THE INCOME FROM SALE OF DEPB LICENCES AS INCOME FROM REGULAR B USINESS FOR CALCULATION OF EXEMPTION U/S 10A/10AA. 4 ITA NO.2442/KOL/2016 M/S TEA PROMOTER (INDIA) (P)LT D. A.Y.2002-03 AGGRIEVED BY THE AFORESAID ORDER OF THE LD. CIT(A), THE REVENUE IS BEFORE US. 10. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ISSUE I N RESPECT TO THE SALE OF DEPB LICENCE IS NO LONGER RES INTEGRA. WE NOTE THAT THE SP ECIAL BENCH IN THE CASE OF M/S. MARAL OVERSEAS LTD. REPORTED IN 136 ITD 177 (IND) (SB) HAS DEALT WITH THE SIMILAR ISSUE. THE LD. AR TOOK OUR ATTENTION TO PAGE 63 OF THE PAPER BOOK WHEREIN WE NOTE THAT THE SPECIAL BENCH HAS ANSWERED T HE QUESTION RAISED BEFORE IT IN FAVOUR OF THE ASSESSEE. WE NOTE THAT IN THE S AID CASE THE ELIGIBILITY OF DEDUCTION IN RESPECT OF EXPORT INCENTIVE RECEIVED BY T HE ASSESSEE IN TERMS OF THE PROVISION OF SECTION 10B(1) R.W.S. 10B(4) OF THE ACT WAS UNDER CHALLENGE. THE FACTS IN BRIEF IN THAT CASE WAS THAT DURING THE YEAR T HE ASSESSEE WAS IN RECEIPT OF EXPORT ENTITLEMENT OF RS.1.65 CR. AND SPECIAL IMPORT L ICENCE OF RS.4.47 LACS. THE AO DECLINED THE CLAIM OF DEDUCTION BY HOLDING THAT SUCH INCOME WAS NOT DERIVED FROM 100% EXPORT ORIENTED UNDERTAKING, AND THEREFORE NOT ELIGIBLE FOR CLAIM OF DEDUCTION U/S. 10B(1) R.W.S. 10B(4) OF THE ACT. THE LD. CIT(A) FOLLOWING THE TRIBUNALS ORDER IN THE ASSESSEES OWN CASE HELD THAT THE ASSESSEE WAS ELIGIBLE FOR EXEMPTION IN RESPECT OF EXPORT ENTITLEMENT AND SPE CIAL IMPORT LICENCE AS THE INCOME OF EOU IS ELIGIBLE FOR EXEMPTION U/S. 10B OF THE ACT. THE SPECIAL BENCH TOOK NOTE OF THE FACT THAT EXPORT ENTITLEMENT WAS AL LOTTED BY THE COMPETENT AUTHORITY IN RESPECT OF EXPORT UNDERTAKEN BY THE ASSESS EE DURING THE YEAR. THE SPECIAL BENCH WAS OF THE VIEW THAT THE ASSESSEE OFF LOADED THE ENTITLEMENT WHICH WAS UNUSABLE AND BOUGHT QUOTA/ENTITLEMENTS WHICH WA S REQUIRED FOR PROCURING THE REQUIRED MATERIAL NECESSARY FOR ITS PRODUCTION PURPO SE. THE SPECIAL BENCH ALSO NOTED THAT SPECIAL IMPORT LICENCE WAS ALLOTTED TO THE ASSESSEE BY THE DESIGNATED AUTHORITY AS PER EXPORT IMPORT POLICY AND P ROCEDURE 1997-2002 AND INCOME ARISING OUT OF SALE OF EXPORT ENTITLEMENT AND SPECIAL IMPORT LICENCE WAS ASSESSED AS INCOME FROM BUSINESS. THE QUESTION BEF ORE THE SPECIAL BENCH WAS THAT WHETHER ON SUCH BUSINESS INCOME , THE ASSESSEE IS ENTITLED TO CLAIM OF DEDUCTION U/S. 10B OF THE ACT. THE RELEVANT PROVISIO NS OF SECTION 10B(4) READS AS UNDER: (4) FOR THE PURPOSES OF SUB-SECTION (1), THE PROF ITS DERIVED FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE SHALL BE THE AMOUNT WHICH BEARS T O THE PROFITS OF THE BUSINESS OF THE UNDERTAKING, THE SAME PROPORTION AS THE EXPORT TURN OVER IN RESPECT OF SUCH ARTICLES OR THINGS OR COMPUTER SOFTWARE BEARS TO THE TOTAL TURNOVER OF T HE BUSINESS CARRIED ON BY THE UNDERTAKING. WE TAKE NOTE THAT THE WORDS USED IN 10B(4) AND 10A(4 ) OF THE ACT ARE PARI MATERIA, WHICH WE ARE CONCERNED IN THE PRESENT CASE BE FORE US SO THE ISSUE IS IDENTICAL. THE SPECIAL BENCH ANSWERED THE AFORESAID QUESTION AS UNDER: IT IS CLEAR FROM THE PLAIN READING OF SECTION 10B (1) OF THE ACT THAT THE SAID SECTION ALLOWS DEDUCTION IN RESPECT OF PROFITS AND GAINS AS ARE DE RIVED BY A 100% EOU. FURTHER, SECTION 10B(4) OF THE ACT STIPULATES SPECIFIC FORMULA FOR COMPUTIN G THE PROFIT DERIVED BY THE UNDERTAKING FROM EXPORT. THUS, THE PROVISIONS OF SUB-SECTION (4) OF SECTION 10B OF THE ACT MANDATE THAT 5 ITA NO.2442/KOL/2016 M/S TEA PROMOTER (INDIA) (P)LT D. A.Y.2002-03 DEDUCTION UNDER THAT SECTION SHALL BE COMPUTED BY A PPORTIONING THE PROFITS OF THE BUSINESS OF THE UNDERTAKING IN THE RATIO OF EXPORT TURNOVER BY THE TOTAL TURNOVER. THUS, EVEN THOUGH SUB- SECTION (1) OF SECTION 10B REFERS TO PROFITS AND GA INS AS ARE DERIVED BY A 100% EOU, THE MANNER OF DETERMINING SUCH ELIGIBLE PROFITS HAS BEEN STATU TORILY DEFINED IN, SUB-SECTION (4) OF THAT SECTION. BOTH SUB-SECTIONS (1) AND (4) ARE TO BE RE AD TOGETHER WHILE COMPUTING THE ELIGIBLE DEDUCTION U/S 10B OF THE ACT. WE CANNOT IGNORE SUB- SECTION (4) OF SECTION 10B WHICH PROVIDES SPECIFIC FORMULA FOR COMPUTING THE PROFITS DERIVED BY THE UNDERTAKING FROM EXPORT. AS PER THE FORMULA SO LAID DOWN, THE ENTIRE PROFITS OF THE BUS INESS ARE TO BE DETERMINED WHICH ARE FURTHER MULTIPLIED BY THE RATIO OF EXPORT TURNOVER TO THE T OTAL TURNOVER OF THE BUSINESS. IN CASE OF LIBERTY INDIA, THE HON'BLE SUPREME COURT HAS DEALT WITH THE PROVISIONS OF SECTION 80IA OF THE ACT WHEREIN NO FORMULA WAS LAID DOWN FOR COMPUTING THE PROFITS DERIVED BY THE UNDERTAKING WHICH HAS SPECIFICALLY BEEN PROVIDED UNDER SUB-SECTION (4 ) OF SECTION 10B WHILE COMPUTING THE PROFITS DERIVED BY THE UNDERTAKING FROM THE EXPORT. THUS, T HE DECISION OF THE HON'BLE SUPREME COURT IS OF NO HELP TO THE REVENUE IN DETERMINING THE CLAIM OF DEDUCTION U/S 10B IN RESPECT OF EXPORT INCENTIVES. 78. SECTION 10B SUB-SECTION (1) ALLOWS DEDUCTION IN RESPECT OF PROFITS AND GAINS AS ARE DERIVED BY A 100% EOU SECTION 10B(4) LAYS DOWN SPEC IAL FORMULA FOR COMPUTING THE PROFITS DERIVED BY THE UNDERTAKING FROM EXPORT. THE FORMULA IS AS UNDER :- PROFIT OF THE BUSINESS OF THE UNDERTAKING X EXPORT TURNOVER TOTAL TURNOVER OF BUSINESS CARRIED OUT BY THE UNDERTAKING 79. THUS, SUB-SECTION (4) OF SECTION 10B STIPULATED THAT DEDUCTION UNDER THAT SECTION SHALL BE COMPUTED BY APPORTIONING THE PROFITS OF THE BUSINES S OF THE UNDERTAKING IN THE RATIO OF TURNOVER TO THE TOTAL TURNOVER. THUS, NOT-WITH-STANDING THE FACT THAT SUB-SECTION (1) OF SECTION 10B REFERS THE PROFITS AND GAINS AS ARE DERIVED BY A 100% EOU, YET THE MANNER OF DETERMINING SUCH ELIGIBLE PROFITS HAS BEEN STATUTORILY DEFINED IN SU B-SECTION (4) OF SECTION 10B OF THE ACT. AS PER THE FORMULA STATED ABOVE, THE ENTIRE PROFITS OF THE BUSINESS ARE TO BE TAKEN WHICH ARE MULTIPLIED BY THE RATIO OF THE EXPORT TURNOVER TO THE TOTAL TU RNOVER OF THE BUSINESS. SUB-SECTION (4) DOES NOT REQUIRE AN ASSESSEE TO ESTABLISH A DIRECT NEXUS WITH THE BUSINESS OF THE UNDERTAKING AND ONCE AN INCOME FORMS PART OF THE BUSINESS OF THE UN DERTAKING, THE SAME WOULD BE INCLUDED IN THE PROFITS OF THE BUSINESS OF THE UNDERTAKING. THU S, ONCE AN INCOME FORMS PART OF THE BUSINESS OF THE ELIGIBLE UNDERTAKING, THERE IS NO FURTHER MA NDATE IN THE PROVISIONS OF SECTION 10B TO EXCLUDE THE SAME FROM THE ELIGIBLE PROFITS. THE MOD E OF DETERMINING THE ELIGIBLE DEDUCTION U/S 10B IS SIMILAR TO THE PROVISIONS OF SECTION 80HHC I NASMUCH AS BOTH THE SECTIONS MANDATES DETERMINATION OF ELIGIBLE PROFITS AS PER THE FORMUL A CONTAINED THEREIN. THE ONLY DIFFERENCE IS THAT SECTION 80HHC CONTAINS A FURTHER MANDATE IN TE RMS OF EXPLANATION (BAA) FOR EXCLUSION OF CERTAIN INCOME FROM THE ''PROFITS OF THE BUSINESS 1 1 WHICH IS, HOWEVER, CONSPICUOUS BY ITS ABSENCE IN SECTION 10B. ON THE BASIS OF THE AFORESA ID DISTINCTION, SUB-SECTION (4) OF SECTION 10A/10B OF THE ACT IS A COMPLETE CODE PROVIDING THE MECHANISM FOR COMPUTING THE PROFITS OF THE BUSINESS ELIGIBLE FOR DEDUCTION U/S. 10B OF TH E ACT . ONCE AN INCOME FORMS PART OF THE BUSINESS OF THE INCOME OF THE ELIGIBLE UNDERTAKING OF ASSESSEE, THE SAME CANNOT BE EXCLUDED FROM THE ELIGIBLE PROFITS FOR THE PURPOSE OF COMPUT ING DEDUCTION U/S 10B OF THE ACT. AS PER THE COMPUTATION MADE BY THE ASSESSING OFFICER HIMSELF, THERE IS NO DISPUTE THAT BOTH THESE INCOMES HAVE BEEN TREATED BY THE ASSESSING OFFICER AS BUSIN ESS INCOME. THE CBDT CIRCULAR NO. 564 DATED 5TH JULY, 1990 REPORTED IN 184 ITR (ST.) 137 EXPLAINED THE SCOPE AND AMBIT OF SECTION 80HHC AND THE MODE OF DETERMINATION OF PROFITS DERI VED BY AN ASSESSEE FROM THE EXPORT OF GOODS. 1 T.A.T., SPECIAL BENCH IN THE CASE OF INTER NATIONAL RESEARCH PARK LABORATORIES V. ACIT, 212 ITR (AT) 1, AFTER FOLLOWING THE AFORESAID CIRCU LAR, HELD THAT STRAIGHT JACKET FORMULA GIVEN IN 6 ITA NO.2442/KOL/2016 M/S TEA PROMOTER (INDIA) (P)LT D. A.Y.2002-03 SUB-SECTION (3) HAS TO BE FOLLOWED TO DETERMINE THE ELIGIBLE DEDUCTION. THE HON'BLE SUPREME COURT IN THE CASE OF P.R. PRABHAKAR; 284 ITR 584 HA D APPROVED THE PRINCIPLE LAID DOWN IN THE SPECIAL BENCH DECISION IN INTERNATIONAL RESEARCH PA RK LABORATORIES V. ACIT (SUPRA). IN THE ASSESSEE'S OWN CASE THE I.T.A.T IN THE PRECEDING YE ARS, AFTER CONSIDERING THE DECISION IN THE CASE OF LIBERTY INDIA HELD THAT PROVISIONS OF SECTION 10 B ARE DIFFERENT FROM THE PROVISIONS OF SECTION 80LA WHEREIN NO FORMULA HAS BEEN LAID DOWN FOR COMP UTING THE ELIGIBLE BUSINESS PROFIT. 80. IN VIEW OF THE ABOVE DISCUSSION, QUESTION NO. 2 IS ANSWERED IN AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, THE ASSESSEE IS ELIGIBLE FOR CLAIM OF DEDUCTION ON EXPORT INCENTIVE RECEIVED BY IT IN TERMS OF PROVISIONS OF SECTION 10 B(1) READ WITH SECTION 10B(4) OF THE ACT.' WE NOTE THAT THE SPECIAL BENCH OBSERVED THAT SUB-SEC TION (4) OF SECTION 10A/10B OF THE ACT IS A COMPLETE CODE PROVIDING MECHANISM FO R COMPUTING THE PROFIT OF THE BUSINESS ELIGIBLE FOR DEDUCTION U/S. 10B OF THE ACT. THE LD. DR COULD NOT POINT OUT ANY DIFFERENCE IN THE LAW OR FACTS SO WE ARE INCLINED TO UPHOLD THE ORDER OF THE LD. CIT(A) ON THE REASONING GIVEN BY THE SPEC IAL BENCH, (SUPRA). THEREFORE, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE AND THE SAME STANDS DISMISSED. WE THEREFORE FOLLOW THE ABOVE COORDINATE BENCHS DE CISION TO DELETE THIS DISALLOWANCE AS WELL. 6. THIS LEAVES US TO ASSESSEES THIRD GRIEVANCE AND SEEKING TO CLAIM INTEREST INCOME OF RS.23,13,606/- TO HAVE BEEN DERIVED FROM THE ELIGIBLE EXPORT ORIENTED UNIT AS DISALLOWED IN ASSESSMENT AND AFFIRMED IN THE LO WER APPELLATE PROCEEDINGS. THERE IS NO DISPUTE BETWEEN THE PARTIES THAT THE IMPUGNED INTEREST INCOME HAS BEEN DERIVED FROM MARGIN MONEY EARNED ON DEPOSITS MADE FOR AVAIL ING CREDIT FACILITY FROM THE BANK PURELY FOR ASSESSEES BUSINESS PURPOSES. BOTH PARTIES TAKE US TO THE COORDINATE BENCHS ORDER IN ASSESSEES CASE ITSELF (SUPRA) IN A.Y.2002-03 TO 2004-05 HOLDING IDENTICAL INCOME LIABLE TO BE TREATED UNDER THE HEA D BUSINESS INCOME CONSEQUENTLY ELIGIBLE FOR SECTION 10B DEDUCTION. WE THUS ADOPT J UDICIAL CONSISTENCY TO DELETE THIS DISALLOWANCE AS WELL. 7 ITA NO.2442/KOL/2016 M/S TEA PROMOTER (INDIA) (P)LT D. A.Y.2002-03 7. THIS ASSESSEES APPEAL IS ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON 09.05.2018. SD/- SD/- [M.BALAGANESH] [ S.S. GODARA ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09.05.2018 [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.M/S TEA PROMOTERS (INDIA) PVT. LTD., 17, CHOWRING HEE MANSION, 30, J.L.NEHRU ROAD, KOLKATA-700016. 2. A.C.I.T., CIRCLE-IV, KOLKATA. 3. CIT(A)-IV, KOLKATA 4. C.I.T.-II, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHES