M/s. Drishti Apparels, Gurgaon V. ITO, New Delhi

ITA 4683/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5260 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 01-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL ARORA
• Assessee Lawyers: ABHISHEK ARORA
• Keywords: Retrospective amendment; Question of law; Set aside
• Section: 143(3); 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNT ANT MEMBER & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO-4683/DEL/2016 (ASSESSMENT YEAR: 2001-02) DRISHTI APPARELS 180, SECTOT-6, IMT MANESAR GURGAON AAAFD2361B VS ITO WARD-23(4) NEW DELHI REVENUE BY SH. SUNIL ARORA, CA ASSESSEE BY SH. ABHISHEK ARORA, SR. DR ORDER PER K. NARSIMHA CHARY, J.M. CHALLENGING THE ORDER DATED 29/06/2016 IN APPEAL NO . 191/14-15 PASSED BY THE LD. COMMISSIONER OF INCOME TA X (APPEALS)-II, NEW DELHI (CIT(A)) FOR A.Y. 2012-13 , ASSESSEE PREFERRED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND EXPORT OF DATE OF HEARING 14 .0 5 .201 9 DATE OF PRONOUNCEMENT 17 .0 5 .201 9 ITA NO. 4683/DEL/2016 2 COTTON GARMENT, LEATHER GARMENT, BAGS AND OTHER LEATH ER GOODS &ACCESSORIES. DURING THE RELEVANT YEAR, A.Y 2001-02 , THE ASSESSEE HAD EARNED CERTAIN PROFITS FROM EXPORT BUSINESS AND ACCORDINGLY HAD CLAIMED DEDUCTION1,56,83,432/- IN TERMS OF SECTION 8 0HHC OF THE ACT. THEIR RETURN OF INCOME WAS FILED ON 31.10.200 1 DECLARING TOTAL INCOME OF RS.41,62,531.25/-. 3. ASSESSMENT IN THE CASE OF THE ASSESSEE WAS ORIGIN ALLY COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 (T HE ACT), VIDE ORDER DATED 16.03.2004 ON TOTAL INCOME OF RS. 1,57,3 7,189/- ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 80HHC OF T HE SAID ACT AMOUNTING TO RS. 1,56,83,432/- AND CERTAIN AD-HOC DI SALLOWANCE OF VEHICLE RUNNING & MAINTENANCE, TELEPHONE EXPENSE ETC . 4. THE APPEAL PREFERRED BY THE ASSESSEE WAS DISMISSE D BY THE CIT(A) BY ORDER DATED 15/09/2004 UPHOLDING THE FIND INGS OF THE LD. ASSESSING OFFICER AND DISALLOWING THE CLAIM OF DEDUC TION U/S 80HHC. SUCH AN ORDER WAS CARRIED BY THE ASSESSEE I N APPEAL TO THE TRIBUNAL AND A COORDINATE BENCH OF THIS TRIBUNAL WH ILE ORDER DATED 28/02/2005 IN ITA NO. 2479/DEL/2004 SET ASIDE THE O RDER OFTHE LD. CIT (A) REGARDING THE ISSUE OF ALLOWABILITY OF DEDU CTION U/S 80HHC TO THE ASSESSEE AND DIRECTED THE LD. A.O TO RECOMPUT E THE DEDUCTION U/S 80HHC OF THE ACT IN ACCORDANCE WITH T HE FINDINGS GIVEN IN SUCH ORDER. 5. BEING AGGRIEVED BY THE ORDER OF THE TRIBUNAL, TH E ASSESSEE PREFERRED APPEAL TO THE HON'BLE HIGH COURT AND THE HON'BLE HIGH ITA NO. 4683/DEL/2016 3 COURT VIDE ORDER DATED 31/1/2012 IN ITA NO. 959/20 05 REMITTED THE ISSUE TO THE FILE OF THE ITAT BY OBSERVING THA T : 2. AFTER THE PRESENT APPEAL WAS ADMITTED, THERE H AS BEEN RETROSPECTIVE AMENDMENT WITH APPEAL/ INCORPORATION OF SECTION 28(IIID). THERE HAS BEEN ALSO CORRESPONDING AMENDMENT IN SECTION 80HHC. (EXPLANATION BAA). 3. THESE AMENDMENTS WERE MADE BY TAXATION LAWS (AMENDMENT) ACT, 2005 WITH RETROSPECTIVE EFFECT FRO M 1 ST APRIL, 1998. 4. IN VIEW OF THE AFORESAID AMENDMENT, WE FEEL THAT T HE MATTER SHOULD BE CONSIDERED AND DECIDED BY THE TRIB UNAL AFRESH AS IT REQUIRES FACTUAL EXAMINATION AND DETAI LS. ACCORDINGLY, WE ANSWER THE QUESTION OF LAW MENTIONE D ABOVE BY DIRECTING THE TRIBUNAL TO DECIDE THE ASPECT/ISSU E AFRESH IN VIEW OF THE RETROSPECTIVE AMENDMENT. THE ORDER PASS ED BY THE TRIBUNAL DECIDING THE QUESTION/ISSUE WILL BE TREATE D AS SET ASIDE. 6. ON REMAINED, THE TRIBUNAL, AFTER CONSIDERING THE SUBMISSIONS ON EITHER SIDE AND TAKING NOTE OF THE AMENDMENTS IN QUESTION, BY ORDER DATED 16/3/2012 SET ASIDE THE ISSUE TO THE FI LE OF THE LD. ASSESSING OFFICER WITH A DIRECTION TO COMPUTE THE DEDUCTION U/S 80HHC OF THE ACT, WITH THE FOLLOWING OBSERVATIONS: 3. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE THE AO P ASSED ASSESSMENT ORDER ON 16.03.2004. THE LEARNED CIT(A) UPHELD THE ORDER OF THE AO VIDE HER ORDER DATED 15.09.2004.ITA T DISPOSED OF ASSESSEES APPEAL VIDE ORDER DATED 28 TH FEBRUARY, 2005. TAXATION LAWS (AMENDMENT) ACT, 2005 INSERTED CLAUSE(IIID) TO SEC.28 WITH RETROSPECTIVE EFFECT FROM 01.04.1998. AS PER CLAUSE (IIID), ANY PROFIT ON TRANSFER OF THE DUTY ENTITLEMENT PASS BOO K (DEPB) IS TAXABLE AS BUSINESS PROFIT. THE TAXATION LAWS (AMEN DMENT) ACT, 2005 ALSO INSERTED THIRD AND FOURTH PROVISOS TO SEC . 80HHC(3) WITH RETROSPECTIVE EFFECT FROM 01.04.1992. SINCE AMENDED PROVISIONS OF SEC.28(IIID) AND SECOND TO FIFTH ITA NO. 4683/DEL/2016 4 PROVISOS WERE NOT AVAILABLE ON STATUTE WHEN THE ASS ESSING OFFICER, CIT(A) AND ITAT PASSED THE ORDERS AND SINC E THE PROVISIONS TO SEC. 80HHC(3) AND CLAUSE (IIID) TO SEC. 28 HAVE BEEN INSERTED WITH RETROSPECTIVE EFFECT, WE FEEL IT PROPER TO SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIO NS TO EXAMINE THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SEC.80HHC IN RESPECT OF DEPB RECEIPTS IN THE LIGHT OF AMENDED PROVISIONS OF LAW. WE WOULD LIKE TO MENTION THAT HON.BLE SUPREME COURT IN THE CASE OF M/S. TOPMAN EXPORTS (SUPRA) HAS HELD AS UNDER:- 22. THE AFORESAID DISCUSSION -WOULD SHOW THAT WHER E AN ASSESSEE HAS AN EXPORT TURNOVER EXCEEDING RS. 10 CRORES AND HAS MADE PROFITS ON TRANSFER OF DEPB UNDER CLAUSE (D) OF SECTION 28, HE WOULD NOT GET THE BENEFIT OF ADDITION TO EXPORT PROFITS UNDER THI RD OR FOURTH PROVISO TO SUB-SECTION (3) OF SECTION 80HHC, BUT HE WOULD G ET THE BENEFIT OF EXCLUSION OF A SMALLER FIGURE FROM 'PROFITS OF THE BUSINESS' UNDER EXPLANATION (BAA) TO SECTION 80HHC OF THE ACT AND T HERE IS NOTHING IN EXPLANATION (IIID) TO SECTION 80HHC TO SHOW THAT THIS BENEFIT OF EXCLUSION OF A SMALLER FIGURE FROM 'PROFITS OF THE BUSINESS' WILL NOT BE AVAILABLE TO AN ASSESSEE HAVING AN EXPORT TURNOV ER EXCEEDING RS.10 CRORES. IN OTHER WORDS, WHERE THE EXPORT TURN OVER OF AN ASSESSEE EXCEEDS RS. 10 CRORES, HE DOES NOT GET THE BENEFIT OF ADDITION OF NINETY PER CENT OF EXPORT INCENTIVE UND ER CLAUSE (IIID) OF SECTION 28 TO HIS EXPORT PROFITS, BUT HE GETS A HIG HER FIGURE OF PROFITS OF THE BUSINESS, WHICH ULTIMATELY RESULTS IN COMPUT ATION OF A BIGGER EXPORT PROFIT. THE HIGH COURT, THEREFORE, WAS NOT R IGHT IN COMING TO THE CONCLUSION THAT AS THE ASSESSEE DID NOT HAVE TH E EXPORT TURNOVER EXCEEDING RS. 10 CRORES AND AS THE ASSESSEE DID NOT FULFILL THE CONDITIONS SET OUT IN THE THIRD PROVISO TO SECTION 80HHC (III), THE ASSESSEE WAS NOT ENTITLED TO A DEDUCTION UNDER SECT ION 80HHC ON THE AMOUNT RECEIVED ON TRANSFER OF DEPB AND WITH A VIEW TO GET OVER THIS DIFFICULTY THE ASSESSEE WAS CONTENDING THAT TH E PROFITS ON TRANSFER OF DEPB UNDER SECTION 28 (IIID) WOULD NOT INCLUDE THE FACE VALUE OF THE DEPB. IT IS A WELL-SETTLED PRINCIPLE O F STATUTORY INTERPRETATION OF A TAXING STATUTE THAT A SUBJECT W ILL BE LIABLE TO TAX AND WILL BE ENTITLED TO EXEMPTION FROM TAX ACCORDIN G TO THE STRICT LANGUAGE OF THE TAXING STATUTE AND IF AS PER THE WO RDS USED IN EXPLANATION (BAA) TO SECTION 80HHC READ WITH THE WO RDS USED IN CLAUSES (IIID) AND (IIID) OF SECTION 28, THE ASSESS EE WAS ENTITLED TO A DEDUCTION UNDER SECTION 80HHC ON EXPORT PROFITS, TH E BENEFIT OF SUCH DEDUCTION CANNOT BE DENIED TO THE ASSESSEE. ITA NO. 4683/DEL/2016 5 IN VIEW OF THE AMENDED PROVISIONS OF LAW AND THE DE CISION OF HON.BLE SUPREME COURT IN THE CASE OF M/S. TOPMAN EXPORTS (S UPRA), WE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICE R AND DIRECT HIM TO COMPUTE DEDUCTION U/S 80HHC OF THE ACT ACCORDINGLY. 7. PURSUANT TO THE DIRECTIONS OF THE ITAT, WHILE RE MITTING THE MATTER, LD. A.O PASSED THE ORDER DATED 28/3/2014 BY CONSIDERING THE TAXATION LAW AMENDMENT ACT, 2005 IN THE LIGHT OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF TOPMAN EXPO RTS (2012) 18 TAXMANN.COM 120 (SC). IN DOING SO, THE LD. A.O OBSER VED THAT THOUGH THE ASSESSEE RELIED ON THE DECISION OF THE H ONBLE GUJRAT HIGH COURT IN CASE OF AVANI EXPORT VS. CIT(A) 2012 23 TAXMAN.COM 62 (GUJRAT) WHEREIN RETROSPECTIVE AMENDMENTS IN THE A CT FOR HELD TO BE INVALID, SINCE THE HON'BLE HIGH COURT WHILE R ESTORING THE MATTER TO THE TRIBUNAL DIRECTED THE TRIBUNAL TO ADJ UDICATE THE ISSUE OF DEDUCTION OF 80HHC AFTER CONSIDERING THE RETROSP ECTIVE AMENDMENTS BY THE TAX LAW AMENDMENT ACT, 2005 W.E.F. 1/4/1998 IN THE LIGHT OF M/S TOPMAN EXPORTS (SUPRA). 8. THE ASSESSEE PREFERRED APPEAL AGAINST SUCH AN OR DER BEFORE THE CIT(A) AND ARGUED BEFORE THE LD. CIT(A) THAT TO THE FACTS OF THE CASE THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. AVANI EXPORTS 2015 58 TAXMAN.COM 100 SUPREME COURT IS APPLICABLE.LD. CIT(A) ALSO, HOWEVER, MADE AN OBSERVA TION THAT THE ITAT DIRECTED THE LD. ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80HHC IN RESPECT OF DEPB RECEIPTS IN VIEW OF AMENDED PROVISIONS OF LAW AND THE DECISION OF THE APEX COURT IN THE CASE OF M/S TOPMAN EXPORTS (SUPRA) AND THE ITAT ITA NO. 4683/DEL/2016 6 RELIED UPON THE DECISION OF THE APEX COURT IN THE C ASE OF TOPMAN EXPORTS (SUPRA) WHEREIN IT WAS HELD THAT THE ASSESS EE WAS ENTITLED ONLY FOR THE FACE VALUE OF THE DEPB DESPITE HAVING EXPORT TURNOVER IN EXCESS OF RS. 10 CRORES AND NOT THE PROFIT ON SA LE OF DEPB AS THE ASSESSEES TURNOVER WAS IN ACCESS OF RS. 10 CRORES AND QUOTED THE SPECIFIC PARA OF THE DECISION GIVEN BY THE HONBLE APEX COURT IN TOPMAN EXPORTS (SUPRA) WHEREIN PROFIT ON SALE OF DAP B U/S 28(IIID) WOULD NOT BE ELIGIBLE BECAUSE OF THE EXPORT TURNOVE R IN EXCESS OF 10 CRORES. LD.CIT(A)DID NOT DISCUSS THE IMPACT OF DECISION OF THE HONBLE APEX COURT IN THE CASE OF AVANI EXPORT AND CONFIRMED THE FINDINGS OF THE LD. A.O. 9. THE ASSESSEE IS, THEREFORE, IN THIS APPEAL BEFOR E US CONTENDING THAT THE AUTHORITIES BELOW COMMITTED AN ER ROR IN NOT CONSIDERING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF AVANI EXPORT(SUPRA) AND AS A MATTER OF FACT SUCH A D ECISION COVERS THE FACTS OF THIS CASE AND HOLDS THE FIELDS. 10. PER CONTRA, IT IS THE SUBMISSION OF THE LD. DR THAT IN SO FAR AS THE ORDERS OF THE HON'BLE HIGH COURT AND THE TRIBUN AL IN REMINDING THE MATTER TO THE TRIBUNAL AND THE LD. A.O RESPECTI VELY, THE SPECIFIC DIRECTION WAS TO EXAMINE A CLAIM OF THE ASSE SSEE FOR DEDUCTION U/S 80HHC IN RESPECT OF THE DEPB RECEIPT S AND THE PROFIT ON SALE OF DEPB IN THE LIGHT OF THE DECISION IN TOPMAN EXPORTS (SUPRA) AND, THEREFORE, THE AUTHORITIES BEL OW ARE JUSTIFIED IN CONFINING THEMSELVES TO THE EXAMINATION OF THE ISSUE IN THE LIGHT ITA NO. 4683/DEL/2016 7 OF THE AMENDMENTS MADE BY THE TAX LAW (AMENDMENTS) ACT , 2005 IN THE LIGHT OF THE DECISION OF THE HONBLE APEX CO URT IN THE CASE OF TOPMAN EXPORT (SUPRA). 11. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. AT THE OUTSET IT I S NOTICED THAT THOUGH ORIGINALLY IN THE GROUNDS OF APPEAL THE ASSE SSEE CHALLENGED THE DEDUCTION U/S 80HHC OF THE ACT AT RS. 1,40,41,9 61/- INSTEAD OF DEDUCTION OF RS. 1,56,83,432/- BY WAY OF MODIFICATIO N, THEYSUBSTITUTED FIGURES RS. 1,56,83,432/- WITH RS. 1,57,75,985/- ON THE GROUND THAT AS PER THE CBDT CIRCULAR NO. 37/201 6 DEDUCTION UNDER CHAPTER VIA SHALL BE ALLOWED ON ENHANCED INCO ME, I.E. INCOME ASSESSED AFTER MAKING ADDITIONS AND SUCH INCOME ELIGIBLE FOR DEDUCTION U/S 80HHC, ACCORDING TO THE ASSESSEE IS RS.1,57,75,985/. 12. IT IS AN ADMITTED FACT THAT THE ASSESSEE IS AN EXPORTER OF LEATHER GOODS AND HAS BEEN CLAIMING EXAMINATION U/S 80HHC FOR SEVERAL YEARS AND DURING THE RELEVANT PREVIOUS YEAR I.E. FINANCIAL YEAR 2000-01 RELEVANT FOR THE ASSESSMENT YEAR 2001-0 2, THE EXPORT INCENTIVES, WHICH THE ASSESSEE WAS ENTITLED TO WER E CHANGED FROM DUTY DRAW BACK TO THE DEPB LICENSE; THAT THOUGH THE ASSESSEE CLAIMED DEDUCTION U/S 80HHC ON THE PROFIT FROM TRANS FER OF SAID LICENSE, SUCH A CLAIM WAS REJECTED BY THE AUTHORITIE S BELOW; AND THAT THE ASSESSEE WAS ALLOWED DEDUCTION U/S 80HHC B Y A ITA NO. 4683/DEL/2016 8 COORDINATE BENCH OF THIS TRIBUNAL BY ORDER DATED 28 /02/2005 AGAINST WHICH THE REVENUE PREFERRED AN APPEAL. 13. IT IS ALSO AN IN DISPUTE THAT IN THE MEANTIME SEC TION 80HHC WAS AMENDED BY THE TAXATION LAWS (AMENDMENT) ACT, 20 05 WITH RETROSPECTIVE EFFECT FROM 1/4/1998. IN VIEW OF THIS , THE HONBLE JURISDICTIONAL HIGH COURT BY ORDER DATED 3/1/2012 R EMANDED THE MATTER TO THE TRIBUNAL FOR DECIDING IT AFRESH AS IT REQUIRED FACTUAL EXAMINATION AND THE DETAILS AND TO DECIDE THE ISSUE AFRESH,IN VIEW OF THE RETROSPECTIVE AMENDMENT TO SECTION 80HHC. 14. PURSUANT TO SUCH DIRECTION OF THE HON'BLE HIGH COURT THE TRIBUNAL HEARD THE MATTER AND BY ORDER DATED 16/3/2 012 RECORDED THAT AS UNDER:- 3. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE THE AO P ASSED ASSESSMENT ORDER ON 16.03.2004. THE LEARNED CIT(A) UPHELD THE ORDER OF THE AO VIDE HER ORDER DATED 15.09.2004.ITA T DISPOSED OF ASSESSEES APPEAL VIDE ORDER DATED 28 TH FEBRUARY, 2005. TAXATION LAWS (AMENDMENT) ACT, 2005 INSERTED CLAUSE(IIID) TO SEC.28 WITH RETROSPECTIVE EFFECT FROM 01.04.1998. AS PER CLAUSE (IIID), ANY PROFIT ON TRANSFER OF THE DUTY ENTITLEMENT PASS BOO K (DEPB) IS TAXABLE AS BUSINESS PROFIT. THE TAXATION LAWS (AMEN DMENT) ACT, 2005 ALSO INSERTED THIRD AND FOURTH PROVISOS TO SEC . 80HHC(3) WITH RETROSPECTIVE EFFECT FROM 01.04.1992. SINCE AMENDED PROVISIONS OF SEC.28(IIID) AND SECOND TO FIFTH PROVISOS WERE NOT AVAILABLE ON STATUTE WHEN THE ASS ESSING OFFICER, CIT(A) AND ITAT PASSED THE ORDERS AND SINC E THE PROVISIONS TO SEC. 80HHC(3) AND CLAUSE (HID) TO SEC. 28 HAVE B EEN INSERTED WITH RETROSPECTIVE EFFECT, WE FEEL IT PROPER TO SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIO NS TO EXAMINE THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SEC.80HHC IN RESPECT OF DEPB RECEIPTS IN THE LIGHT OF AMENDED PROVISIONS OF LAW. WE ITA NO. 4683/DEL/2016 9 WOULD LIKE TO MENTION THAT HON.BLE SUPREME COURT IN THE CASE OF M/S. TOPMAN EXPORTS (SUPRA) HAS HELD AS UNDER:- 22. THE AFORESAID DISCUSSION -WOULD SHOW THAT WHER E AN ASSESSEE HAS AN EXPORT TURNOVER EXCEEDING RS. 10 CR ORES AND HAS MADE PROFITS ON TRANSFER OF DEPB UNDER CLAUSE (D) O F SECTION 28, HE WOULD NOT GET THE BENEFIT OF ADDITION TO EXPORT PROFITS UNDER THIRD OR FOURTH PROVISO TO SUB-SECTION (3) OF SECTI ON 80HHC, BUT HE WOULD GET THE BENEFIT OF EXCLUSION OF A SMALLER FIGURE FROM 'PROFITS OF THE BUSINESS' UNDER EXPLANATION (BAA) T O SECTION 80HHC OF THE ACT AND THERE IS NOTHING IN EXPLANATIO N (BAA) TO SECTION 80HHC TO SHOW THAT THIS BENEFIT OF EXCLUSIO N OF A SMALLER FIGURE FROM 'PROFITS OF THE BUSINESS' WILL NOT BE A VAILABLE TO AN ASSESSEE HAVING AN EXPORT TURNOVER EXCEEDING RS.10 CRORES. IN OTHER WORDS, WHERE THE EXPORT TURNOVER OF AN ASSESS EE EXCEEDS RS. 10 CRORES, HE DOES NOT GET THE BENEFIT OF ADDIT ION OF NINETY PER CENT OF EXPORT INCENTIVE UNDER CLAUSE (IIID) OF SECTION 28 TO HIS EXPORT PROFITS, BUT HE GETS A HIGHER FIGURE OF PROFITS OF THE BUSINESS, WHICH ULTIMATELY RESULTS IN COMPUTATION O F A BIGGER EXPORT PROFIT. THE HIGH COURT, THEREFORE, WAS NOT R IGHT IN COMING TO THE CONCLUSION THAT AS THE ASSESSEE DID NOT HAVE THE EXPORT TURNOVER EXCEEDING RS. 10 CRORES AND AS THE ASSESSE E DID NOT FULFILL THE CONDITIONS SET OUT IN THE THIRD PROVISO TO SECTION 80HHC (III), THE ASSESSEE WAS NOT ENTITLED TO A DEDUCTION UNDER SECTION 80HHC ON THE AMOUNT RECEIVED ON TRANSFER OF DEPB AN D WITH A VIEW TO GET OVER THIS DIFFICULTY THE ASSESSEE WAS C ONTENDING THAT THE PROFITS ON TRANSFER OF DEPB UNDER SECTION 28 (I IID) WOULD NOT INCLUDE THE FACE VALUE OF THE DEPB. IT IS A WELL-SE TTLED PRINCIPLE OF STATUTORY INTERPRETATION OF A TAXING STATUTE THAT A SUBJECT WILL BE LIABLE TO TAX AND WILL BE ENTITLED TO EXEMPTION FRO M TAX ACCORDING TO THE STRICT LANGUAGE OF THE TAXING STAT UTE AND IF AS PER THE WORDS USED IN EXPLANATION (BAA) TO SECTION 80HHC READ WITH THE WORDS USED IN CLAUSES (IIID) AND (IIID) OF SECTION 28, THE ASSESSEE WAS ENTITLED TO A DEDUCTION UNDER SECTION 80HHC ON EXPORT PROFITS, THE BENEFIT OF SUCH DEDUCTION CANNO T BE DENIED TO THE ASSESSEE. IN VIEW OF THE AMENDED PROVISIONS OF LAW AND THE DE CISION OF HON.BLE SUPREME COURT IN THE CASE OF M/S. TOMAN EXPORTS (SU PRA), WE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICE R AND DIRECT HIM TO COMPUTE DEDUCTION U/S 80HHC OF THE ACT ACCORDINGLY. ITA NO. 4683/DEL/2016 10 15. THE TRIBUNAL, THEREBY, REMANDED THE MATTER TO THE FILE OF THE LD. ASSESSING OFFICER WITH A DIRECTION TO COMPUTE THE DIRECTION U/S 80HHC OF THE ACT. IN THE LIGHT OF THE AMENDED PROV ISIONS OF LAW AND THE DECISION OF THE HONBLE APEX COURT IN THE C ASE OF TOPMAN EXPORT (SUPRA). SUBSEQUENTLY, ON MARCH, 30, 2015, THE HONBLE APEX COURT IN THE CASE OF AVANI EXPORT (SUPRA) HELD THAT HAVING SEEN THE TWIN CONDITIONS AND SECTION 80HHC BENEFIT IS NOT AVAILABLE AFTER 1/4/2005, THE CASES OF EXPORTERS HA VING TURNOVER BELOW AND ABOVE 10 CRORES SHOULD BE TREATED SIMILAR LY. THIS ORDER WAS BROUGHT TO THE NOTICE OF THE AUTHORITIES BELOW, BUT THEY HAVE NOT GIVEN ANY CONSIDERATION TO THIS ASPECT AND ON T HE OTHER HAND THEY HAVE STATED THAT THE MANDATE OF THE HON'BLE HIG H COURT AND THE TRIBUNAL WHILE REMANDING THE MATTER TO THE TRIBUN AL AND THE LD. A.O IS ONLY TO THE EXEMPTION THE CLAIM OF THE ASS ESSEE FOR A DEDUCTION U/S 80HHC, IN RESPECT OF DEPB RECEIPTS IN THE LIGHT OF THE AMENDING PROVISIONS OF LAW AND THE DECISION OF THE A PEX COURT IN THE CASE OF M/S TOPMAN EXPORTS (SUPRA). 16. ON A CAREFUL CONSIDERATION OF THE MATTER, WE FI ND THAT NOW THE LAW IS FIRMLY SETTLED BY THE DECISION OF THE HON BLE APEX COURT THAT THE 3 RD AND 4 TH PROVISO TO SECTION 80HHC INSERTED BY TAXATION LAW (SECOND AMENDMENT ACT, 2005) WOULD NOT OPERATE RETROSPECTIVELY, AND PERIOD PRIOR TO THE SAME AND TH E CASES OF EXPORTERS HAVING TURNOVER BELOW 10 CRORES AND ALSO THE EXPORTERS WITH TURNOVER ABOVE 10 CRORES SHOULD BE TREATED SIMI LARLY, AND EVEN THE EXPORTERS WITH TURNOVER EXCEEDING 10 CRORE S WOULD BE ITA NO. 4683/DEL/2016 11 ENTITLED TO CLAIM THE BENEFIT OF 3 RD PROVISO TO 80HHC (3) WITHOUT COMPLYING WITH ANY CONDITIONS LAID DOWN THEREIN. 17. IN THE FACTS AND CIRCUMSTANCES INVOLVED IN THIS MATTER, WE HAVE NO HESITATION TO HOLD THAT THIS CASE IS SQUARE LY COVERED BY THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF A VANI EXPORTS (SUPRA) AND, THEREFORE, THE DEDUCTION U/S 80HHC OF THE ACT SHALL BE CALCULATED IN ACCORDANCE WITH THIS DECISION. DECIS ION OF THE HONBLE APEX COURT IS THE LAW OF THE LAND AND THE A UTHORITIES CANNOT REFUSE TO FOLLOW THE SAME, WHEN ONCE IT IS BR OUGHT TO THEIR NOTICE. 18. WITH THIS VIEW OF THE MATTER, WE FIND FORCE IN TH E SUBMISSIONS OF THE LD. AR THAT THE DEDUCTION U/S 80H HC HAS TO BE COMPUTED BY GIVING BENEFIT OF THE DECISIONS OF THE H ONBLE APEX COURT IN THE CASE OF AVANI EXPORTS (SUPRA). THE AS SESSEE TO PROVIDE THE WORKING FOR SUCH A RE-COMPUTATION BEFORE THE LD. A.O AND THE LD. A.O WILL VERIFY AND EXTEND THE BENEFIT OF THE D ECISION OF THE HONBLE APEX COURT IN THECAE OF AVANI EXPORT (SUPRA ) TO THE CASE OF THE ASSESSEE. 19. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 17.05.2019 SD/- SD/- (N. K. BILLAIYA) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:17.05.2019 ITA NO. 4683/DEL/2016 12 *R.N COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 15.05 .201 9 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16.05 .201 9 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 1 7 . 0 5 . 2 0 1 9 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 1 7 . 0 5 . 2 0 1 9 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2 0 . 0 5 . 2 0 1 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER