DCIT, Kanpur V. M/s. Super House Leathers Ltd., Kanpur

ITA 752/LKW/2010

• Counselvise Citation: 75223714 RSA 2010
• Duration Of Justice: 3 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-09-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 16-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA D R SHRI P K KAPOOR
• Keywords: Business income; Business expenditure; Opportunity of being heard; Principle of natural justice; Bad and doubtful debts
• Section: 80HHC; 80IB; 37

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.752/LKW/2010 ASSESSMENT YEAR:2003 - 04 DY.C.I.T. - 6, KANPUR. VS. M/S SUPER HOUSE LEATHERS LTD., 150 FEET ROAD, JAJMAU, KANPUR. PAN:AABCS9328K (APPELLANT) (RESPONDENT) ITA NO.764/LKW/2010 ASSESSMENT YEAR:2003 - 04 M/S SUPER HOUSE LEATHERS LTD., 150 FEET ROAD, JAJMAU, KANPUR. PAN:AABCS9328K VS. DY.C.I.T. - 6, KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER A. K. GARODIA, A.M. THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT(A) - I, KANPUR DATED 12/10/2010 FOR ASSESSMENT YEAR 2003 - 2004. 2. FIRST WE TAKE UP THE APPEAL OF THE REVENUE I.E. I.T.A. NO.752/LKW/2010 FOR ASSESSMENT YEAR 2003 - 2004. GROUND NO. 1 IS AS UNDER: REVENUE BY SHRI ALOK MITRA, D. R. ASSESSEE BY SHRI P. K. KAPOOR, C.A. DATE OF HEARING 19/09/2014 DATE OF PRONOUNCEMENT 2 8 /11/2014 2 1. THAT THE LEARN ED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE BAD DEBTS AMOUNTING TO RS.53,05,057/ - WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO PLACED RELIANCE ON A JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF T. R. F. LTD. VS COMMISSIONER OF INC OME - TAX [2010] 323 ITR 397 (SC) . RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF DIRECTOR OF INCOME - TAX (INTERNATIONAL TAXATION) VS OMAN INTERNATIONAL BANK [2008] 313 ITR 128 (BOM) . 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THIS ISSUE WAS DECIDED BY CIT(A) AS PER PARA 26 OF HIS ORDER, WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: - 26. I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, THE REASONING OF THE AO AND THE SUB MISSIONS OF THE APPELLANT THROUGH LD. AR, RELEVANT PART OF WHICH HAS BEEN REPRODUCED ABOVE. THE CLAIM OF BAD DEBTS DEFINED IN THE SECTION 36( 1 )(VII) OF THE INCOME TAX ACT, 1961 PROVIDES THAT - 'NO SUCH DEDUCTION SHALL BE ALLOWED UNLESS SUCH DEBT OR PART THEREOF HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR IN WHICH THE AMOUNT OF SUCH DEBT OR PART THEREOF IS WRITTEN OFF OR OF AN EARLIER PREVIOUS YEAR, OR REPRESENTS MONEY LENT IN THE ORDINARY COURSE OF BUSINESS OR MONEY LENDING WHICH IS CARRIED ON BY THE ASSESSEE'. THE ASSESSEE VIDE WRITTEN SUBMISSIONS DATED 20.02.2006 AND 07.11.2006 HAS ALREADY ENCLOSED THE EXPORT SALES AND ALSO THE RBI APPROVALS FOR THE EXPORT SALES WHICH HAVE BEEN WRITTEN OFF DURING THE YEAR UNDE R CONSIDERATION. THUS, IN MY VIEW THERE IS SUFFICIENT EVIDENCE IN THE FORM OF RBI APPROVAL AND BOOKS OF ASSESSEE FOR THE PURPOSE OF ALLOWANCE OF BAD DEBTS AMOUNTING TO RS.1,55,057/ - , HENCE, THE ADDITION MADE BY AO IS DELETED. FOR ADVANCE FOR EXPENSES 3 AMOUN TING TO RS.1,50,000/ - , THE SAME WAS GIVEN AS A ADVANCE FOR ADVERTISEMENT EXPENSES - LIKE MAKING OF GLOW SIGN BOARDS ETC. AND THE SAME WAS NOT RETURNED HENCE HAS BEEN WRITTEN OFF AS A BAD DEBT. HOWEVER, THE SAME IS ALLOWABLE AS A BUSINESS EXPENDITURE U/S 37 OF THE INCOME TAX ACT, 1961. THUS, GROUND NO. 6 OF APPEAL IS ALLOWED AND ADDITION OF RS.53,05,057/ - IS DELETED. 5. WE FIND THAT IT IS NOTED BY CIT(A) IN PARA 25 OF HIS ORDER THAT TOTAL CLAIM OF RS.53,05,057/ - INCLUDED EXPORT BAD DEBTS AND DOMESTIC BAD DEBTS. IN THE SAME PARA , IT WAS ALSO NOTED THAT IT ALSO INCLUDED SOME ADVANCE S WRITTEN OFF. WE ARE OF THE CONSIDERED OPINION THAT ADVANCE S WRITTEN OFF IS NOT A LLOWABLE U/S 36(1)(VII) ALTHOUGH THE SAME IS ALLOWABLE AS BUSINESS LOSS IF IT IS ESTABLISHED THAT IT HAS ACCRUED DURING THIS YEAR. THERE IS NO FINDING GIVEN BY CIT(A) ON THIS ASPECT. MOREOVER, REGARDING EXPORT BAD DEBTS, IT HAS TO BE SEEN AS TO WHETHER A NY DEDUCTION WAS CLAIMED BY THE ASSESSEE U/S 80HHC IN THE YEAR OF EXPORT IN RESPECT OF THIS EXPORT BECAUSE IF DEDUCTION WAS CLAIMED AND ALLOWED U/S 80HHC, THEN THIS BAD DEBT WRITTEN OFF DOES NOT REMAIN INCLUDED IN THE INCOME OF THE ASSESSEE IN ANY YEAR AND THEREFORE, THE PROVISION S OF SECTION 36(2) ARE NOT COMPLIED WITH AND AS A RESULT DEDUCTION IS NOT ALLOWABLE TO THE ASSESSEE. SINCE THERE IS NO FINDING BY LEARNED CIT(A) ON THESE ASPECTS , WE RESTORE THE ISSUE BACK TO THE FILE OF CIT(A) FOR FRESH DECISION IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES . THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 6. GROUND NO. 2 TO 4 ARE INTER - CONNECTED BEING IN RESPECT OF ALLOWABILITY OF DEDUCTION U/S 80HHC OF THE ACT. THESE GROUNDS ARE AS UNDER: 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION IN RESPECT OF EXCHANGE FLUCTUATION RECEIPTS WITHOUT APPRECIATING THE FACTS OF THE CASE. 4 3. THAT THE LD. COMMISS IONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE INTEREST INCOME OF RS.41,55,388/ - UNDER THE HEAD INCOME FROM OTHER SOURCES AS AGAINST PROFITS AND GAIN FROM BUSINESS WITHOUT APPRECIATING THE FACT THAT THIS IS A DEBATABLE ISSUE AMONG TH E COURTS. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.6,48,.557/ - UNDER MISCELLANEOUS RECEIPTS WITHOUT VERIFYING THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. REGARDING GROUND NO. 3 I.E. REGARDING DELETING INTEREST INCOME OF RS.41,55,388/ - , H E PLACED RELIANCE ON THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. S HRI RAM HONDA POWER EQUIP & ORS AS REPORTED I N [2007] 207 CTR 689. HE ALSO PLACED RELIANCE ON THE JUDGMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS. JYOTI APPARELS [2008] 166 TAXMAN 343 (DEL). 8. AS AGAINST THIS, LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO PLACED R ELIANCE ON A DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME - TAX, CIRCLE 16(1), MUMBAI V. PRAKASH L. SHAH [2008] 115 ITD 167 . HE ALSO PLACED RELIANCE ON A JUDGMENT OF HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT VS. RACHNA UDHYOG [2010] 35 DTR 65. RELIANCE WAS ALSO PLACED ON THE TRIBUNAL DECISION IN THE CASE OF ACIT VS. HEADSTRONG SERVICES INDIA PVT. LTD. IN I.T.A. NO.4181/DEL/2010 DATED 31/07/2012. RELIANCE WAS ALSO PLACED ON THE FOLLOWING JUDICIAL PRON OUNCEMENTS: ( I ) COMMISSIONER OF INCOME - TAX VS S.S.C. SHOES LTD. [2005] 275 ITR 46 (JHAR) ( II ) COMMISSIONER OF INCOME - TAX VS PUNIT COMMERCIAL LTD. [2000] 245 ITR 550 (BOM) 5 ( III ) COMMISSIONER OF INCOME - TAX VS J.K. HOSIERY FACTORY [1986] 159 ITR 85 (SC) ( IV ) DEPUTY COMMISSIONER OF INCOME - TAX VS HARJIVANDAS JUTHABHAI ZAVERI [2002] 258 ITR 785 (GUJ) 9. IN THE REJOINDER, LEARNED D.R. OF THE REVENUE PLACED RELIANCE ON A JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF CIT VS. RAVINDRA NATHAN NAIR, 295 ITR 228. 10. W E HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE INVOLVED IS REGARDING COMPUTATION OF DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 80HHC. WHILE MAKING THIS COMPUTATION OF DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 80HHC, THE ASSESSING OFFICER HAS EXCLUDED EXCHANGE FLUCTUATION INCOME OF RS.25,51,469/ - . THE ASSESSING OFFICER HAS ALSO EXCLUDED RS.41,55,388/ - BEING INTEREST INCOME AND AN AMOUNT OF RS.6,48,557/ - WAS ALSO EXCLUDED BEING MISC. RECEIPT. THE CIT(A) HAS DECIDED ALL THE SE ISSUES IN FAVOUR O F THE ASSESSEE. 11. REGARDING THE FIRST ISSUE I.E. REGARDING EXCHANGE FLUCTUATION GAIN OF RS.25,51,469/ - , W E ARE OF THE CONSIDERED OPINION THAT DEFINITELY , EXCHANGE FLUCTUATION GAIN IN RESPECT OF REALIZATION OF EXPORT PROCEEDS OF CURRENT YEARS IS TO BE INCLUDED IN THE PROFIT OF THE BUSINESS OF THE PRESENT YEAR AND SAME IS ALSO TO BE INCLUDED IN THE EXPORT TURNOVER AND TOTAL TURNOVER OF THE PRESENT YEAR BUT IF SUCH EXCHANGE FLUCTUATION GAIN IS IN RESPECT OF EXPORT OF ANY EARLIER YEAR THEN THE SAME CAN NE ITHER BE INCLUDED IN THE BUSINESS PROFIT OF THE PRESENT YEAR NOR IT CAN BE INCLUDED IN THE EXPORT TURNOVER AND TOTAL TURNOVER. THE SAME SHOULD RELATE BACK TO THE YEAR OF EXPORT AND IN THAT YEAR , IT SHOULD BE INCLUDED IN BUSINESS PROFIT AS WELL AS EXPORT T URNOVER AND TOTAL TURNOVER. SINCE THE FINDING OF CIT(A) IS NOT ON THIS LINE, WE FEEL THAT THE ORDER OF CIT(A) ON THIS ISSUE IS NOT SUSTAINABLE. IN OUR CONSIDERED OPINION, THIS ISSUE SHOULD GO BACK TO THE FILE OF CIT(A) FOR FRESH DECISION IN 6 THE LIGHT OF ABOVE DISCUSSION. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE TH IS MATTER TO HIS FILE FOR FRESH DECISION IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. FIRST ISSUE BEING GROUND NO. 2 IS ALLOWED FOR STATISTICAL PURPOSES. 12. REGARDING THE SECOND ISSUE BEING INTEREST INCOME OF RS.41,55,388/ - , WE FIND THAT THE JUDGMENT S OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF JYOTI APPARELS (SUPRA) AND IN THE CASE OF S HRI RAM HONDA POWER EQUIP & ORS (SUPRA) ARE SQUARELY APPLICABLE. IN THE LATEST CASE, IT WAS HELD BY HON'BLE DELHI HIGH COURT THAT INTEREST EARNED ON FDR EVEN FOR THE PURPOSE OF AVAILING CREDIT FACILITIES FROM BANK DOES NOT HAVE IMMEDIATE NEXUS WITH THE EXPORT BUSINESS AND TH EREFORE, IT HAS TO BE NECESSARILY TREATED AS INCOME FROM OTHER SOURCES AND NOT BUSINESS INCOME. HENCE, RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BLE DELHI HIGH COURT, WE HOLD THAT INTEREST INCOME IN THE PRESENT CASE CANNOT BE TREATED AS BUSINESS PROFIT FOR THE PURPOSE OF COMPUTING DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 80HHC. ACCORDINGLY, GROUND NO. 3 IS ALLOWED. 13. NOW WE DEAL WITH GROUND NO. 4 OF THE REVENUE I.E. REGARDING MISC. RECEIPT. WE FIND THAT ALTHOUGH IT WAS THE CLAIM OF THE ASSESSEE THAT MISC. RECEIPT IS ON ACCOUNT OF SALE OF SCRAP ETC. AND TAX WAS PAID THEREON BUT IT IS NOTED BY THE ASSESSING OFFICER ON PAGE NO. 7 OF THE ASSESSMENT ORDER THAT AS PER THE RECONCILIATION OF THE SALES WITH SALES TAX ORDER, IT WAS FOUND THAT RS.8,75,170/ - IS O F THE NATURE WHICH WAS NOT SUBJECTED TO SALES TAX. ONLY TO THIS EXTENT, IT WAS HELD BY THE ASSESSING OFFICER THAT THE MISC RECEIPT IS TO BE TREATED TO BE OF THE NATURE AS ENVISAGED IN CLAUSE (BAA) OF SECTION 80HHC. ON THIS ASPECT, THE CIT(A) HAS HELD IN PARA 55 THAT EXCESS EXPORT PROCEEDS FROM BUSINESS OPERATIONS OF RS. 5,70,303/ - AND REBATES AND DISCOUNTS ALLOWED BY VARIOUS PARTIES RS.78,254/ - TOTAL RS.6,48,557/ - SHOULD NOT BE 7 CONSIDERED FOR EXCLUSION UNDER CLAUSE (BAA) OF SECTION 80HHC. WE DO NOT FIND ANY BASIS IN THIS DECISION OF CIT(A) BECAUSE THIS IS NOT CLEAR AS TO WHAT IS THE NATURE OF THIS EXCESS EXPORT PROCEEDS FROM BUSINESS OPERATIONS AND REBATES AND DISCOUNTS ALLOWED BY VARIOUS PARTIES. HENCE, ON THIS ASPECT ALSO, WE ARE OF THE CONSIDERED OPINION THAT THE ORDER OF CIT(A) IS NOT SUSTAINABLE. WE REVERSE THE ORDER OF CIT(A) ON THIS ISSUE ALSO AND RESTORE THAT OF THE ASSESSING OFFICER. GROUND NO. 4 IS ALLOWED. 14. GRO UND NO. 5 & 6 ARE GENERAL AND DO NOT CALL FOR ANY SEPARATE ADJUDICATION. 15. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED IN THE TERMS INDICATED ABOVE. 16. NOW WE TAKE UP THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2003 - 04 I.E. I.T.A. NO.764/LKW/2010 . IN ITS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. BECAUSE THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN HOLDING THAT DUTY DRAW BACK AMOUNTING TO RS.1,86,38,381/ - (RS.75,37,462 / - RELATING TO P.U. UNIT AND RS.1,10 ,00,919/ - RELATING TO SHOE DIVISION II) AS HAD BEEN RECEIVED BY THE 'APPELLANT' DURING THE YEAR, CANNOT FORM PART OF THE 'ELIGIBLE PROFIT' FOR THE PURPOSE OF RELIEF UNDER SECTION 80 IB OF THE 'ACT', 2. BECAUSE AS PER THE SCHEME FORMULATED BY THE CENTRAL GOVERNMENT FOR PROMOTION OF EXPORT, THE DUTY DRAW BACK RECEIVED BY THE 'APPELLANT' WAS NOTHING BUT REIMBURSEMENT OF PART OF COST INCURRED BY IT IN MANUFACTURING OF GOODS AND ACCORDINGLY THE SAME WAS LIABLE TO BE TREATED AS INCREMENTAL TO PROFIT AS DERIVED FROM THE 'INDUSTRIAL UNDERTAKING' SO AS TO BE ELIGIBLE FOR RELIEF UNDER SECTION 80 IB OF THE 'ACT'. 8 3. BECAUSE THE APPELLANT'S CLAIM FOR RELIEF UNDER SECTION 80IB IS FULLY COVERED BY THE CIRCULARS NO.564 AND 571 DATED 5.7.1990 AND 1.8.1990 RESPECTIVELY, A S ISSUED BY THE CBDT TO CLARIFY AND REMOVE THE RIGORS OF LAW AND THE AUTHORITIES BELOW WERE OBLIGED UNDER THE LAW TO COMPUTE RELIEF ADMISSIBLE TO THE APPELLANT UNDER SECTION 80IB, ON THE BASIS OF THE SAID CIRCULARS. 4. BECAUSE THE APPELLANT'S CLAIM FOR RE LIEF UNDER SECTION 80IB, AS PER THE COMPUTATION GIVEN BY IT, CANNOT BE SAID TO BE DEFEATED EVEN BY THE DECISION OF HON'BLE APEX COURT IN THE CASE OF LIBERTY INDIA VS. CIT IN (2009) 317 ITR 218, AS HAS BEEN REFERRED TO AND RELIED UPON BY THE 'CIT(APPEALS)'. 5. BECAUSE IN ANY CASE AND WITHOUT PREJUDICE TO THE CONTENTIONS RAISED IN THE FOREGOING GROUNDS NO. 1, 2, 3 & 4 ABOVE, FOR THE PURPOSES OF EXCLUSION FROM ELIGIBLE PROFIT, ONLY SUCH AMOUNT OF 'DUTY DRAW BACK' SHOULD HAVE BEEN CONSIDERED AS ARRIVED AT AFTE R ADJUSTING THE EXPENSES INCURRED IN EARNING SUCH 'DUTY DRAW BACK'. 6. BECAUSE ALTERNATE CLAIM FOR RELIEF UNDER SECTION 80HHC WAS LIABLE TO BE CONSIDERED AND ALLOWED WITH REFERENCE TO THE INCOME EARNED, WITHOUT ANY ADJUSTMENT ON ACCOUNT OF 'DUTY DRAW BACK ' AS RECEIVED BY THE 'APPELLANT' AND NOT EVEN BY THE NET AMOUNT OF 'DUTY DRAW BACK' (AS ARRIVED AT AFTER CONSIDERING THE EXPENDITURE INCURRED IN EARNING THE SAME). 7. BECAUSE THE 'CIT(APPEALS)' ERRED IN LAW AND ON FACTS IN NOT ALLOWING THE BENEFIT OF EXEM PTION WHILE COMPUTING THE DEDUCTION UNDER SECTION 80HHC ON RS.2,26 , 613/ - MADE UP AS UNDER: - (I) SCRAP SALES OF MINI BOILER : RS. 90 , 000 (II) OTHER MISC. RECEIPTS : RS.1 , 36 , 613 BY INVOKING CLAUSE (BAA) OF SUB - SECTION 4B OF SECTION 80HHC , EVEN AFTER HOLDING THAT THE SAID RECEIPTS ARE OF THE NATURE OF 'BUSINESS RECEIPTS'. 9 8. BECAUSE THE 'CIT(A)' HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT 'THE CONDITIONS LAID DOWN IN THE INCOME - TAX ACT FOR ALLOWANCE OF DEDUCTION U/S. 80HHC IN RESPECT OF DFRC AND DEPB LICENSE' AND DISALLOWING A SUM OF RS.97,91,896/ - MADE UP AS UNDER: - (I) PROFIT ON SALE OF DEPB LICENSES : RS.34,45,877 (II) PROFIT ON SALE OF DFRC LICENSES : RS.22,31,605 (III) LICENSES CONSUMED BY THE ASSESSEE : RS.28,28 , 592 (IV) INCREASED LICENSES IN HAND : RS.12,85,822 WHILE COMPUTING THE DEDUCTION UNDER SECTION 80HHC OF THE 'ACT' AND UPHOLDING THE EXCLUSION MADE BY THE ID. 'ASSESSING OFFICER'. 8.1 BECAUSE, THE PROFIT ON DEPB LICENSES IN HAND OR LICENSES USED FOR SELF CONSUMPTION, CANNOT BE BROUGHT UNDER THE WORD 'TRANSFER' AND THUS PROVISIONS OF SECTION 28(IIIAD) AND 28(IIIE) OF THE 'ACT', SO THE RECEIPT AMOUNTING TO RS.41,14,414 (RS.28,28,592 BEING LICENSES CON SUMED BY THE ASSESSEE RS. 12,85,822 / - BEING INCREASED LICENSES IN HAND) SHOULD NOT BE EXCLUDED FOR THE PURPOSES OF COMPUTATION OF DEDUCTION UNDER SECTION 80HHC. 9. BECAUSE EXCLUSION OF THE SAID SUM OF RS.97,91,896/ - FROM THE COMPUTATION OF ELIGIBLE PROFIT IS CONTRARY TO THE LETTER AND SPIRIT OF LAW AND THE SAME IS EVEN VIOLATIVE OF THE WELL LAID RULE OF CONSTRUCTION, TO THE EFFECT THAT 'BENEFICIAL PROVISIONS SHOULD BE CONSTRUED LIBERALLY''. 10. BECAUSE THE 'APPELLANT' CRAVES FOR AND BEGS FOR LEAVE TO ADD, DELETE, ALTER, SUBSTITUTE OR MODIFY ANY OR ALL THE GROUNDS OF APPEAL AT ANY SUITABLE TIME. 11. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 17. IT WAS FAIRLY AGREED BY BOTH THE SI DES THAT THE ONLY ISSUE INVOLVED I N THIS APPEAL REGARDING ALLOWABILITY OF DEDUCTION U/S 80IB OF THE ACT IN RESPECT OF DUTY DRAW BACK AMOUNTING TO RS.1,86,38,381/ - IS SQUARELY COVERED 10 AGAINST THE ASSESSEE BY THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN TH E CASE OF LIBERTY INDIA VS COMMISSIONER OF INCOME - TAX [2009] 317 ITR 218 (SC) . SINCE THE ISSUE IS COVERED AGAINST THE ASSESSEE, WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE . 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. 19. IN THE COMBINED RESULT, APPEAL OF THE REVENUE IS ALLOWED AND APPEAL OF THE ASSESSEE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 8 /11/2014 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR