The ACIT, Mehsana Circle, Mehsana V. M/s. Jyot Overseas Pvt.Ltd., Mehsana

ITA 86/AHD/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8880 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-05-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 09-01-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Keywords: Business income
• Section: 80IB; 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI T.K. SHARMA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO.86/AHD/2009 & 87/AHD/2009 (ASSESSMENT YEAR:- 2002-03 & 2005-06) THE ACIT, MEHSANA CIRCLE., MEHSANA V/S JYOT OBERSEAS PVT. LTD. 11, VIDHYANAGAR TWIN BUNGLOW, NAGALPUR, MEHSANA. [APPLICANT] [RESPONDENT] APPLICANT BY :- SHRI C K MISHRA, SR. DR RESPONDENT BY:- NONE O R D E R PER N.S. SAINI (ACCOUNTANT MEMBER) : THESE APPEALS FILED BY THE REVENUE IN ITA NOS.86/AHD/2009 AND 87/AHD/2009 FOR THE ASSESSMENT YEAR 2002-03 AND 2005-06 RESPECTIVELY WERE DECIDED BY THE TRIBUNAL V IDE ITS CONSOLIDATED ORDER DATED 15.05.2009. THE REVENUE FILED MISCELLANEOUS A PPLICATION IN RESPECT OF DECISION OF THE TRIBUNAL IN GROUND NO.1 RELATING TO DEBP RECEIPTS. VIDE ORDER OF EVEN DATE THE TRIBUNAL RECALLED ITS ORDER IN RESPEC T OF THE ABOVE ISSUE IN BOTH THE YEARS. 2. GROUND NO.1 OF THE APPEAL OF THE REVENUE IN ITA NOS.86/AHD/2009 AND 87/AHD/2009 READS AS UNDER:- ITA NO.86/AHD/2009 1. THE LEARNED CIT(APPEALS) HAD ERRED IN LAW AND O N FACTS IN DELETING THE ADDITION OF RS.13,83,936/- MADE ON ACC OUNT OF DISALLOWANCE OF DEDUCTION UNDER SECTION 80IA OF THE INCOME TAX ACT, 1961 ON SALE OF DEPB LICENSE TO THE TUNE OF RS.38,4 3,675/-. ITA NO.87/AHD/2009 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND O N FACTS IN DELETING THE ADDITION OF RS.77,064/- MADE ON ACCOUN T OF DISALLOWANCE OF DEDUCTION U/S.80IA OF THE INCOME TAX ACT, 1961 O N SALE OF DEBP LICENSE. 2 3. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IB BY INCLUDING DEBP RECE IPT IN ITS BUSINESS INCOME ON THE GROUND THAT THE SAME IS DERIVED FROM THE IND USTRIAL UNDERTAKING. THE LEARNED ASSESSING OFFICER DISALLOWED THE CLAIM OF T HE ASSESSEE ON THE GROUND THAT THE SAME WAS NOT DERIVED FROM THE INDUSTRIAL U NDERTAKING. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE. BEING AGGRIEVED BY THE SAID ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE REVENUE IS IN APPEAL BEFOR E US. 4. WE FIND THAT THE ISSUE OF ALLOWANCE OF DEDUCTION UNDER SECTION 80IB ON DEBP RECEIPTS WAS DECIDED BY THE HON'BLE SUPREME CO URT IN THE CASE OF LIBERTY INDIA VS. CIT (2009) 317 ITR 218 (SC), ON 3 1.08.2009 IN FAVOUR OF THE ASSESSEE, WHEREIN IT WAS HELD AS UNDER :- DEPB/DUTY DRAWBACK ARE INCENTIVES WHICH FLOW FROM THE SCHEMES FRAMED BY CENTRAL GOVERNMENT OR FROM S. 75 OF THE C USTOMS ACT, 1962, HENCE, INCENTIVES PROFITS ARE NOT PROFITS DERIVED F ROM THE ELIGIBLE BUSINESS AND THEREFORE, DUTY DRAWBACK RECEIPT/DEPB BENEFITS DO NOT FORM PART OF NET PROFITS OF THE INDUSTRIAL UNDERTAK ING FOR THE PURPOSES OF S. 80-IA OR 80-IB. 5. RESPECTFULLY FOLLOWING THE SAME WE DECIDE THE IS SUE IN FAVOUR OF THE REVENUE AND ALLOW THE GROUND OF THE APPEAL OF THE R EVENUE. 6. IN THE RESULT, THE GROUND OF APPEAL IN BOTH THE YEARS OF APPEAL RELATING TO DEBP RECEIPT FOR PURPOSES OF DEDUCTION UNDER SEC TION 80IB IS ALLOWED IN FAVOUR OF THE REVENUE. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING IN THE PRESENCE OF THE PARTIES ON 05 -03-2010 SD/- SD/- (T.K.SHARMA) JUDICIAL MEMBER (N S SAINI) ACCOUNTANT MEMBER DATE : 05-03-2010 PARAS 3 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS) 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD