SHRI NITIN AIMA,SHRINAGAR V. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-3, SRINAGAR

MA 7/ASR/2025

AI Insights

The case revolves around the interpretation of section 10AA of the Income Tax Act, 1961, concerning whether remission of duty drawback qualifies as 'profits and gains of export of articles or things' eligible for exemption. The assessee, Sh. Nitin Aima, argued that the duty drawback received under various government schemes should be considered as export turnover for tax exemption purposes. However, the Tribunal, referencing the Supreme Court's decision in Saraf Exports, concluded that such receipts do not meet the criteria for export turnover as defined under section 10AA. The Tribunal also addressed the assessee's objections regarding the reliance on the Supreme Court's decision, affirming that courts can consider relevant judgments even if not cited by the parties, especially when such judgments are from the Supreme Court and pertain to the principle of stare decisis.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827255 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-01-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 18-04-2025
• Other Referred Cases: M/s Saraf Exports Vs CIT, Jaipur  III
• Laws Referred To: Income Tax Act 1961, Customs Act 1962
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHARAN DASS
• Assessee Lawyers: SANDEEP VIJH
• Keywords: Business income; Capital receipt
• Section: 10; 2; 10AA

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER AND SH. UDAYAN DAS GUPTA, JUDICIAL MEMBER MA No.7/Asr/2025 (Arising out of in I.T.A. No.83/Asr/2020) Assessment Year: 2015-16 Sh. Nitin Aima, Wani Manzil Saidpora Iddah Gah Srinagar Kashmir. [PAN: ACNPA4599D] (Appellant) Vs. ACIT, Circle-3, Srinagar. (Respondent) Appellant by Sh. Sandeep Vijh, CA Respondent by Sh. Charan Dass, Sr. DR Date of Hearing 14.11.2025 Date of Pronouncement 05.01.2026 ORDER Per: Udayan Das Gupta, JM: This miscellaneous application is filed by the assessee on 18th April, 2025 against the order of the tribunal dated 27th February, 2025, and the same is within the stipulated time u/s 254(2) of the Act 61. 2. The only issue in this appeal was whether remission of duty drawback the source of which flows from various Government schemes and / or statutory Printed from counselvise.com MA No.7/Asr/2025 (Arising out of in I.T.A. No.83/Asr/2020) Assessment Year: 2015-16 2 provisions of the Customs Act 62, partake the character of “ profits and gains of export of articles or things” which as per the claim of the assessee is exempted u/s 10AA of the Act 61. 3. The Tribunal while deciding the appeal, has referred to the explanation of “Export Turnover ” as per provisions of section 10AA of the Act , which is already reproduced in paragraph 12 of the Tribunal order dated 27/02/2025 , and has also relied on the decision of the Hon’ble Apex court in the case of M/s Saraf Exports Vs CIT , Jaipur – III , civil appeal No 4822 of 2022 ( SLP (C ) No 17539 of 2016 , order dated 10th April, 2023, where the Hon;ble Court has considered all earlier decisions on the issue of duty draw back and DEPD vis vis provisions of section 28(iiia), ( iiib), (iiic), (iiid), (iiie), of the Act 61, and has laid down the law, that duty draw back constitutes independent source of income beyond first degree nexus between profits and industrial undertakings. 4. Respectfully following the law laid down by the Hon’ble Apex court, the Tribunal has already arrived at a finding in paragraph 13 and 13.1 of the order that, remission of duty draw back, does not fulfil the explanation of “ export turnover” as laid down in the Act 61, within the meaning of explanation 1(a) of section 10AA , which is an all inclusive definition , for all logical purpose and the tribunal has already taken a legal view that it cannot be “considered to be profits and gains derived from the export of articles or things” . Printed from counselvise.com MA No.7/Asr/2025 (Arising out of in I.T.A. No.83/Asr/2020) Assessment Year: 2015-16 3 4.1 Moreover, with reference to the Ld. AR of the assessee , with respect to section 28(iiic) of the Act 61, that income shall be chargeable to income tax under the head “profits and gains of business or profession, the Hon’ble Apex court in paragraph 7.1 of the said order dated 10/04/2023, has observed as follows: “7.1 Thus, as per Sections 28(iiid) and (iiie) any profit on the transfer of the Duty Drawback and on transfer of DEPB Schemes, etc., shall be chargeable to income tax under the head “Profits and gains of business or profession”. It appears that earlier, there used to be a dispute regarding the receipt by way of incentives from the Government being in the nature of cash assistance, duty drawback, profits on transfer of DEPB Scheme, etc., i.e., as to whether these receipts were capital receipt or revenue receipt and would thus, be taxable. However, thereafter, and in order to put an end to the dispute, the legislature by way of inserting clauses 28 (iiia), (iiib), (iiic), (iiid) and (iiie) has made the said incentives taxable under the head of “profits and gains of business and profession.” 5. In this miscellaneous application the assessee has cited numerous decisions of various tribunals, with reference to section 10 A, 10B, 10BA , of the Act 61, where the nature of receipts were different , eg receipts against cancellation of export orders, interest on bank FD, interest on staff loans, etc. and tried to re argue the case, that once an income forms part of the business income, the same Printed from counselvise.com MA No.7/Asr/2025 (Arising out of in I.T.A. No.83/Asr/2020) Assessment Year: 2015-16 4 cannot be excluded from eligible profits for the purpose of computation of deduction, but we are not inclined to accept such contention at this stage because the tribunal has already taken a legal view in the matter following the legal concept laid down by the Hon’ble supreme Court on the nature of duty drawback , in the case of ‘Saraf Exports ( supra ), and the law laid down by the Hon’ble court is binding on us. 6. The assessee has further raised objection to the fact that since the decision of the Apex court in the case of Saraf Exports v CIT (supra) never came up for discussion in course of hearing, the tribunal was not justified in relying on the same because the said judgment was never cited by either of the parties. On this issue we are of the view that courts can rely upon judgments which are not cited, but are relevant to the issue in controversy, more so , when in this case the decision is laid down by the Hon’ble Supreme court , where the principle of stare decisis , enshrined in Article 141 of the Indian constitution , mandates the binding nature of such judgment on all courts, as a matter of judicial discipline regarding its ratio decidendi, and this Tribunal is bound by the same. Moreover, the said decision of the Hon’ble Apex court was available in public domain on the date of hearing of the appeal matter, and as such no prejudice could have been caused to either parties. Printed from counselvise.com MA No.7/Asr/2025 (Arising out of in I.T.A. No.83/Asr/2020) Assessment Year: 2015-16 5 6.1 Moreover, we also note that no mistake in the Tribunal order dated 27th February, 2025 , as such, has been pointed out by the assessee and this miscellaneous application seeks a review of the tribunal order , specially the legal view taken by the tribunal in the matter of “duty drawback” vis a vis explanation of “export turnover” within the provisions of section 10AA of the Act 61, but the power of review does not lie with the Tribunal. 7. As such we are of the opinion that this MA is devoid of merits and the same is dismissed. Order pronounced on 05.01.2026 under Rule 34(4) of the Income Tax Appellate Tribunal Rules 1963. Sd/- Sd/- (Manoj Kumar Aggarwal) (Udayan Das Gupta) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order Printed from counselvise.com "