2013 (10) TMI 1356 - AT - Income Tax

Eligibility of duty draw back for the computation of deduction u/s 10B allowed. Provisions of section 10B are different from the provisions of section 80IA wherein no 77 formula has been laid down for computing the eligible business profit.

Summary

Issues involved:
1. Eligibility of duty draw back for the computation of deduction u/s 10B of the Income Tax Act, 1961.

Detailed Analysis:

1. Adjournment sought by revenue: The revenue in this case sought adjournment, but the issue in dispute was found to be covered in favor of the assessee by a Special Bench decision of ITAT. The adjournment application was rejected, and the facts of the case were discussed with the representatives of both parties. The assessee, an exporter, had claimed a deduction u/s 10B of the Act, including an amount received as duty draw back from the Govt. of India. The Assessing Officer questioned this inclusion, but the assessee argued that duty draw back was part of export profits with a direct nexus to exports. The Assessing Officer, however, excluded the amount from exempt income based on previous cases and court decisions.

2. Appeal before Ld CIT(A): The assessee appealed before the Ld CIT(A), who deleted the disallowance based on the submissions made. The Ld CIT(A) relied on the Special Bench decision of ITAT in a similar case. The Ld DR supported the Assessing Officer's order, while the Ld AR supported the Ld CIT(A)'s order.

3. ITAT Decision: The ITAT heard both parties and reviewed the material on record. The only issue in dispute was the eligibility of duty draw back for deduction u/s 10B. The ITAT found this issue to be covered in favor of the assessee by the Special Bench decision in a specific case. The ITAT referred to the statutory provisions and explained that once an income forms part of the business of the eligible undertaking, it should not be excluded from eligible profits for computing the deduction u/s 10B. The ITAT highlighted the distinction between sections 10B and 80HHC regarding the computation of eligible profits.

4. Conclusion: The ITAT dismissed the appeal filed by the revenue, stating that the facts and circumstances of the present case aligned with the Tribunal's previous order. The ITAT upheld the Ld CIT(A)'s decision based on the legal provisions and precedents cited. The order was pronounced on a specific date in 2013.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive understanding of the case and the reasoning behind the decision.