2013 (6) TMI 742 - AT - Income Tax

Summary

Issues involved: Appeal against order allowing deduction u/s 10BA for income from DEPB and DDB.

Issue 1 - Deduction u/s 10BA: The Department appealed against the CIT(A)'s decision to allow deduction u/s 10BA for income from DEPB and DDB. The Assessing Officer disallowed the deduction, citing it was not derived from business. The assessee argued that DEPB and duty draw back are part of business income as per Section 28 of the Act and should be allowed for exemption u/s 10BA. The CIT(A) allowed the claim based on a decision by ITAT Jodhpur bench, stating that DEPB and DDB are part of eligible profit derived u/s 10BA.

Issue 2 - Legal Interpretation: The Department contended that the CIT(A) erred in not following decisions of the Hon'ble Supreme Court and in equating provisions of section 10BA with section 80IA. The CIT(A) justified the decision by referring to the ITAT Jodhpur bench's ruling and the applicability of section 28 of the Act to consider DEPB and DDB as business income eligible for deduction u/s 10BA.

Decision: The ITAT Jodhpur bench dismissed the Revenue's appeal, upholding the CIT(A)'s order allowing the deduction u/s 10BA for income from DEPB and DDB. The decision was based on the interpretation of relevant legal provisions and precedents, including the applicability of section 28 of the Act. The appeal was concluded on 26-06-2013.