2010 (7) TMI 1073 - AT - Income Tax

Summary

Issues involved: Appeal against order allowing deductions for advance license benefits and Duty Free Replenishment Certificate receivable.

Deductions for advance license benefits and DFRC:
The appeal was filed by the revenue against the order allowing deductions for advance license benefits and Duty Free Replenishment Certificate (DFRC) receivable by the assessee. The Tribunal considered the issue in question based on previous cases and held that the benefits did not accrue to the assessee until the raw material imported was consumed. Citing a previous decision, it was concluded that the value of import entitlement receivable could not be treated as income accrued in the relevant year. Therefore, the Tribunal upheld the order of the first appellate authority, dismissing the appeal.

Conclusion:
The Tribunal dismissed the appeal and upheld the order of the first appellate authority regarding the deductions for advance license benefits and Duty Free Replenishment Certificate receivable by the assessee. The decision was based on the principle that the benefits did not accrue until the raw material imported was consumed, in line with previous case law.