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2015 (3) TMI 44 - AT - Income TaxExclusion of DEPB from the computation of profit eligible for deduction under section 80 HHC - Held that - As per the judgment of Topman Exports (2012 (2) TMI 100 - SUPREME COURT OF INDIA), only profit on sale of DEPB has to be considered for reduction from business profit and not the entire sale proceeds of DEPB. It was also held that for the purpose of computing profit on sale of DEPB, face value of DEPB should be considered as cost of DEPB. Since this issue was not decided by authorities below in this manner, we set aside the order of CIT(A) on this issue and restore this matter to the file of the AO for fresh decision on this aspect. - Decided in favour of assessee for statistical purposes. Exclusion of Export Incentives & Duty Draw Back from the computation of profit eligible for relief under section 80 IB - Held that - This issue is covered against the assessee by the judgment of Liberty India vs. CIT (2009 (8) TMI 63 - SUPREME COURT) wherein it was held that deduction u/s 80IB is not allowable in respect of export incentive in the form of DDB and DEPB. - Decided against assessee. Computaion of deduction U/s 80HHC - whether is liable to be computed independently without reducing the amount of deduction U/s 80IA - Held that - As decided in assessee's own case in assessment year 2002-03 deduction u/s 80HHC and 80-IB have to be independently computed and they have to be circumscribed by the overall limit as prescribed u/s 80A(2) of the Act only. - Decided against revenue.
Issues Involved:
1. Allowability of deduction u/s 80HHC for export incentive (DEPB) - Assessment Year 2003-04. 2. Allowability of deduction u/s 80IB for export incentives (DDB and DEPB) - Assessment Year 2003-04. 3. Computation of deductions u/s 80HHC and 80IA independently - Assessment Year 2003-04. 4. Allowability of deduction u/s 80HHC for export incentive (DEPB) - Assessment Year 2004-05. 5. Allowability of deduction u/s 80IB for export incentives (DDB and DEPB) - Assessment Year 2004-05. 6. Computation of deductions u/s 80HHC and 80IA independently - Assessment Year 2004-05. Analysis: 1. Allowability of deduction u/s 80HHC for export incentive (DEPB) - Assessment Year 2003-04: The appellant contested the exclusion of DEPB amount from profit eligible for deduction under section 80HHC. The Tribunal referred to the judgment in the case of Topman Exports and directed the matter to be reconsidered by the Assessing Officer in light of the said judgment. Grounds 1 and 2 were allowed for statistical purposes. 2. Allowability of deduction u/s 80IB for export incentives (DDB and DEPB) - Assessment Year 2003-04: The issue was decided against the appellant based on the judgment in the case of Liberty India. The Tribunal upheld the CIT(A)'s decision on this matter, rejecting grounds 3 and 4 of the appeal. 3. Computation of deductions u/s 80HHC and 80IA independently - Assessment Year 2003-04: The Revenue challenged the independent computation of deductions u/s 80HHC and 80IA. The Tribunal relied on previous decisions and held in favor of the appellant, dismissing the Revenue's appeal. 4. Allowability of deduction u/s 80HHC for export incentive (DEPB) - Assessment Year 2004-05: Similar to the issue in Assessment Year 2003-04, the Tribunal directed the matter of DEPB exclusion to be reconsidered by the Assessing Officer in light of the judgment in the case of Topman Exports. Grounds 1 and 2 were allowed for statistical purposes. 5. Allowability of deduction u/s 80IB for export incentives (DDB and DEPB) - Assessment Year 2004-05: Following the judgment in the case of Liberty India, the Tribunal decided against the appellant on this issue, upholding the exclusion of certain sums from profit eligible for relief under section 80IB. Grounds 3 and 4 were rejected. 6. Computation of deductions u/s 80HHC and 80IA independently - Assessment Year 2004-05: The Tribunal, based on previous decisions and consistency in approach, decided in favor of the appellant regarding the independent computation of deductions u/s 80HHC and 80IA. The Revenue's appeal was dismissed. In conclusion, the appeals of the assessee were partly allowed for statistical purposes, while the appeals of the Revenue were dismissed in both assessment years. The Tribunal provided detailed reasoning based on legal precedents and judgments to address each issue effectively.
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