2011 (2) TMI 1586 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A)-IV, Ahmedabad for assessment year 1998-99 regarding non-grant of deduction u/s 80IA on export incentives, including sale of import licence, duty draw back, and DEPB licence sale.

Grounds raised in the appeal: Four grounds raised in the appeal relate to denial of deduction u/s 80IA on export incentives like sale of import licence, duty draw back, and DEPB licence sale in the original assessment order u/s 143(3).

Background: ITAT previously directed the assessing officer to decide afresh on the treatment of export incentives for deduction u/s 80IA based on a co-ordinate Bench judgment. Assessing officer repeated denial of deduction in a subsequent assessment, with CIT(A) allowing deduction only on duty draw back.

Arguments: Assessee's representative argued that incentives are covered as business income and entitled to deduction u/s 80IA. Contended that assessing officer's jurisdiction in set aside proceedings is limited to ITAT's directions, citing relevant case laws. However, Revenue's representative relied on a recent Apex Court judgment in Liberty India Ltd case to support denial of deduction.

Decision: ITAT dismissed the appeal, holding that DEPB and duty draw back are incentives not derived from eligible business under section 80IA, as per the law laid down by the Supreme Court. The judgment of the Apex Court prevails over previous directions of the ITAT, and the appeal was decided against the assessee.

Conclusion: The appeal was dismissed by ITAT, upholding the denial of deduction u/s 80IA on export incentives like sale of import licence, duty draw back, and DEPB licence sale, based on the recent judgment of the Apex Court.