2008 (12) TMI 37 - HC - Income Tax

Assessee claimed deduction in respect of income from duty drawback u/s 80IB, on sale of replenishment licence and currency fluctuation - claim was disallowed by ITAT on the ground that the said income was not income derived from business undertaking - similar claim for deduction u/s 80 HHC was also disallowed - view taken by the Tribunal is justified and it is in accordance with the view already taken by SC in CIT v. Sterling Foods. and judgment of this Court in Liberty India v. CIT

Summary

Issues:
1. Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal.
2. Entitlement to deduction under Section 80IB for profits related to duty drawback, sale of replenishment licences, and currency fluctuation.
3. Denial of claims under Section 80IB based on previous judgments.
4. Reversal of orders of CIT(A) regarding deduction under Section 80 HHC.
5. Perversity of findings by the ITAT and sustainability in law.
6. Misdirection by the ITAT in deciding eligibility for deduction under Section 80IB.

Analysis:
1. The appellant filed an appeal under Section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal, challenging the disallowance of deduction claimed under Section 80IB for income from duty drawback, sale of replenishment licence, and currency fluctuation. The Tribunal upheld the Assessing Officer's view that the said income was not derived from the business undertaking, citing precedents like CIT v. Sterling Foods and Liberty India v. CIT.

2. The Tribunal's decision was based on the alignment with the previous judgments of the Court. The appellant argued that the Tribunal's denial of the deduction under Section 80IB was not justified, especially in light of the specific nature of the income in question. However, the Court noted that the Tribunal's stance was consistent with the Court's previous rulings on similar matters.

3. The appellant also raised concerns regarding the denial of claims under Section 80 HHC, contending that the Tribunal's decision contradicted the latest judgment of the Apex Court in the case of B.Des Raj Vs. CIT(SC). Despite the appellant's arguments, the Court found no substantial question of law that warranted further consideration.

4. The Court dismissed the appeal, emphasizing that the Tribunal's decision was in line with existing legal interpretations and precedents. The Court found no grounds to challenge the Tribunal's findings, stating that the appellant failed to demonstrate any perversity in the Tribunal's conclusions or any misdirection in its decision-making process regarding the eligibility for claiming deductions under Section 80IB of the Income Tax Act.

In conclusion, the Court affirmed the Tribunal's decision, highlighting the consistency with previous judgments and the lack of substantial legal issues raised by the appellant.