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2022 (8) TMI 38 - HC - Income TaxDeduction u/s 80HHC with respect to sale of DEPB license - AO while computing the deduction reduced 90% of the sale proceeds of DEPB - HELD THAT - Following the aforesaid decision of the Hon'ble Supreme Court, in and by which, the issue involved herein, has attained finality, the order impugned in these appeals is set aside and the matter is remanded to the assessing officer for computation of the deduction under section 80HHC, in accordance with the afore-referred decision of the Hon'ble Supreme Court in Topman Exports 2012 (2) TMI 100 - SUPREME COURT and after providing an opportunity of hearing to the assessee and passing orders afresh. Such an exercise shall be completed by the assessing officer within a period of three months from the date of receipt of a copy of this judgment
Issues:
Challenge to Income Tax Appellate Tribunal order on deduction under section 80HHC for sale of DEPB license. Analysis: The case involves tax appeals filed by the Revenue against the Income Tax Appellate Tribunal's order related to assessment years 1999-2000 to 2002-03. The primary issue is the computation of deduction under section 80HHC concerning the sale of DEPB license by the assessee. The assessing officer initially reduced 90% of the sale proceeds of DEPB, which the assessee contested, arguing that only 90% of the profits earned on the sale should be reduced. The appellate authority ruled in favor of the assessee, directing the assessing officer to reduce 90% of the profit on the sale of DEPB. However, the Tribunal referred to the decision of the Special Bench in Topman Exports case and remanded the issue for recomputation of the deduction under section 80HHC. The Revenue challenged this decision, citing a pending appeal in the High Court of Mumbai related to the Topman Exports case. The High Court considered the arguments and referred to a decision by the Supreme Court related to the interpretation of section 80HHC. The Supreme Court clarified the provisions of section 80HHC, emphasizing the exclusion of profits derived from the sale of DEPB in certain circumstances. The Court set aside the Tribunal's order and remanded the matter to the assessing officer for computation of the deduction under section 80HHC in line with the Supreme Court's decision in the Topman Exports case. The assessing officer was directed to complete this exercise within three months from the date of the judgment. Consequently, all tax case appeals were disposed of with no costs awarded. In conclusion, the judgment resolved the issue of deduction under section 80HHC concerning the sale of DEPB license by providing clarity on the computation method based on the Supreme Court's interpretation. The decision emphasized the exclusion of profits under specific circumstances and directed the assessing officer to recompute the deduction accordingly, ensuring compliance with the legal provisions.
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