2014 (1) TMI 339 - AT - Income Tax

Whether profit upon sale of DEPB license shall be eligible for deduction u/s 80IB - Held that - Following M/s Sarraf Export RIICO Industrial Area Sardarsahar Churu V/s ITO Ward-2 Churu 2014 (1) TMI 319 - ITAT JODHPUR - In view of the newly inserted clause (iiid) in Section 28 of the Act w.e.f. 01-04-1998 - Any profit on the transfer of the Duty Entitlement Pass Book Scheme being the Duty Remission Scheme under the export and import policy shall be entitled to deduction u/s 80IB - Decided in favour of assessee.

Summary

Issues:
Sustenance of disallowance of deduction claimed u/s 80IB of the I.T. Act, 1961 on account of DEPB and Duty Draw Back (DDB).

Analysis:
The appeals were against the order of the Ld. CIT(A)-III, Jaipur concerning the sustenance of disallowance of deduction claimed u/s 80IB of the I.T. Act, 1961 regarding DEPB and DDB. The common issue in all appeals was the same. The counsel for the assessee argued that a similar issue was decided in favor of the assessee by the ITAT Jodhpur Bench in a previous case. The Departmental Representative could not refute this argument. The ITAT considered the submissions and reviewed the material on record. The ITAT noted that a similar issue had been decided by the ITAT Jodhpur Bench in a previous case involving M/s Sarraf Export. The ITAT referred to the amended section of the Act and the decision of the Hon'ble Rajasthan High Court regarding the eligibility of profit from the sale of DEPB license for deduction u/s 80IB. The ITAT also discussed relevant precedents and provisions of the Act.

The ITAT observed that the Assessing Officer had based the impugned order on a judgment that did not consider the amended provision. The ITAT highlighted that the High Court had emphasized the importance of considering amended provisions in judgments. The ITAT referred to a case where the judgment was deemed per incuriam due to not considering relevant provisions. The ITAT also mentioned a similar view taken by the Jodhpur Bench in another case. The ITAT concluded that the issue was debatable, making it ineligible for correction under section 154 of the Act. Citing relevant legal principles, the ITAT held that the deduction was not a glaring mistake and, therefore, could not be rectified. Consequently, the ITAT accepted the appeal of the assessee and set aside the CIT(A)'s finding, allowing the deduction claimed u/s 80IB for DEPB and Duty Draw Back.

In line with the previous decision of the ITAT Jodhpur Bench, the ITAT set aside the orders of the CIT(A) and directed the allowance of the claim for deduction u/s 80IB for DEPB and Duty Draw Back. As a result, the appeals by the assessees were allowed. The order was pronounced in the open court on 17/12/2013.