2017 (9) TMI 526 - AT - Income Tax

Disallowance of claim of deduction under section 80HHC of DEPB profit - Held that - We find that this issue is clearly covered by the decision of Hon ble Bombay High Court in the case of CIT vs Kalpataru Colours and Chemicals (2010 (6) TMI 63 - BOMBAY HIGH COUR) and also followed by Mumbai Tribunal 2013 (8) TMI 1049 - ITAT MUMBAI whereby Tribunal has directed the AO to recompute the deduction under section 80HHC of the Act in respect of DEPB profit in the light of judgement of Hon ble Supreme Court in the case of M/s Topman Exports (2012 (2) TMI 100 - SUPREME COURT OF INDIA ) As the issue is covered, we also directed the AO to recompute the deduction in respect of DEPB profit and accordingly, the assessee s appeal is allowed

Summary

Issues:
1. Condonation of delay in filing appeal.
2. Disallowance of claim of deduction under section 80HHC of DEPB profit.

Detailed Analysis:
1. Condonation of Delay:
The appeals arose from orders of CIT(A)-XX & CIT(A)-31, Mumbai, related to assessments for A.Ys. 2003-04 & 2002-03 framed by ACIT, Mumbai under section 143(3) and 154 of the Income Tax Act, 1961. The counsel for the assessee contended that the appeal was time-barred by 2216 days due to various reasons, including reliance on advice from a tax consultant. The Tribunal noted that the delay was condoned in a similar case by the Kolkata Bench and found the circumstances identical, thus allowing the appeal of the assessee.

2. Disallowance of Deduction under Section 80HHC:
The issue revolved around the disallowance of the claim of deduction under section 80HHC of DEPB profit by the AO and CIT(A) applying the third proviso to section 80HHC of the Act. The assessee raised grounds challenging the treatment of DEPB as 'cash assistance' and cited relevant legal precedents. The Tribunal referred to the decision of the Bombay High Court in a similar case and directed the AO to recompute the deduction under section 80HHC in respect of DEPB profit in line with the judgment of the Supreme Court. The Tribunal allowed the assessee's appeal, as the issue was covered by legal precedents. In a similar appeal by Revenue, the Tribunal dismissed the appeal, affirming the order of CIT(A) and allowing the deduction.

In conclusion, the Tribunal allowed the assessee's appeal regarding the delay in filing the appeal and the disallowance of the claim of deduction under section 80HHC of DEPB profit. The Tribunal's decision was based on legal precedents and relevant provisions of the Income Tax Act, leading to the dismissal of Revenue's appeal.