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TMI Blog2012 (9) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the submissions by the Revenue the delay is condoned. 3. At the time of hearing the Bench pronounced as under :- "Delay condoned. Revenue's appeal is dismissed in all the appeals. Pronounced in open court. Detailed order will follow." Now the detailed order is as follows: 4. In all the three appeals of the revenue the only effective ground raised by the revenue is as under :- "Ld.CIT(A) erred in deleting the disallowance of deduction u/s 80HHC relying on the decision of M/s.Topman Export Vs ITO [318 ITR (AT) 87] since the Hon'ble Mumbai High Court in the case of M/s.Kalpataru Colors & Chemicals has reversed the decision [ITA No.2887 of 2009 dated 29/06/2010]." 5. For the sake of convenience we will deal with ITA No.1571 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 3,01,426/- Total Rs.27,58,69,645/- Total Rs.27,58,69,645/- 9.2. The business profit as per I.T.Act will be computed as follows :- Business profit as above Rs.1,51,69,599/- Add: Depreciation as per Companies Act Rs. 48,45,378/- Rs.2,00,14,977/- Less : Depreciation as per I.T.Act Rs.1,63,22,357/- (Rs.91,44,909(current depr.)+Rs.71,77,448 B/f depr.) Total Business Profit Rs. 36,92,620/- 9.3. Now on the basis of the above recast P & L A/c. the deduction u/s 80HHC will be computed, as per the decision of Topman Exports, in the following manner : 1) Total turnover Rs.22,36,20,935/- (Rs.21,13,14,718/- + Rs.1,23,06,217/- (DEPB sale proceeds) As per Topman Exp. Decision. 2) Export turnover Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er directed the AO to call for the record from assessee and verify these amounts and if any variation is found in these figures the recomputation described in paras 9.1. to 9.4 shall be changed accordingly while giving effect to the appellate order. 5.4. Aggrieved by this now the revenue is in appeal before us by stating that the decision of Special Bench in the case of Topman Exports vs ITO has been set aside by Hon'ble Mumbai High Court in the case of M/s.Kalpataru Colors & Chemicals as reported in 42 DTR (Bom) 193. Therefore the revenue preferred appeal for all the three Assessment years. 6. At the time of hearing both the parties have fairly conceded that now the Hon'ble Supreme Court has set aside the order of Hon'ble Bombay High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the transaction. 'Profits', therefore, imply a comparison of the value of an asset when the asset is acquired with the value of the asset, when the asset is transferred and the difference between the two values is the amount of profit or gain made by a person. As DEPB has direct nexus with the cost of imports for manufacturing an export product, any amount realized by the assessees over and above the DEPB on transfer of the DEPB would represent profit on the transfer of DEPB. Thus, while the face value of the DEPB will fall under cl. (iiib) of s. 28, the difference between the sale value and the face value of the DEPB will fall under cl. (iiid) of s. 28 and the High Court was not right in taking the view in the impugned judgment that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offered to tax in the year in which the credit accrued to the assessee as business profits, then any further profit arising on transfer of DEPB would be taxed as profits of business under s. 28(iiid) in the year in which the transfer of DEPB took place. This view of the High Court is contrary to the language of s. 28 under which "cash assistance" received or receivable by any person against exports such as the DEPB and "profit on transfer of the DEPB" are treated as two separate items of income under cls. (iiib) and (iiid) of s. 28. If accrual of DEPB and profit on transfer of DEPB are treated as two separate items of income chargeable to tax under cls. (iiib) and (iiid) of s. 28, then DEPB will be chargeable as income under cl.. (iiib) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay High Court in the case of CIT vs M/s.Kalpataru Colors & Chemicals as reported in 42 DTR 195 and CIT -vs- King Metal Works 235 CTR 234. 7.2. Keeping in view of the above Hon'ble Apex Court's decision (supra), we are of the view that the grounds taken by the revenue is not sustainable. It is further observed that ld. CIT(A) has directed the AO to call for the record from assessee and verify these amounts and if any variation is found in these figures the recomputation described in paras 9.1. to 9.4 shall be changed accordingly while giving effect to the appellate order. Therefore, in our considered opinion we find no infirmity in the orders of ld. CIT(A) to be interfered with. Therefore we confirm the same and dismiss the appeals of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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