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TMI Blog2012 (12) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... k under the first proviso to Section 80HHC (3) in the same proportion as the export turnover bears to the turnover of the business carried on by the assessee. This is another way to look at the controversy and resolve it. - Deduction allowed - Decided in favor of assessee. - ITA Nos.201, 207, 228 and 419 of 2009 - - - Dated:- 5-12-2012 - MR. S. RAVINDRA BHAT AND MR. R.V. EASWAR JJ. Appellant: Mr. N.P. Sahni, Senior Standing Counsel with Mr. Ruchesh Sinha, Advocate. Respondent: Mr. S. K. Aggarwal, Advocate. R.V. EASWAR, J. These are appeals filed under Section 260A of the Income Tax Act, 1961 ( Act ) by the Revenue. On 28th September 2010, the following substantial question of law, common to all the appeals, was framed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct nexus with the cost of imports made by an exporter for manufacturing the export products. The neutralization shown of the cost of custom duty under the scheme, however, is by granting a duty credit against the export product and this credit can be utilized for paying customs duty on any item which is freely importable. The DEPB credit is transferable by the exporter. It was held that the DEPB credit is cash assistance receivable by a person against exports under the scheme of Government of India and falls under clause (iiib) of Section 28 of the Act and is chargeable to tax under the head Profits and gains of business or profession even before it is transferred by the assessee. Once it is transferred, the surplus or profit received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back for consideration under the provisos to Section 80HHC (3). Under the first proviso, 90% of the DEPB credit will be added back to the profits of the business in the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee. Having referred to the fact that the DEPB credit was utilized by the assessee itself in its business and was not transferred by it, the provisions of clause (iiid) are not attracted and, therefore, the second, third and fourth provisos to Section 80HHC (3) are not attracted to the assessee's case. The Assessing Officer is, accordingly, directed to re-compute the deductions under Section 80HHC, in so far as the DEPB credit is concerned, in accordance with the law as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits. The further argument is that the last part of the clause should be read ejusdem generis with the first part which refers to various clauses of Section 28 and the contention is that the receipt by way of proceeds of SIL being of a similar nature to the receipts enumerated in the first part of the clause under the various clauses of Section 28, 90% of such proceeds is also to be excluded from the assessed profits. When it comes to the adding back under the proviso to Section 80HHC (3), it is the contention of the Revenue is that since the proceeds of sale of SIL do not specifically fall under any of the five enumerated clauses of Section 28, the excluded profit cannot be added back to the profits under the provisos. The net effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other receipt of a similar nature included in such profits , the receipts talked about should be taken to be brokerage, commission, interest, rent and charges. The words any other receipt cannot jump the specific receipts mentioned immediately before them and go back to the first part of the clause which contains references to various clauses of Section 28. In other words, we have to read the entire group of words or of any receipts by way of brokerage, commission, interest, rent, charges or any other receipts of a similar nature included in such profits contiguously with the result that the other receipt from which 90% thereof can be reduced would only refer to receipts of a nature similar to receipts by way of brokerage, commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de (Development and Regulation) Act 1992. Section 28 (iiia) brings the profits of sale of license granted under the Imports (Control) Order, 1995, made under the Imports and Exports (Control) Act, 1947, to charge under the head business . The Imports and Exports Control Act, 1947 stood repealed on the enactment of Foreign Trade (Development and Regulation) Act of 1992. Under Section 8 of the General Clauses Act, 1897 where any Central Act made after the commencement of the General Clauses Act, repeals and reenacts, with or without modification, any provision of the former enactment, then references in any enactment or in any instrument to the provisions, so repealed shall, unless a different intention appears, be construed as references ..... X X X X Extracts X X X X X X X X Extracts X X X X
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