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TMI Blog2014 (1) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction as claimed – Decided against Revenue. Whether income from duty drawback be excluded from the profits eligible for deduction under Section 80IB – Held that:- Following Liberty India Vs. Commissioner of Income Tax [2009 (8) TMI 63 - SUPREME COURT] - Duty drawback receipt and DEPB benefits do not form part of the net profits of eligible industrial undertakings for the purpose of deduction under section 80- I/80-IA/80-IB of the Income Tax Act - Duty drawback receipt and DEPB benefits are incentives which flow from the Scheme framed by the Central Government or from section 75 of the Customs Act, 1962 - Such incentives profits are not profits derived from eligible business under section 80-IB – Decided against assessee. - Tax Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom duty drawback of Rs.2,40,667/- was excluded from the profits eligible for deduction under section 80IB of the Act and disallowance of Rs.10,638/- was made on account of delayed payment of PF (employees contribution). 2.01. Feeling aggrieved and dissatisfied with the order passed by the AO excluding income from duty drawback of Rs.2,40,667/- from the profits eligible for deduction under section 80IB of the Act and making disallowance of Rs.10,638/- made on account of delayed payment of PF (employees contribution), the assessee preferred an appeal before the CIT(A) and by order dated 15/5/2006, the learned CIT(A) allowed the said appeal and held that duty drawback should be included in the profits eligible for deduction under section 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pective nature, is concerned, at the outset it is required to be noted that as such the assessee deposited the aforesaid amount of Rs.10,638/- towards employees contribution within the grace period under the Provident Fund Act. Considering the fact that the learned tribunal has granted the relief to the issue with respect to the amount of provident fund when the assessee deposited the amount with the department within extended grace period under the Provident Fund Act, it cannot be said that the learned tribunal has committed any error in granting relief which calls for interference of this Court. Under the PF Act, if the assessee was entitled to make payment within the grace period and if within that grace period the amount is deposited, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of deduction under section 80- I/80-IA/80-IB of the Income Tax Act, 1961. It is further observed by the Hon'ble Supreme Court in the said decision that duty drawback receipt and DEPB benefits Are incentives which flow from the Scheme framed by the Central Government or from section 75 of the Customs Act, 1962 and that such incentives profits are not profits derived from eligible business under section 80-IB. It is further observed by the Hon'ble Supreme Court in the said decision that they belong to category of ancillary profit of such undertaking. It is further observed that profits derived by way of incentives such DEPB/Duty drawback cannot be credited against the cost of manufacture of goods debited in the profit and loss account an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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