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TMI Blog2014 (1) TMI 1596X X X X Extracts X X X X X X X X Extracts X X X X ..... e following questions of law :- 1. Whether on the facts and circumstances of the case and in law the Hon'ble ITAT was justified in setting aside the issue and remitting to the CIT (A) for adjudication de novo without appreciating the fact that the case is squarely covered by the decision of Hon'ble Supreme Court in the case of Liberty India Vs. CIT [317 ITR 218 (SC)] ? 2. Whether on the facts and circumstances of the case and in law the Hon'ble ITAT was justified in not following a binding precedent that was squarely applicable to the case before it ? The issue before the Tribunal was whether or not the Commissioner (Appeals) was justified in declining a deduction under Section 80 IB of the Income Tax Act 1961 in respect of a duty drawba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be calculated by taking into account the deemed import content of the export product as per basic customs duty and special additional duty payable on such deemed imports. Therefore, in our view, DEPB/Duty drawback are incentives which flow from the Schemes framed by Central Government or from Section 75 of the Customs Act, 1962, hence, incentives profits are not profits derived from the eligible business under Section 80-IB. They belong to the category of ancillary profits of such undertakings. 17. The next question is - what is duty drawback? Section 75 of the Customs Act, 1962 and section 37 of the Central Excise Act, 1944, empower Government of India to provide for repayment of customs and excise duty paid by an assessee. The ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t these receipts have no first degree nexus with the business activity of the industrial undertaking. There is still a room for the consideration of the plea that but for the duty drawback, the assessee would not have carried out the business activity in the industrial undertaking, because, that would have meant carrying out business for incurring losses. If that be so, the duty drawback receipts cannot be said to be 'not direct but only incidental' income, an 'independent source of income' or 'ancillary profit of the industrial undertaking. It is also important to bear in mind the fact that the very distinguished Hon'ble Justice, who authored judgment in Liberty India's case (supra), also dismissed special leave petition against the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. ................" On this reasoning, the Tribunal held that adjudication by it "is certainly not the end of the road but when the matter travels to higher forum it would certainly appropriate that all the relevant facts are before Their Lordships". On this ground, the Tribunal remitted the matter to the file of the CIT (A) for adjudication de novo in the light of its observations. We find merit in the contention of the Revenue that what the Tribunal has done constitutes a dereliction of its bounden obligation to follow the binding precedent of the Supreme Court. Article 141 of the Constitution provides that law declared by the Supreme Court shall be binding on all Courts within the territory of India. In our view, the judgment of the T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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