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TMI Blog2014 (8) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... justify the disallowance of CENVAT incentive whilst computing the admissible deduction u/s 80HHC of the Act – no substantial question of law arises for consideration – Decided against Revenue. - Income Tax Appeal No. 435 of 2012 - - - Dated:- 13-8-2014 - S. C. Dharmadhikari And B. P. Colabawalla,JJ. For the Appellant : Mr. Abhay Ahuja For the Respondent : Ms A. Vissanjee with Mr S. J. Mehta JUDGMENT [ Per B.P. Colabawalla J. ] :- 1. This Appeal under section 260A of the Income Tax Act 1961 has been filed by the Commissioner of Income Tax, Central-III, Mumbai challenging the order passed by the Income Tax Appellate Tribunal (hereinafter referred to as the ITAT ) dated 29th July 2011. The Assessment Year in ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead as under :- (A) Whether on the facts and in the circumstances of the case and in law the Hon'ble Tribunal was correct in holding that CENVAT credit is in the nature of credit against excise duty payable and hence business income even while holding that CENVAT incentive is not one of the various export incentives under clauses (iiia) to (iiie) of section 28 of the Income Tax Act 1961 ? (B) Whether on the facts and in the circumstances of the case and in law the Hon'ble Tribunal was correct in holding that the Assessee will be entitled to relief under section 80HHC as CENVAT credit should be considered either as Duty Drawback or an incentive which is not excludable from business profits ? (C) Whether on the facts and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ENVAT incentives are in the nature of export incentives and hence allowed for the purpose of calculating business income whilst calculating a deduction under section 80HHC of the Act. Being aggrieved by the order of the ITAT, the present Appeal has been filed by the Revenue under section 260A of the Act. 4. Mr Ahuja, the learned counsel appearing on behalf of the Appellant, submitted that though CENVAT incentive was in the nature of export incentives, in order that the same qualify for a deduction under section 80HHC, it should be covered under any of the clauses (iiia) to (iiie) of section 28 of the Act. Admittedly, CENVAT incentives were not covered under any of these clauses, is the submission. According to Mr Ahuja, CENVAT incentive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as orders passed by the Assessing Officer, CIT (Appeals) and ITAT. We agree with the submission of Ms Vissanjee that the said CENVAT incentive being the refund of tax and duty paid on inputs consumed for goods manufactured and exported would automatically reduce the cost of manufacture of the exported goods, thereby necessarily increasing the profit. In view thereof, the deemed credit under the CENVAT Incentive Scheme at ₹ 89,34,887/- would be a part of the business profits eligible for a deduction under section 80HHC. Section 80HHC inter alia provides that where an assessee, being an Indian company or a person (other than a company) resident in India, was engaged in the business of export out of India of any goods or merchandise t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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