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TMI Blog2011 (11) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... elating to the Assessing Officer to take into account the DEPB income on actual sale basis and not on accrual basis while holding that the assessee is not entitled for deduction under section 80HHC on DEPB/DFRC entitlements is infractuous ? Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by CIT(A) in directing the Assessing Officer to exclude only the net amount of other export entitlements such as Sales Tax and Excise Duty refund for computation of deduction u/s 80HHC of the I.T Act ? . 2. On hearing learned counsel Mrs Mauna Bhatt we had issued notice for final disposal by passing the following order dated 12th October 2011 : Tax Appeal is directed against the decision of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel Mr Saurabh Soparkar appeared on behalf of respondent. On having heard both sides and having considered the fact that the identical question is addressed and concluded by us in Tax Appeal No.507 of 2010 dated 10th August 2011, in the present Tax Appeal the issue proposed requires to be dealt with in the similar manner without giving independent findings. Vital portion of the judgment given in Tax Appeal No. 507 of 2010 is reproduced hereinafter : 1. This group of appeals involves common question of law. In all materials aspects, facts are similar. These appeals, therefore, have been heard together and are being disposed of by this common judgment. 2. Central controversy involved is as to what extent the benefit of DEPB upon sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal. The Tribunal in a detailed judgment considered various aspects including the interpretation of various clauses of section 28, and in particular, clause (iiid) of section 28 and its corelation to section 80HHC of the Act. The Tribunal was of the opinion that face value of the DEPB would be the cost of its acquisition by the assessee. If the assessee sold such DEPB credit at a price higher than the face value, the difference would be the profit of the assessee which would be covered under section 28(iiid) of the Act. It is only this element which to the extent of 90 per cent be excluded for the purpose of working out 80HHC deduction. The Tribunal also referred to explanation (baa) to section 80HHC, by virtue of which, 90% of the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded, not the total amoutn received by he assessee ? 36. On the basis of the above judicial pronouncements and the principles laid down therein, mischief rule can be safely applied in the present case. Prior to introduction of clause (iiid) to section 28, Delhi Bench of the Income Tax Appellate Tribunal, in the case of P G Enterprises Ltd. (supra) had discarded the Revenue s proposition that 90 percent of the DEPB benefits of sale of the credits should be from computation of business profit under clause (baa) to explanation to section 80HHC. In the background of this position, as explained by the Finance Minister in his speech on the floor of the Parliament, clause (iiid) was introduced. From the Finance Minister's speech it clearl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age between clause (iiic) and (iiid) of section 28 of the Act. While in clause (iiic) language used is any duty of customs or excise repaid or repayable as drawback ... whereas in clause (iiid) words used are any profit on transfer of Duty Drawback Pass Book Scheme .... . To our mind this difference in language does not convey intention of the Legislature to treat the two benefits differently. The difference in language appears to be on account of difference in the two schemes while DEPB is freely transferable, Duty Drawback scheme is not. 38. Contention that the Revenue's stand would lead to double taxation is not well founded. None of the assessee's have established before us that out of the total consideration received ..... X X X X Extracts X X X X X X X X Extracts X X X X
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