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TMI Blog2013 (7) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... laring an income of Rs. NIL through e-filing system. Later on case was selected for scrutiny. During the course of assessment proceedings, the AO noticed that the assessee had export sales only, which amounted to ₹ 9,13,85,670/- and received ₹ 33,06,680/- as duty drawback, which was claimed as exempted being export income. The AO was of the view that the assessee was not entitled to claim deduction u/s 10BA of the Income Tax Act, 1961 (hereinafter referred to be as the Act) on duty drawback as it is not derived from industrial undertaking. Reliance was placed on the decision of Hon'ble Supreme Court in the case of Liberty India Vrs. CIT reported in 317 ITR 218 (SC). 3. Being aggrieved, the assessee carried the matter to the Ld. CIT(A) and the submissions as incorporated in para 2.2 of the impugned order were as under:- 2.2 The Ld. AR objected the above stand of the AO and put forth his arguments in following manner. In this connection we humbly submit that the above case is not applicable in our case due to the following submissions: 1. See Section 10BA special provisions in respect of export of certain articles or things- 1. Subject to the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of exemption u/s 80I/80IA (i.e. 'the profit/gains as are derived from the industrial undertaking') is also incorporated in Section 10BA of the Act, therefore, in my considered opinion, the ruling given in such context towards deduction u/s 80I/80IA is also applicable for the similar matter raised i.r.o. Section 10BA of the Act. Accordingly, the AO's action of apply the judgment of Hon'ble Supreme Court, given in the case of Lovely Exports (supra) on the issue under consideration, is hereby confirmed and the re-computation of deduction claimed u/s 10BA, based on such judgment is also upheld. Consequently, this ground of appeal is rejected. 5. Now the assessee is in appeal. 6. The Ld. Counsel for the assessee at the very outset stated that this issue is squarely covered in favour of the assessee vide order dated 31/01/2013 of ITAT, Jodhpur Bench in the case of M/s Suraj Exports India, Sardarshahar, Churu and others vs. ITO, Ward-2, Churu and others in ITA No. 336/Jodh/2011 and others, the copy of the said order was furnished by the Ld. Counsel for the assessee, which is placed on record. 7. The Ld. D.R. for the revenue supported the order of the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligible articles. Section 28 (iiic), (iiid) and (iiie) provides that these income are profits and gains of business. The said sub-section(4) of Section 10B A is reproduced below:- For the purposes of sub-section (1), the profits derived from export out of India of the eligible articles or things shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things bears to the total turnover of the business carried on by the undertaking. The relevant part of Section 28 reads as under: 28. The following income shall be chargeable to Income-tax under the head profits and gains of business or profession . (iiic) any duty of customs or excise re-paid or re-payable as drawback to any person against exports under the Customs and Central Excise Duties Drawback Rules, 1971; (iiid) any profit on the transfer of the Duty Entitlement Pass Book Scheme, being the Duty Remission Scheme under the export and import policy formulated and announced under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992); (iiie) Any profit on the transfer of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the profits and gains of the business of the undertaking and not from any other business carried on by the assessee. Thus prior to amendment the profits derived from export of articles was meant the amount which bore to the profits of the business, the same proportion as export turnover in respect of such article bear to the total turnover of the business carried on by the assessee, whereas, after the amendment, the profits derived from export of articles or thing means the amount which bears to the profits and gains of the business of the undertaking and not from any other business carried on by the assessee. So, by this amendment only the profits of the business of the undertaking only is to be considered for working out the profits and gains as are derived by an undertaking from export out of India or eligible articles or things. The profits and the gains of the business of the undertaking is to be worked out as per the provisions of Section 28(i). This does not include the profits of items does not include the profits of items under s.s. (iiia),(iiib),(iiic),(iiid) and (iiie) etc. Duty drawback and any profit on transfer of DEPB, Section 28 itself makes it abundantly clear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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