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TMI Blog2014 (3) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... ent on the basis of revised return was completed under section 143(3) vide order dated 30.03.2006 and the total income was determined at Rs. 4,16,41,813/-. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A). CIT(A) vide order dated 15.12.2006 partly allowed the Assessee's appeal. Against the order of CIT(A), Department filed second appeal before Hon'ble Tribunal. Tribunal vide order in ITA No. 16/AHD/2007 dated 1.03.2007 set aside the issue to the file of A.O. with a direction to work out profit u/s. 10B of the Act from 1.11.2002. Against the order of Tribunal, Department filed reference before Hon'ble Gujarat High Court interalia disputing the direction of ITAT to A.O. to work out the profits from 1.11.2002 and to grant appropriate relief. Hon'ble Gujarat High Court vide order dated 23.07.2008 in Tax Appeal No. 312/AHD/2008 held that since the matter was remitted to A.O. by ITAT, the appeal of Revenue was not admitted but however the A.O. was directed to consider the entire issue afresh. Pursuant to the direction of High Court, order was passed by A.O. under section 143(3) r.w.s. 254/260B of the Act vide order dated 15.12.2008 and the total income was determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 262 ITR 78, Export incentives, interest, Excise Duty Refund etc. cannot be considered as income derived by 100% Export Oriented Undertaking from the export of article or things and therefore Assessee was not eligible for deduction under section 10B of the Act. He also noted that if the receipts such as DEPB, Duty Draw Back, DEPB difference, excise duty refund and interest is taken out from the income, the income of the Assessee would be negative and hence the Assessee was not entitled for deduction under section 10B of the Act. Apart from the aforesaid, he was also of the view that Assessee was not entitled to deduction under 10B for the reason that the certificate claiming deduction under 10B was submitted by the Assessee along with the revised return and it was defective since the certificate was with reference to A.Y. 04-05. Further as per the revised certificate submitted by the Assessee, the export consideration amounting to Rs. 4.84 crore was unrealized as on 31.03.2003. He also noticed that Assessee had received certificate of 100% Export Oriented Unit (EOU) only on 01.11.2002 and thus the Assessee was not holding status of 100% EOU for the whole year. He accordingly denied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income eligible for deduction u/s 10B, it is pointed out same is not admissible in view of Hon'ble Supreme courts decision in the case of Liberty India vs. CIT 317 ITR 218. ......................... 4.22 Though the judgment has been rendered by the apex court in respect of the eligibility of deduction u/s 80I, 80IA and 80IB of the Act on the incomes like DEPB, Duty drawback etc. yet, it is equally applicable for the deduction u/s 10B of the Act. The language of section 10B is pari materia to the language of sec. 80IA and 80IB. Section 10B of the Act provides that subject to the provisions of this section a deduction of such profit and gains as are derived by a 100% Export Oriented Undertaking from the export of articles or things or computer software for a period of 10 consecutive assessment years....... Further, in order to explain various provisions of the section a parallel has been drawn with the provisions of sec. 80I and 80IA in the section itself. Therefore, it can safely be held that the provisions of sec. 10B even from the procedural point of view are parallel to the provisions of section 80IA of the Act. 4.23 It may be pointed out that all the controversies with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act in respect of Unit-I accordingly. However, while doing so he will keep in mind the decision of Hon'ble Supreme Court in the case of Liberty India (supra) with regard to admissibility of deduction u/s 80IB of the Act on the other incomes as referred to above. 4.27 As regards appellant's claim for deduction u/s 80HHC of the Act it is seen that after the amendment in the section made through Taxation Laws (Amendment) Act, 2005 with retrospective effect 1.04.1992, the appellant is required to fulfill the conditions laid down in fourth proviso below sub-section(3) of the section as its export turnover is Rs. 10 crore during the relevant period. There is nothing on record to show that the appellant has fulfilled the conditions in the proviso as referred to above. Further, assessment order is also silent on this issue. Despite of the fact the directions were made by the Hon'ble High Court and the ITAT to examine the appellant's claim in this regard while making the assessment in pursuance of their directions. In view of this the A.O. is directed to work out the deduction u/s 80HHC if any for the period prior to 1.11.2002 for the eligible profits as per law accordingly. 7. Aggrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 875051 116406183 9. From the aforesaid table, he fairly conceded that income from DPEB Duty Draw Back, DEPB rate difference and duty draw back difference would not be eligible for deduction under 10B in view of the decision of Hon'ble Apex Court in the case of Liberty India vs. CIT 317 ITR 218 (SC). 10. With respect to Excise Duty Refunds and Excise duty income machine, he submitted that the issue is covered in favour of Assessee by the decision of Hon'ble Delhi High Court in the case of CIT vs. Dharam Pal Premchand Ltd. (2009) 317 ITR 353 (Del) and the decision of Ahmedabad Tribunal in the case of ITO vs. Electro Ferro Alloys Ltd. (2012) 25 Taxman.com 458 (Ahd.) Tribunal . 11. With respect to bank interest and interest income, he submitted that the Assessee be allowed the netting of income and for which he placed reliance on the decision in the case of CIT vs. Nirma Ltd. Tax Appeal No. 810/A/2013 order dated 27.01.2014. 12. With respect to exchange rate difference, he submitted that since exchange difference was part of the sale price, the same should be considered as income eligible for deduction under section 10B and for which he placed reliance on the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also reproduced hereinabove. The ld. A.R. has submitted tht the issue with respect to income from DEPB Duty Draw Back, DEPB Duty Draw Back difference are covered against the Assessee in view of the decision of Apex Court in the case of Liberty India (supra). Thus the Assessee would not be eligible for deduction under section 10B on the aforesaid items. 15. With respect to other incomes other than those covered against the Assessee, it is submitted that the same are covered in favour of Assessee by the various decisions cited hereinabove. From the table it is seen that Assessee has bifurcated the income into 2 periods up to the period of granting of EOU status and subsequent to it. We are of the view that these factual aspect needs verification at the end of A.O. We therefore remit the issue to the file of A.O. for fresh examination of the claim of Assessee , the bifurcation of income into 2 periods in the light of the decisions cited by Assessee and thereafter decide the issue as per law and after giving a reasonable opportunity of hearing to the Assessee. The Assessee shall be at liberty to furnish additional evidence before A.O. Thus this ground is allowed for statistical pur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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