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TMI Blog2009 (11) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the assessee there is none independent application of a judicial mind for arriving of a decision making. 2. a) That the learned CIT(A) is not justified in upholding the assessment order for declining the claim of export incentives Duty Drawback/DEPB u/s 80IB on the ground of placing reliance on the judgement of Hon'ble Punjab Haryana High Court in the case of Liberty India Vs. CIT 207 CTR 243 (P H), whereas the duty drawback received by the appellant is derived from an industrial undertaking as per the genesis of the word derived in its true sense and spirits. b) That the action of CIT(A) is unsustainable in denying the claim of the duty drawback/DEPB, which is having direct nexus and being germane to the business as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are part of export receipts or alternatively they may be reduced from the cost of goods manufactured because it is return of the duty paid, therefore, the assessee claimed deduction u/s 80IB on the amount of duty drawback and DEPB also. The AO disallowed the claim of the assessee by relying on the decision in the case of CIT Vs. Sterling Foods 237 ITR 579 (SC), CIT Vs. Ritesh Industries 274 ITR 324 (Delhi) and other decisions and held that the duty drawback and DEPB are not the income derived from the business income which is eligible for deduction u/s 80IB. By the impugned order, the CIT(A) confirmed the action of the AO by relying on the decision of Hon'ble Jurisdictional High Court in the case of Liberty India, order dated 22.9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey, physical inventory of stock were prepared. Certain discrepancies were found in the stock and the assessee surrendered additional income of ₹ 40 lakhs for taxation on account of difference in stock. The AO treated the said surrender as income from other sources and therefore did not allow claim of deduction u/s 80IB on such income. The CIT(A) also confirmed the action of the AO. 9. It was argued by the learned AR that assessee was only having income from the industrial undertaking, the excess stock found during the course of survey was procured only out of profit earned from industrial undertaking, therefore deduction u/s 80IB is to be allowed on such surrendered income. He further contended that the claim is for allowance of 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r which reads as under:- Survey u/s 133A(1) was conducted by the Income-tax Department on our business premises today i.e. 9.3.2005. Inventory of stocks in the premises was prepared and the same was valued with our help. The stocks as per books of accounts and as per inventory is as under: Stock as per books of accounts 161805-00 As per inventory 4161705-00 Difference in stock 3999900-00 We hereby surrender ₹ 40,00,000-00 on account of excess stock as per physical verification voluntarily and without any pressure or force. The surrender of additional inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven the income from DEPB and duty drawback which are received by the industrial undertaking as an incentive in the course of their business were held to be not eligible for claim of deduction u/s 80IB, nothing is left for granting deduction in respect of such income surrendered during the course of survey which is attributable to the excess stock found during the survey. Nothing was brought on record by the learned AR to show that amount so invested in the excess stock was derived from industrial undertaking. It is not only the income of the business which can be claimed for deduction u/s 80IB but it is only that income which is derived from industrial undertaking and comes within the first degree of nexus between profit and industrial unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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