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TMI Blog2016 (9) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... l approach having regard to the facts and circumstances of the case. In these circumstances, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to warrant interference. The Appellate Tribunal has not erred in remanding the matter to the Assessing Officer for determination of the question as to whether the benefit or privilege in the form of advanced licence allotted to the assessee is taxable or not. The question stands answered accordingly, that is, in favour of the assessee and against the revenue. The appeal, therefore, fails and is, accordingly, dismissed. - Tax Appeal No. 57 of 2001 - - - Dated:- 26-4-2016 - Harsha Devani And G. R. Udhwani, JJ. Mr Sudhir M Mehta, Advocate for the Appellant Mr B S Soparkar, Advocate for the Opponent JUDGMENT ( Per : Honourable Ms. Justice Harsha Devani ) 1. This appeal under section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act ) at the instance of the revenue is directed against the order dated 24.7.2000 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench B , (hereinafter referred to as the Tribunal ) in ITA No.1227/Ah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought to be raised as an additional ground of appeal as no such plea was taken in the memorandum of appeal. The learned counsel for the assessee, accordingly, did not contend that the assessee was entitled to deduction under section 80HHC on the sum of ₹ 1,10,56,774/- as alleged export incentive. 5. It was the case of the revenue that the income of ₹ 1,10,56,774/- was computed by the assessee on accrual basis under the mercantile system of accounting followed by it and was credited to the profit and loss account. This was taken as cost and was carried to the closing stock and adjusted against the sale proceeds of goods and licences sold in the next year. According to the revenue, the licence given in the year under consideration was a valuable asset and its value was fixed by the assessee at ₹ 1,10,56,774/- and that the assessee cannot now be permitted to turn around and claim that this was not taxable. It was the case of the revenue that the assessee in the return showed that the above benefit had a value and fixed the same at ₹ 1,10,56,774/- and returned the same as income, therefore, there was now no question of deducting the said amount from the tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant assailed the impugned order by submitting that the Assessing Officer was wholly justified in holding that the duty benefit derived by the assessee on the duty free import falls within the ambit of section 28(iiib) of the Act under the head cash assistance as business receipts and as such, the Tribunal was not justified in not upholding the order passed by the Assessing Officer and remitting the matter to the Assessing Officer to examine the taxability of the value of the advance licence. It was submitted that in the case of M/s. Pratibha Synthetics Ltd., the Tribunal itself has held that duty benefit derived by the assessee on duty free imports falls within the ambit of section 28(iiib) of the Act under the head cash assistance as business receipts and hence, the Tribunal was not justified in not deciding the matter on merits and remitting the matter to the Assessing Officer. 8. On the other hand, Mr. B.S. Soparkar, learned advocate for the respondent assessee submitted that in the present case what the assessee had done was to take up the value of export duty which it was likely to save on export of yarn and dyes and had accordingly, credited such amount in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and that licence was freely transferrable and it had a commercial value which was fixed by the assessee at ₹ 1,10,56,774/-. The amount was also shown as income and this had been the stand of the assessee throughout. The Tribunal noted that it was true that the assessee did show ₹ 1,10,56,774/- as its income but having regard to its working which the Assessing Officer examined in detail, the credited amount cannot be treated as the assessee s income. The Tribunal noted that the Assessing Officer did not record a finding that on export the assessee was given licences which had commercial value of ₹ 1,10,56,774/- and, therefore, the amount was taxable receipt although the question was specifically raised before him. The Assessing Officer referred to assessee s entitlement as advance licence and specifically held that income would accrue to the assessee only on sale of licence under section 28(iiia) of the Act and failed to examine the alternative claim of the assessee that the amount of ₹ 1,10,56,774/- was not a revenue receipt if it does not fall under the three clauses of section 28 of the Act. The Tribunal, therefore, did not think it fit to accept the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer to examine the issue in accordance with law. 12. From the facts as emerging from the record, the assessee had been allotted advance licence under the export scheme in the year under consideration the value whereof as stated by the assessee was ₹ 1,10,56,774/-. While before the Assessing Officer as well as the Commissioner (Appeals), the assessee claimed deduction under section 80HHC with reference to the above amount, claiming that the same was a duty benefit falling within clauses (iiia), (iiib) and (iiic) of section 28 of the Act, subsequently, before the Tribunal the assessee stated that the plea that the sum of ₹ 1,10,56,774/- was cash incentive was factually incorrect. It was, however, claimed that even if it is held that the assessee received the licence under the export scheme, the said licence was a capital receipt and could be taxed only under section 28(iiia) of the Act when the licence is sold. That no licence was sold in the year under consideration and profit from licence was duly shown in the next year. The Tribunal, after discussing the contentions advanced on behalf of the respective parties was of the view that income is to be taxed in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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