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TMI Blog2017 (8) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... B are different from the provisions of section 80IA wherein no 77 formula has been laid down for computing the eligible business profit. Thus question is answered, in affirmative and in favour of the assessee. Accordingly, the assessee is eligible for claim of deduction on export incentive received by it in terms of provisions of section 10B(1) read with section 10B(4) of the Act. - I.T.A .No. 4322/DEL/2014 - - - Dated:- 10-7-2017 - SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER For The Appellant : Sh. R. S. Singhvi, CA For The Respondent : Sh. Arun Kumar, Sr. DR ORDER PER SUCHITRA KAMBLE, JM The appeal is filed by the Revenue against the order dated 9/6/2014 passed by CIT(A)- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranted a status of 100% Export Oriented Undertaking w.e.f. 3/10/2007. During the year under consideration, the assessee company has claimed deduction u/s 10B of the IT Act amounting to ₹ 83,97,846/-. The Assessing Officer noticed that the assessee also claimed receipt of duty drawback of ₹ 58,99,364/- as deduction. Accordingly, the Assessing Officer held that duty drawback receipts are not eligible for deduction u/s 10B of the IT Act, 1961 and thus, duty drawback ₹ 58,99,364/- claimed as deduction u/s 10B was added back in the total income of the assessee. 5. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee by following the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he undertaking from export. The formula is as under Profit of the business of the Undertaking Export turnover X Total turnover of business carried out by the undertaking 79. Thus, sub-section (4) of section 10B stipulated that deduction under that section shall be computed by apportioning the profits of the business of the undertaking in the ratio of turnover to the total turnover. Thus, not-with-standing the fact that sub-section (1) of section 10B refers the profits and gains as are derived by a 100% EOU, yet the manner of determining such eligible profits has been statutorily defined in sub-section (4) of section 10B of the Act. As per the formula stated above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer himself, there is no dispute that both these incomes have been treated by the Assessing Officer as business income. The CBDT Circular No. 564 dated 5th July, 1990 reported in 184 ITR (St.) 137 explained the scope and ambit of section 80HHC and the mode of determination of profits derived by an assessee from the export of goods. I.T.A.T., Special Bench in the case of International Research Park Laboratories vs. ACIT, 212 ITR (AT) 1, after following the aforesaid Circular, held that straight jacket formula given in sub-section (3) has to be followed to determine the eligible deduction. The Hon'ble Supreme Court in the case of ;-P.R. Prabhakar; 284 ITR 584 had approved the principle laid down in the Special Bench decision in In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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