9911796707
TMI Blog2011 (12) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... be excluded, not the total amount received by the assessee ? We had issued notice dated 16.11.11, in view of the fact that the sole issue involved was covered by the decision of Division Bench of this Court. In response to such notice for final disposal, Mr.Tushar Hemani appears for the assessee. Both the sides have been heard. On duly considering the submissions and the material placed before us, it can be seen that the question proposed herein is identical to the question adjudicated by this Court earlier in Tax Appeal No.507 of 2010 and allied appeals wherein the controversy was as to what extent the benefit of DEPB upon sale of credit by the assessee is eligible for deduction under section 80HHC of the Income Tax Act, 1961. Wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee while computing the book profits under section 115J of the Act. It was on this background, the Calcutta High Court has observed as under: 10A. If we compare the language employed in sub-section (iiia) with which we are concerned in the present case with the next two sub-sections, i.e. (iiib) and (iiic) as indicated above, it will appear that while in case of sub-section (iiia, it is the profit on actual sale of licence that will be chargeable to tax but in the cases covered by sub-sections (iiib) or (iiic), cash assistance (by whatever name called) received or receivable by any person against export or any duty of customs or excise repaid or repayable as drawback to any person against exports are chargeable to tax. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment. Such raw material was for the purpose of manufacturing high protein food. Such raw material was received under an agreement with the Government of India, under which the Government of India undertook to arrange for the raw material under the aegis of UNICEF. As against the supply of raw material free of cost, the assessee undertook to the Government a corresponding obligation under the agreement to supply free of cost to the Government as a matching contribution a specified quantity of weaning food at a price not exceeding 10 per cent profit over the cost of production. It was on this background that the Division Bench observed that where the grant is coupled with a liability to a matching contribution, its acceptance by itself cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g procedures primarily because such accounting difficulties or adjustment of entries would not be the conclusive indication of true interpretation that the section may present. Secondly in the case of Liberty India (supra), the Apex Court has also examined the nature of accounting treatment such a sale of DEPB credit should receive, portion of which we have already reproduced herein-above. 44. In the result, we find that the Tribunal committed an error in coming to the conclusion that on transfer of DEPB credit by an assessee only the amount in excess of the face value thereof would form part of profit as envisaged in clause (iiid) of section 28. We, therefore, answer the question in favour of the Revenue and against the assessees. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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