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TMI Blog2019 (8) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 80IB of the Act. At the relevant point of time, the decision in Jameel Leathers and Uppers held the field. This decision was clearly against the assessee. It is not the case of the assessee that they distinguished this decision before the Assessing Officer, he had considered the grounds raised by them and then granted the benefit of deduction under Section 80IB of the Act. Therefore, before us the assessee cannot contend that the Assessing Officer took note of the fact that the decision in Jameel Leathers and Uppers was distinguished by the Tribunal in the case of P.S.Apparels. In the absence of any finding to the said effect in the assessment order, we cannot be called upon to infer that the Assessing Officer did so. Major claim for deduction under Section 80IB was relating to the duty drawback receipts. Therefore, the Assessing Officer having not applied his mind to the said issue, it would be too late for the assessee to now contend that the Assessing Officer had adopted the decisions which were in favour of the assessee at the relevant time. In the case of M/s.Sakthi Footwear, this Court held that the mandate of law in Section 80IB of the Act is that unless the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T.C.A.No.764 of 2009 and the other common order dated 02.02.2009 impugned in the other tax case appeals. 2.We have heard Mr.R.Sivaraman, learned Counsel for the appellants/assessees and Mr.T.R.Senthil Kumar, learned Senior Standing Counsel and M/s.K.G.Usharani, learned Junior Standing Counsel for the respondent/revenue. 3.First we take up for consideration Substantial Question of law No.3, as to whether the Tribunal was right in holding that duty drawback receipt cannot be construed as profits derived from an industrial undertaking eligible for deduction under Section 80IB of the Act. This question has been answered against the assessee by the Hon'ble Supreme Court in the case of Liberty India vs. Commissioner of Income Tax [(2009) 183 Taxman 349(SC)]. The issue which fell for consideration before the Hon'ble Supreme Court was whether profit from Duty Entitlement Passbook Scheme (DEPB) and Duty Drawback Scheme could be said to be profit derived from the business of the Industrial Undertaking eligible for deduction under Section 80IB of the Act. The question was answered against the assessee with the following reasons: 16.D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,91,583/- includes duty drawback receipt of ₹ 1,33,44,053/-. The assessment order having been brought to the notice of CIT(A), it was opined that the deduction under Section 80IB of the Act on the duty drawback receipt is not correct and not as per the provisions of the Act and therefore held that the assessment order passed under Section 143(3) of the Act dated 30.08.2005 is erroneous and prejudicial to the interest of revenue warranting remedial action under Section 263 of the Act. 6.Based on such information, the CIT(A) issued notice dated 07.12.2007 proposing withdrawal of deduction under Section 80IB on the duty drawback receipt which was allowed by the Assessing Officer. The assessee was directed to furnish their objections to the proposed action. The objections raised by the assessee were two fold. Firstly on the merits of the matter stating that there is a direct nexus between the business of the industrial undertaking and the receipt of the duty drawback to come to the conclusion that duty drawback is derived from the business of the industrial undertaking. The assessee can no longer putforth such a submission in the light of the law laid down in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2000) 109 Taxman 66 (SC)], the Hon'ble Supreme Court held that the phrase prejudicial to the interest of the revenue under Section 263 of the Act has to be read in conjunction with the expression erroneous order passed by the Assessing Officer. It was pointed out that every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the revenue. By way of illustration, it was pointed out that when the Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of revenue unless the view taken by the Income Tax Officer is unsustainable in law. The decision in the case of Malabar Industries Co. Ltd. was followed in the case of Max India Ltd. Therefore, we are to consider as to whether there were two views possible when the Assessing Officer completed the assessment and granted the benefit of deduction under Section 80IB of the Act. On a reading of the assessment order dated 24.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 TTJ (Chennai) 29 on the ground that the decision did not consider the duty drawback receipts but deals with Section 80J and 80H, wherein the wordings are different. It is further submitted that the decision of the Delhi Tribunal in Deputy Commissioner of Income Tax vs. Eltek SGS (P) LTd. [(2006) 10 SOT 178 (Del)] was in favour of the assessee and this decision was subsequently confirmed by the High Court of Delhi in Commissioner of Income Tax vs. Eltek SGS (P) LTd. [(2008) 300 ITR 6 (Del)] and therefore the Assessing Officer was justified in granting the deduction on the duty drawback receipt. It is further submitted that apart from that there were other decisions of the Delhi Tribunal in the case of Metro Tyres, a decision of the Mumbai Tribunal in the case of Anil L.Shah and the decision of the Ahmedabad Special Bench in the case of Nirma Industries. Thus, it is the submission of the learned counsel that the power under Section 263 of the Act could not have been invoked by the CIT(A). 11.As pointed out by us earlier, there is no indication in the assessment order that the Assessing Officer considered the assessee's entitlement for deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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