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2011 (2) TMI 925 - ITAT, MUMBAIDisallowance - contribution to organizations of political nature - the AO noticed that in Note 17 to the Accounts that it had been mentioned that the assessee had paid certain contribution to organizations of political nature.- t it is not the case of the assessee that the deduction is being claimed under section 80 GGB of the Act. The assessee claims that it was for the purpose of business but no details whatsoever have been furnished - Decided against assessee. Deduction under section 80-I/80-IA/80-IB - The Hon'ble Court held that DEPB/Duty drawback are incentives which flow from the schemes framed by the Central Government or from section 75 of the Customs Act,1962. Incentive profits are not profits derived from eligible business under section 80-IB : they belong to the category of ancillary profits of such undertaking. Profits derived by way of incentives such as DEPB/Duty drawback cannot be credited against the cost of manufacture of goods debited in the profit and loss account and they do not fall within the expression "profits derived from industrial undertaking" under section 80-IB - Decided against of assessee. Netting of interest income - As per the Hon'ble Court further held that in Shri Ram Honda Power Equip 289 ITR 475 the Delhi High Court has not adequately emphasized the entire rationale for confining the deduction only to the extent of ninety per cent of the excludible receipts and it cannot be followed - Hence, the claim of the Assessee for netting of interest income for exclusion under clause (baa) of Explanation to Sec.80-HHC of the Act, is rejected. Deduction u/s 80HHC - Under section 28(iiid) covers only the "profit" (difference between sale consideration and face value of the DEPB credit) and that the "face value" is assessable u/s 28(iiib) is not correct - The entire amount received on transfer of the DEPB credit is "profits" and falls under s. 28(iiid) - There was no basis or justification for the Tribunal to hold that the face value of the DEPB credit can be reduced from the sale consideration. It is not permissible to bifurcate the proceeds of the DEPB into "face value" and "excess of face value" - The approach of the Tribunal is misconceived and unsustainable. As the assessee had an export turnover exceeding Rs.10 crores and did not fulfill the conditions set out in the third proviso to s. 80HHC (3), it was not entitled to a deduction u/s 80HHC on the amount received on transfer of DEPB - Decided against of assessee.
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