TMI Blog2012 (8) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... - ITAT MUMBAI ) - assessee are allowed for statistical purposes. - ITA no.4488/Del/2007 & ITA no.1710 /Del/2008 - - - Dated:- 28-5-2012 - SHRI R.P. TOLANI, SHRI A.N. PAHUJA, JJ. Assessee by Shri R.K. Mehra,AR Revenue by Smt . Surjani Mohanty, DR O R D E R A.N.Pahuja:- These two appeals filed by the assessee -one on 14.11.2007 for the AY 2003-04 against an order dated 11.9.2007 another on 5.5.2008 for the AY 2004-05 against an order dated 3rd March, 2008 of the learned CIT(A)- Karnal, raise, inter alia, grounds relating to claim for deduction u/s 80HHC of the Income-tax Act,1961[hereinafter referred to as the Act] in relation to the DEPB amount 2. Facts, in brief, as per relevant orders are that the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the deduction. 3. On further appeal by the Revenue, Hon ble Jurisdictional High Court vide their order dated 31st January, 2011 in I.T.A. no.522 of 2011 for the AY 2004-05 and ITA no. 678 of 2010 for the AY 2003-04 restored the matter to the Tribunal for fresh decision in accordance with law in the following terms:- 3. Learned counsel for the appellant states that the matter is covered in favour of the revenue by orders of this Court dated 16.08.2010 in I.T.A. No.301 of 2010 CIT Vs. M/s Victor Forgings and I.T.A. No.299 of 2010 CIT Vs. F.C. Sondhi, wherein after noticing the judgment of the Bombay High Court in CIT Vs. Kalpataru Colours Chemicals 2010 (42) DTR 193, the matter was remanded to the Tribunal for fresh decision in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sale consideration. It was 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, the Hon ble High Court concluded. On appeal by the assessee , Hon ble Apex Court set aside the aforesaid judgment of Hon ble Bombay High Court while concluding as under: 14. We are, thus, of the considered opinion that while the face value of the DEPB will fall under clause (iiib) of Section 28 of the Act, the difference between the sale value and the face value of the DEPB will fall under clause (iiid) of Section 28 of the Act and the High Court was not right in taking the view in the impugned judgment that the entire sale proceeds of the DEPB re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , where the DEPB accrues to the assessee in the first previous year and the assessee transfers the DEPB certificate in the second previous year, as appears to have happened in the present batch of cases, only ninety per cent of the profits on transfer of DEPB covered under clause (iiid) and not ninety per cent of the entire sale value including the face value of the DEPB will get excluded from the "profits of the business". Thus, where the ninety per cent of the face value of the DEPB does not get excluded from "profits of the business" under Explanation (baa) and only ninety per cent of the difference between the face value of the DEPB and the sale value of the DEPB gets excluded from "profits of the business", the assessee gets a bigger f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 10 crores during the previous year, after giving effect to the first proviso, the export profits are to be increased further by the amount which bears to ninety per cent of any sum referred to in clauses (iiid) and (iiie) of Section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee. The third proviso to sub-section (3) states that in case of an assessee having export turnover exceeding Rs. 10 crores, similar addition of ninety per cent of the sums referred to in clause (iiid) of Section 28 only if the assessee has the necessary and sufficient evidence to prove that (a) he had an option to choose either the duty drawback or the Duty Entitlement Pass Book Scheme, being the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court, therefore, was not right in coming to the conclusion that as the assessee did not have the export turnover exceeding Rs. 10 crores and as the assessee did not fulfil the conditions set out in the third proviso to Section 80HHC (iii), the assessee was not entitled to a deduction under Section 80HHC on the amount received on transfer of DEPB and with a view to get over this difficulty the assessee was contending that the profits on transfer of DEPB under Section 28 (iiid) would not include the face value of the DEPB. It is a well-settled principle of statutory interpretation of a taxing statute that a subject will be liable to tax and will be entitled to exemption from tax according to the strict language of the taxing statute and i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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