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2012 (9) TMI 253

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..... 1571,1572 & 1573/Kol/2010 - - - Dated:- 22-6-2012 - Shri Mahavir Singh, Shri C.D.Rao, JJ. For the Appellant: Shri A.K.Pramanik, Sr.DR For the Respondent: Shri M.P.Thard Shri J.M.Thard ORDER Per Bench The above three appeals are filed by the Revenue against order dated 19.02.2010 of the ld. CIT-(A)-XIII, Kolkata pertaining to A.Yrs. 2000-01, 2001-02 2002-03 respectively. 2. There is a delay of 76 days in filing of the appeals by the Revenue for which the revenue has filed a condonation petition explaining the reasons for such delay. After considering the submissions by the Revenue the delay is condoned. 3. At the time of hearing the Bench pronounced as under :- Delay condoned. Revenue s appeal is dismis .....

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..... st as follows : Recast P L A/c for 1999-2000 To Opening stock Rs.3,82,49,692/- By Sales Rs.21,13,14,718/- To Purchase and expenses Rs.20,59,78,589/- By Liability Written back Rs. 2,42,376/- To Depreciation as per Companies Act Rs. 48,45,378/- By Closing Stock Rs.3,98,68,892/- To Face value of DEPB Sold (as cost) Rs.1,16,26,387/- By Face value of To Profit Rs.1,51,69,599/- By Face value of DEPB appln. made During the year [u/s.28(iiib)] Rs.1,18,36,016/- By sale of DEPB During the year Rs.1,23,06,217/- By Duty Drawback Rs. 3,01,426/- .....

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..... rts decision the face value of DEPB claimed is to be taken as income u/s 28(iiib)]. Therefore 28(iiib) income + 28(iiic) income = Rs.1,18,36,016/-+Rs.3,01,426/- = Rs.1,21,37,442/- Profit to be increased by [90% x 1,21,37,442 x 21,13,14,718/-] 22,36,20,925 8) Total profit derived from exports = (6) + (7) Rs.29,11,233 9) Deduction u/s 80HHC [100% of (8)] Rs.29,11,233/- 9.4. Thus the total income of the assessee will be computed as follows : Gross Total Income (as in 9.2 above) Rs.36,92,620/- Less : Ddn. u/s 80HHC (as in 9.3 above) .....

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..... under :- It will be clear from the provisions of s. 28 that under cl. (iiib) cash assistance (by whatever name called) received or receivable by any person against exports under any scheme of the Government of India is by itself income chargeable to income-tax under the head Profits and gains of business or profession . DEPB is a kind of assistance given by the Government of India to an exporter to pay customs duty on its imports and it is receivable once exports are made and an application is made by the exporter for DEPB. Therefore, there is no doubt that DEPB is cash assistance receivable by a person against exports under the scheme of the Government of India and falls under cl. (iiib) of s. 28 and is chargeable to income-tax under .....

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..... of acquiring the import license is nil. The cost of acquiring DEPB, on the other hand, is not nil because the person acquires it by paying customs duty on the import content of the export product and the DEPB which accrues to a person against exports has a cost element in it. Accordingly, when DEPB is sold by a person, his profit on transfer of DEPB would be the sale value of the DEPB less the face value of DEPB which represents the cost of the DEPB. The High Court has failed to appreciate that DEPB represents part of the cost incurred by a person for manufacture of the export product and hence even where the DEPB is not utilized by the exporter but is transferred to another person, the DEPB continues to remain as a cost to the exporter. W .....

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..... of the DEPB, the DEPB will be business profits under cI. (iiib) and the difference between the sale value and the DEPB (face value) would be the profits on the transfer of DEPB under cl. (iiid) for the same assessment year. Where, however, the DEPB accrues to a person in one previous year and the transfer of DEPB takes place in a subsequent previous year, then the DEPB will be chargeable as income of the person for the first assessment year chargeable under cl. (iiib) of s. 28 and the difference between the DEPB credit and the sale value of the DEPB credit would be income in his hands for the subsequent assessment year chargeable under cl. (iiid) of s. 28. The interpretation suggested above, therefore, does not lead to double taxation of th .....

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