TMI Blog2006 (9) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the facts and circumstances of the case and on interpretation of section 80-IB. the Tribunal is justified in upholding the action of the assessing authority by not allowing deduction under section 80-IB on amount of DEPB and duty drawback being export incentives at 25 per cent. of Rs. 22,70,056 being Rs. 5,67,514 ?" 2 The assessee claimed deduction under section 80-IB in respect of duty drawback amounting to Rs. 1,74,316, which was disallowed by the Assessing Officer on the ground that the said income was not "derived from" the business of the assessee as per requirement of section 80-IB. as held by the hon'ble Supreme Court in CIT v. Sterling Foods [1999] 237 ITR 579. on appeal, the Commissioner of Income-tax (Appeals) allowed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 ITR 516 (P H) and Liberty Shoes Ltd. v. CIT I. T. A. No.140 of 2005 decided on August 17, 2006, [2007] 293 ITR 478 (P H) no substantial question of law arises. It is submitted that the crucial issue was not whether the income of the assessee had the effect of reducing the cost of production, but whether the income was "derived from" the specified business as against the income from any other source, irrespective of the question whether such source was inextricably connected with the business activity of the assessee. It was submitted that the nature of income derived from duty drawback was similar to the nature of income derived by the assessee in Sterling Foods' case [1999] 237 ITR 579 (SC), which was considered by the hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xports processed sea food. By reason of such export, the Export Promotion Scheme applies. Thereunder, the assessee is entitled to import entitlements, which it can sell. The sale consideration therefrom cannot, in our view, be held to constitute a profit and gain derived from the assessees industrial undertaking." 8 We are of the view that for the reasoning adopted by the hon'ble Supreme Court, income of the assessee from duty drawback cannot be held to be income "derived from" specified business. 9 Distinction sought to be made by learned counsel for the assessee, in income derived from duty drawback and sale or import entitlement cannot be accepted as relevant distinction, as the core question before the court was that such incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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