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2014 (9) TMI 1131 - AT - Income TaxDisallowance of claim of deduction u/s.10B in respect of sales tax refund - AO disallowed claim on the plea that the CST refund is not on account of profits and gains derived from EOU export of articles or things - Held that:- In the instant case as per contention of Ld. AR, it appears that assessee has already debited the amount paid under sales tax as its expenses forming part of cost of goods purchased for export, however, subsequently part of such sales tax was refunded which go to reduce the cost of purchases. The corresponding increase in profit due to such refund is eligible for claim of deduction u/s.10B. The sales tax refund is not a separate source of income nor it is the due to any Government policy for paying any incentive. Neither it is export incentive nor any payment under scheme of Government. Therefore, the source of receipt cannot be attributed to such scheme. It is simply refund of excess sales tax paid which has already formed part of cost of purchases. We accordingly, direct the AO to verify as to whether the sales tax refund received by the assessee already formed part of its cost of purchases either during the year under consideration or in earlier years. Accordingly, assessee is directed to furnish details of such payment of sales tax and the year in which it has formed part of its cost of purchase in trading/P&L account. If the AO finds that such sales tax have already been debited in the trading/profit and loss account as a cost of purchases, assessee should be given benefit of deduction u/s.10B with respect to such amount of sales tax refund. Appeal of the assessee is allowed for statistical purposes.
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