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2013 (4) TMI 661 - AT - Income TaxExport incentives Duty Drawback/DEPB u/s 80lB - denial of claim placing reliance on Liberty India vs. CIT [2006 (9) TMI 487 - PUNJAB & HARYANA HIGH COURT] - Held that:- The judgment of Liberty India has been upheld by the Hon'ble Supreme Court (2009 (8) TMI 63 - SUPREME COURT) considering the ratio of its own judgment in the case of Sterling Foods (1999 (4) TMI 1 - SUPREME Court), Ritesh Inds. Ltd. (2004 (9) TMI 36 - DELHI High Court) and CIT vs Lakhwinder Singh (2007 (7) TMI 302 - PUNJAB AND HARYANA HIGH COURT) to held that section 80-IB provides for allowing a deduction in respect of profits and gains derived from the eligible business. Import of the words "derived from" is narrower as compared to that of the words "attributable". Thus DEPB/Duty Drawback benefits did not form part of net profit of eligible industrial undertaking for the purposes of section 80-I/80-IA/80-IB - in favour of the revenue. Whether disclosures of income can be said to be derived from business for the purposes of computation of deduction u/s 80-IB - assessee voluntarily surrendered additional income of Rs.15 lakh for taxation on account of difference in stock, cash and unexplained investment in factory building - Held that:- Amount of surrender was due to valuation difference as accepted by AO and it was specifically stated that this was not unexplained investment u/s 69. A bare perusal of the assessment order shows that it was on estimate basis on GP rate of earlier years. It is nothing but business profit, hence it was derived from business and deduction u/s 80-IB should be granted on the same. In favour of assessee. Additions made u/s 69 related to the difference in cash and undisclosed income - Held that:- The assessee has not explained as to how these unexplained items have a nexus with the business of the assessee. As the assessee has not discharged the burden of proof that these items were received from business, the assessee is not eligible for deduction u/s 80-IB. In favour of the revenue.
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