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2015 (6) TMI 851 - AT - Income TaxReopening of assessment - while calculating deduction allowable under section 80HHC the turnover of 80IB unit was not included which resulted into under assessment of income - Held that:- Since we have upheld that the first contention that the total turnover would include turnover of 80IB unit, hence, the AO had reasons to believe that the income of the assessee had escaped assessment, hence, reopening of the assessment is held to be valid. - Decided against assessee. Reducing the receipts of DEPB from deduction claimed under section 80IB - computation of deduction under section 80HHC and chargeability of income in relation to export incentives received by the assessee in the form of DEPB - Held that:- The cost of customs duty is neutralized under the DEPB scheme, by granting a duty credit against the export product and this credit can be utilised for paying customs duty on any item which is freely importable. DEPB is 'cash assistance' receivable by a person against exports under the scheme of the Government of India and falls under Section 28(iiib) of the Act. Accordingly, DEPB is chargeable to income tax under the head 'Profits and Gains of Business or Profession' even before it is transferred by the taxpayer. Under Section 28(iiid) of the Act, any profit on transfer of DEPB is chargeable to income tax under the head 'Profits and Gains of Business or Profession' as an item separate from cash assistance under Section 28(iiib) of the Act. The face value of the DEPB will fall under Section 28(iiib) of the Act, the difference between the sale value and the face value of the DEPB will fall under Section 28(iiid) of the Act. The cost of acquiring DEPB 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, we direct the Assessing Officer to make assessment a fresh on this issue in view of the law laid down by Hon'ble Bombay High Court in the case of Vijaya Silk House (2012 (9) TMI 263 - BOMBAY HIGH COURT ) and further, if need be, as per the law laid down by Hon'ble Supreme Court in the case of Topman Exports (2012 (2) TMI 100 - SUPREME COURT OF INDIA ). - Decided in favour of assessee for statistical purposes.
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