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2016 (1) TMI 579 - HC - Income TaxDEPB income - whether eligible as a deduction u/s 80HHC being an export incentive granted for promotion of export? - Whether the Taxation Amendment Act, 2005 introduced with effect from 1.4.1998 can be used to deny a benefit accruing to the assessee on account of incentives earlier granted and whether the amendment would be hit by the principle of Promissory estoppel? - Held that:- The Tribunal held that as per clause (iiid) and (iiie) of Section 28 of the Act, any profit on transfer of DEPB scheme was to be considered as profits and gains of business or profession. It was further noticed that an assessee having export turnover exceeding ₹ 10 crores, the profits computed under sub-section (3) of Section 80HHC of the Act shall be further increased by amount which bears to 90% of the sum referred in clause (iiid) and (iiie) of Section 28 of the Act, the same proportion as the export turnover bears to the total turnover. Accordingly, the Assessing Officer was directed to re-compute the deduction under Section 80HHC as amended by Taxation Laws (Amendment) Act, 2005 with retrospective effect from 1.4.1998. Since, the matter has been remitted back to the Assessing Officer for recomputation, therefore, question Nos. do not survive for consideration. Exclusion of FDR interest from the business income under section 80HHC - Held that:- Tribunal had concluded that interest on Fixed Deposits had accrued on the fixed deposits pledged with FCI and also with the Sales Tax Department. The interest on FDRs did not have an immediate nexus with the export business and, therefore, had to be necessarily treated as income from other sources and not business income derived from export business activity. Once that was so, question is decided against the assessee.
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