Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2016 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (3) TMI 753 - HC - Income TaxDeduction u/Sec. 80-IB - DEPB/duty draw back benefits - Held that:- On perusal of Sec. 80-IB, in our view, it postulates that the deduction u/Sec. 80-IB is available to the eligible industrial undertaking where the gross total income of the eligible assessee includes any “profits and gains derived from any eligible business” referred to in the section (emphasis supplied). What has to be seen is “derived from” and not “attributable to”. The expression “derived from” is restrictive as against “attributable to”, which is wider. There should be immediate nexus and not distant nexus. In our view DEPB/duty draw back benefits do not form part of net profit of undertaking as they are not derived from the eligible business but are incentives under a particular scheme. - Decided against assessee Trading addition - AO applied a certain percentage while making trading addition rejecting books of accounts u/Sec. 145(3) and applied the GP Rate of 20% on the total turnover as disclosed by the assessee. The CIT(A) on a further appeal by the assessee applied a GP Rate of 15% - Held that:- Tribunal, taking into consideration the judgment rendered by this Court in the case of CIT Vs. Gotan Lime Khaniz Udyog (2001 (7) TMI 19 - RAJASTHAN High Court ) has held that the books of accounts have been maintained in proper manner and deleted the addition and in our view, we find no perversity in the order of the Tribunal in deleting the tradition addition as even otherwise it is a finding of fact based on the material on record and there can be no hard and fast rule of increasing the GP Rate over the years. - Decided in favour of the assessee. Disallowance of duty draw back consultancy charges - While the AO held that it is capital expenditure in nature and it has enduring effect, however, both i.e. the CIT(A) as well as the Tribunal came to the conclusion that it is revenue in nature - Held that:- The finding of the Tribunal that it is not in the nature of enduring effect, is just and proper, the finding of fact recorded by both the appellate authorities is that the consultancy charges have to be paid on account of duty draw back received by the assessee which is to the extent of 1% or 1.5% and this has been paid on year to year basis. When this is a finding of fact recorded by the appellate authorities that these are the consultancy charges on account of receipt of duty draw back and is being paid on annual basis, in our view, it is certainly not in the nature of capital expenditure and has rightly been held to be expenditure, revenue in nature and thus allowable. Thus, both the questions are answered against the revenue and in favour of the assessee.
|