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2006 (5) TMI 122 - AT - Income TaxDeduction u/s 80HHC - reference to DEPB - Profits Of The Business - HELD THAT:- In our considered view, the view expressed by the AO that the sale of DEPB licences having taken place in the subsequent year, the assessee was not justified in reflecting the sale proceeds in the year under appeal and claiming deduction u/s 80HHC in respect of the same is correct. We, however, agree with the alternative contention advanced on behalf of the, assessee that the said amount has got to be excluded from the sale proceeds also and to be excluded from the profits and gains of the business reflected by the assessee. The Accounting Standard AS-12, in our view, is not applicable in respect of the sale of DEPB licences in the subsequent year. The assessee had received the licences in the year under appeal but the same had been sold in the subsequent year and accordingly the income relating to such transaction is assessable in the subsequent assessment year. The AO is accordingly directed to rework the deduction u/s 80HHC after excluding the sale proceeds of DEPB licences from the turnover as well as from the profits of the business. We direct accordingly. In the result, the appeal of the Revenue are partly allowed.
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