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Case Laws
Showing 261 to 280 of 938 Records
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2011 (8) TMI 1125
The High Court of Bombay heard a case where the revenue challenged various questions except one related to deduction under Section 80I for an industrial undertaking. The appeal was admitted on the specific question regarding the eligibility of the fifth turbine for the deduction. Mr. Toprani waived service for the respondent.
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2011 (8) TMI 1124
Set off of the dividend income against the speculation loss - “dividend” is placed under the head “Income from other sources” - Held that:- As already reproduced it has been consistently held from material on record that shares were held by the assessee as stockintrade. CIT(Appeals) as well as tribunal therefore, were of the opinion that dividend income was incidental to share business and that therefore, irrespective of provisions contained in Section 56 of the Act and explanation to section 73, loss should be adjusted against such business income.
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2011 (8) TMI 1123
The Appellate Tribunal CESTAT CHENNAI ruled in favor of the assessees, allowing them to avail CENVAT credit of service tax paid on CHA services utilized at the time of export of goods, even if the service was availed after the clearance of finished goods. The decision was based on a previous ruling by the Hon'ble Karnataka High Court.
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2011 (8) TMI 1122
Whether transporters (writ petitioners before the High Court) could only provide luggage space at the rear or the sides of a tourist vehicle as mandated by Rule 128(9) of the Central Motor Vehicles Rules, 1989 [hereinafter referred to as "the Rules"], and no luggage could be carried on the roof of the vehicle?
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2011 (8) TMI 1121
Issues involved:
1. Application of section 50C of the Income-tax Act on sale of plots.
2. Treatment of closing stock of diesel without maintenance of log book/stock book.
Issue 1: Application of section 50C of the Income-tax Act on sale of plots
The appeal was filed by the Revenue against the order of the ld. CIT(A) relating to assessment year 2006-07. The Assessing Officer added an amount u/s 50C of the IT Act due to the difference between the value adopted for stamp duty and the sale value of plots sold by the assessee. The assessee contended that the provisions of section 50C were not applicable as the plots were held as stock-in-trade. The ld. CIT(A) agreed with the assessee, stating that section 50C does not apply when the transfer of immovable property is due to the sale of stock-in-trade. The ITAT upheld the decision, noting that the plots were held as stock-in-trade, and the Assessing Officer had incorrectly applied section 50C. Therefore, ground No. 1 of the appeal was dismissed.
Issue 2: Treatment of closing stock of diesel without maintenance of log book/stock book
The Assessing Officer made an addition to the income of the assessee for the closing stock of diesel, as no log book/stock book was maintained. On appeal, the ld. CIT(A) reduced the addition after considering the bill for diesel purchase and lack of maintenance of log book/stock book. The ITAT found the reduction by the ld. CIT(A) to be fair and reasonable, as the estimation of closing stock without proper records was challenging. The Assessing Officer's addition without basis was deemed improper, and the ITAT upheld the decision of the ld. CIT(A) to reduce the addition. Therefore, ground No. 2 of the appeal was dismissed.
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2011 (8) TMI 1120
Issues: Petitioner sought writ of certiorari to quash order refusing recognition as scientific research association u/s 35(1)(ii) of Income-Tax Act, 1961.
Summary:
The petitioner institution applied for recognition as a scientific research association under Section 35(1)(ii) of the Income-Tax Act, 1961. The petitioner's counsel argued that despite subsequent amendments to rules and regulations, the core objective of scientific research remained unchanged, and therefore, recognition should not have been denied based on such amendments. The counsel contended that the order of refusal lacked sufficient reasoning and was overly brief.
The Revenue's counsel argued that the association was involved in activities beyond scientific research, justifying the refusal of recognition.
Upon reviewing the impugned order dated 24th September, 2010, the Court found it lacking in detailed discussion and reasoning, deeming it insufficient. The Court emphasized the necessity of providing cogent reasons in such orders, as reason is fundamental to the validity of an order.
Consequently, the Court quashed the order dated 24th September, 2010 and directed the competent authority to conduct a fresh hearing, provide an opportunity for the petitioner to present their case, and issue a new order within three months. The competent authority was instructed to ensure that the new order includes relevant reasons addressing the raised issues.
The writ petition was allowed, with each party bearing their own costs.
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2011 (8) TMI 1119
Waiver of pre-deposit and penalties - The main case of the appellant is that they are not liable to pay Service Tax on the royalty paid as consideration for purchase of technical know-how from abroad inasmuch as the technical knowhow is not recognized or protected by any law in India - Held that: - if Service Tax is required to be paid on the transaction in question, CENVAT credit thereof will be available to them as recipient of the service by virtue of Section 66A of the FA, 1994, resulting in revenue neutral situation - Considering the plea of revenue-neutrality raised by the learned counsel, waiver of pre-deposit and stay of recovery granted - appeal allowed - decided in favor of assessee.
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2011 (8) TMI 1118
Addition made on account of closing stock of natural gas - We are of the view that the AO was bound to follow the directions of the Tribunal furnished for this year in decision dated 22.4.2009, in which it is mentioned that the matter has already been restored to the file of the AO for assessment years 2002-03 to 2004-05. Accordingly, the matter was also restored to the file of the AO for this year. However, in the order for assessment year 2002-03 dated 25.07.2008, a clear finding was given that loss of about 4% of purchases is reasonable subject to verification. Instead of verifying the percentage of loss, the AO reproduced his earlier order. The loss of 3.4% is borne out by audited accounts, which is lower than the average loss of about 4%.
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2011 (8) TMI 1117
Issues Involved:
The judgment involves the disallowance of short-term capital loss on the sale of mutual fund units under section 94(7) and the disallowance of various business expenses incurred by the assessee.
Disallowed Short-term Capital Loss on Sale of Mutual Fund Units u/s.94(7):
The assessee challenged the disallowance of short-term capital loss on the sale of mutual fund units under section 94(7) due to the amendment extending the holding period. The Assessing Officer disallowed the loss, considering the retrospective nature of the amendment. The CIT(A) upheld the disallowance, emphasizing the applicability of the extended holding period to transactions concluded after the effective date of the amendment. The Tribunal rejected the assessee's appeal, stating that the retrospective amendment in law must be applied, irrespective of when the transactions were completed.
Disallowance of Business Expenses:
The Assessing Officer disallowed various business expenses claimed by the assessee, citing lack of substantiation and business necessity. The CIT(A) affirmed the disallowance, noting the absence of evidence supporting the expenses' connection to the business. However, the Tribunal directed a reconsideration by the Assessing Officer, based on specific details and justifications provided by the assessee, which were not adequately considered earlier. The matter was remitted back to the Assessing Officer for a fresh decision in accordance with the law.
Conclusion:
The Tribunal dismissed the appeal regarding the disallowed short-term capital loss on mutual fund units, emphasizing the retrospective nature of the amendment. However, the appeal was partly allowed concerning the disallowed business expenses, with the Tribunal directing a reassessment by the Assessing Officer based on the detailed justifications provided by the assessee.
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2011 (8) TMI 1116
Whether the High Court erred in awarding even token compensation to the tune of ₹ 25,000/- each as the High Court did not hold any enquiry and passed the order merely after considering the status report submitted by the appellant no.1 without hearing any of the persons against whom allegations of abuse of power had been made?
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2011 (8) TMI 1115
Revisional Power of Commissioner u/s 263 - Assessee contended that initially a show cause notice u/s 263 was issued - After a long pause, the successor Commissioner of Income-tax issued again a show cause notice under S.263 of the Act on proposing revision on entirely different grounds - The commissioner was not justified in assuming the revisional jurisdiction u/s 263 - HELD THAT:- As held in the case of MALABAR INDUSTRIAL CO. LTD. VERSUS COMMISSIONER OF INCOME-TAX [2000 (2) TMI 10 - SUPREME COURT], the Commissioner can exercise revision jurisdictional u/s 263 if he is satisfied that the order of the assessing officer sought to be revised is (i)erroneous; and also (ii) prejudicial to the interests of the revenue.
The view so taken by the AO without making the requisite inquiries or examining the claim of the assessee will per se be an erroneous view and hence will be amenable to revisional jurisdiction u/s 263. Second reason is that it is not taking of any view that will take the matter under the scope of Section 263. The view taken by the Assessing Officer should not be a mere view in vacuum but a judicial view.
As already stated earlier, we are not able to appreciate on what material was placed before the Assessing Officer at the assessment stage to take such a view. The assessee has also not been able to lead enough evidence to show to us that any inquiry was made by the Ao in this regard. Therefore mere allegation that the Assessing Officer has taken a view in the matter will not put the matter beyond the purview of Section 263 unless the view so taken by the Assessing Officer is a judicial view consciously based upon proper inquiries and appreciation of all the relevant factual and legal aspects of the case.
In the case of income tax matters each assessment year is an independent assessable distinct unit in which principles of res judicata are not applicable. The income of each assessment year and admissible expenses are determined in each year considering the facts and circumstances of the case prevailing during the year. As per the facts and circumstances of the case if there is a change in the facts and circumstances, a different view as per the changed facts and circumstances is required to be taken - Thus Principle of consistency can't be followed in income tax matters.
In this case, the CIT came to conclusion that the assessee is engaged in the business of buying and selling of shares and income arising out of these transactions has to be considered as income from business instead of considering the same as income from capital gain. Accordingly, we do not find any infirmity in the order of the CIT. The same is confirmed - Decision against Assessee.
Profit arising out of sales of shares - Income from business or Capital Gain? - Assessee was frequently purchasing and selling the shares and mutual funds - CIT(A) treated such income as income from profit and gains of business or profession instead of Capital gain - HELD THAT:- In our opinion, whether or not a person carried on business in a particular commodity must depend upon volume, frequency, continuity and regularity of transactions of purchase and sale in a class of goods and the transaction must ordinarily be entered into with a profit motive. After analysing the statement, it is observed that assessee is buying and selling shares and mutual funds in the same year very frequently.
Looking into the volume, frequency, continuity and regularity of transactions of purchase and sale in shares by the assessee, it cannot be said that these transactions were entered into only for the purpose of investment and there was no motive of the assessee to earn profit. Therefore, only inference which can be drawn is that the income earned by the assessee out of sale and purchase of these shares was an income under the head ‘profit and gains of business or profession.' Therefore, the CIT is justified in treating the profit arising out of sale of shares acquired by the assessee as income from business - Decision against Assessee.
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2011 (8) TMI 1114
Issues involved: Appeal against dismissal of Writ Petition, release of vehicle on interim order, appeal before Commissioner of Customs (Appeals), imposition of redemption fine and penalty.
Appeal against dismissal of Writ Petition:
The appellant was aggrieved by the dismissal of the Writ Petition on the ground of not availing the alternate remedy by way of statutory appeal. The appellant then preferred a Writ Appeal challenging the judgment dated 22.09.2010.
Release of vehicle on interim order:
An interim order dated 5th October, 2010 directed the respondent to release the vehicle to the appellant upon payment of customs duty and providing a bank guarantee of Rupees ten lakhs. The appellant was also instructed not to use the vehicle on roads without appropriate licenses and permits.
Appeal before Commissioner of Customs (Appeals):
The appeal filed by the appellant before the Commissioner of Customs (Appeals) was in response to the original order of the Commissioner of Customs dated 13th September, 2010. The appellate order dated 27th January, 2011 upheld the lower authority's decision to reject the appeal and impose a redemption fine and penalty on the appellant.
Imposition of redemption fine and penalty:
The appellant had imported a second-hand car in violation of Foreign Trade Policy, leading to confiscation under Customs Act, 1962. The lower authority imposed a redemption fine of Rupees 1,50,000 and a penalty of Rupees 50,000 for the offense. The appellate order upheld these penalties.
In the subsequent proceedings, it was noted that the appellate authority had misunderstood the interim order of the High Court regarding the re-export of the imported car. It was clarified that the bank guarantee provided by the appellant could be revoked, and the Revenue was advised to pursue statutory remedies if aggrieved by the appellate order of the Commissioner of Customs (Appeals). The Writ Appeal was disposed of accordingly.
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2011 (8) TMI 1113
Issues involved: Reopening of assessment u/s 147 of the Income Tax Act, 1961 based on incorrect computation of deductions u/s 10A and 10B, failure to disclose material facts, potential tax implications.
Reopening based on incorrect computation of deductions: The Assessing Officer reopened the assessment u/s 147 due to the incorrect computation of deductions u/s 10A and 10B. The reasons for reopening highlighted that the assessee had claimed excess exemption u/s 10B, resulting in over assessment of loss and potential tax implications. The petitioner argued that the Assessing Officer erred in treating it as an exemption under Section 10B instead of a deduction. The respondent contended that the terminology used did not alter the essence of the order.
Failure to disclose material facts: The petitioner contended that there was no failure on their part to disclose material facts necessary for assessment. They argued that unit-wise profitability and deduction computations were duly filed with the return of income, indicating full and true disclosure. However, the Assessing Officer, in a brief manner, rejected this argument stating that incorrect computation u/s 10B constituted a failure to disclose material facts. The court directed the Assessing Officer to provide the petitioner with an opportunity to establish the lack of fault and failure in disclosure, emphasizing the need for a reasoned order.
Overall Judgment: The High Court allowed the writ petition in part, setting aside the order of the Assessing Officer and directing a fresh consideration of the matter as per law. The court granted the petitioner the opportunity to present detailed objections and instructed the Assessing Officer to issue a fresh notice for a hearing within six weeks. The period during the pendency of the writ petition and the subsequent proceedings was excluded from the limitation period calculation. No costs were awarded in this matter.
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2011 (8) TMI 1112
MAT Provisions of Section 115JB - Applicable on banks or not? - CIT(A) rejected the claim that the provisions of section 115JB is not applicable to the assessee bank as the same is not a company under the Companies Act, 1956 as held in MAHARASHTRA STATE ELECTRICITY BOARD. VERSUS JOINT COMMISSIONER OF INCOME TAX. [2001 (8) TMI 310 - ITAT MUMBAI] - HELD THAT:- We find that recently the Mumbai Bench of the Tribunal in the case of KRUNG THAI BANK PCL VERSUS JOINT DIRECTOR OF INCOME TAX - INTERNATIONAL TAXATION, MUMBAI [2010 (9) TMI 18 - ITAT, MUMBAI], held that the starting point of computation of MAT under sec. 115JB is the result shown by such a P&L a/c. In the case of banking companies, however, the provisions of Sch. VI are not applicable in view of exemption set out under proviso to s. 211(2) of the Companies Act. The final accounts of the banking companies are required to be prepared in accordance with the provisions of the Banking Regulation Act. The provisions of s. 115JB cannot thus be applied to the case of a banking company.
Further, in the cases of RE. PRAXAIR PACIFIC LIMITED [2010 (7) TMI 51 - AUTHORITY FOR ADVANCE RULINGS] and RE. THE TIMKEN COMPANY [2010 (7) TMI 50 - AUTHORITY FOR ADVANCE RULINGS], it was held that MAT provisions are applicable to a foreign company that does not have a physical presence in India, as such, companies are not required to prepare its accounts as per Companies Act. Therefore, respectfully following the above cited decisions of the Tribunal, we set aside the orders of the lower authorities and allow the appeal of the assessee on the ground that the bank is not required to prepare its profit and loss account in accordance with the provisions of Part II and Part III of Schedule VI to the Companies Act and therefore, the provisions of MAT in section 115JB is not applicable to the assessee - Decision in favour of Assessee.
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2011 (8) TMI 1111
100% EOU - appellant received 737 drums/barrels of finished goods from their Berhampur warehouse. Out of these, 566 drums of finished goods became unfit for human consumption - petitioner submit that the appellant intimated about spoiled goods in 737 drums well in advance and, as the department delayed inspection, the appellant had to destroy the same along with 198 more drums received subsequently because of the objection of the villagers regarding sanitation problems
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2011 (8) TMI 1110
Issues:
Demand of service tax under "Real Estate Agency" service for the period from January 1999 to December 2003, including out-of-pocket expenses and foreign currency collection from a foreign company. Grounds of limitation raised by the appellant in response to the show cause notice.
Analysis:
Issue 1: Demand of service tax under "Real Estate Agency" service
The appeal primarily contested the demand of service tax amounting to Rs. 9,77,666 under the "Real Estate Agency" service for the period from January 1999 to December 2003. The dispute centered around the inclusion of out-of-pocket expenses, such as travelling and hotel expenses, in the taxable value of the service for service tax payment. The Revenue argued that these expenses, reimbursed by the service recipients, should be included in the taxable value. Additionally, the demand was also related to a certain amount collected in foreign currency from a foreign company, which the Revenue contended was for services rendered within India. The appellant, however, claimed that the service was exempt from tax due to specific exemption notifications. The Department highlighted that the foreign exchange was accounted for when there was no exemption from service tax.
Issue 2: Grounds of limitation
The appellant raised the plea of limitation in response to the show cause notice issued on 14-6-2005, which was based on an audit note from February 2004. The appellant argued that they were led to believe that service tax was not payable on out-of-pocket expenses based on various circulars and notifications. They referred to specific instructions and letters from the Ministry and Directorate of Service Tax to support their contention. The appellant maintained that they had bona fide doubts regarding their tax liability, which should have been considered in invoking the extended period of limitation for recovery of service tax. The Revenue, however, contended that the plea of limitation should be rejected, citing that the material information was not disclosed by the appellant.
Judgment:
The Tribunal found merit in the appellant's argument regarding limitation. They noted that the appellant had entertained bona fide doubts about their tax liability, supported by circulars and notifications available during the disputed period. The Tribunal held that the original authority should have provided better reasons for invoking the extended period of limitation. It was observed that the appellate authority did not consider the appellant's plea based on the circulars and notifications. Ultimately, the Tribunal decided to set aside the demand of service tax on the grounds of limitation, allowing the appeal solely on this basis.
This comprehensive analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the Tribunal's decision based on the grounds of limitation and the appellant's bona fide belief regarding tax liability.
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2011 (8) TMI 1109
Issues involved: Release of goods detained under Punjab VAT Act, 2005 and imposition of costs on the officer.
The judgment addresses the issue raised by the petitioner's counsel regarding the non-release of goods detained under the Punjab VAT Act, 2005 despite provisions for release on furnishing surety. The State's counsel acknowledged the need for the goods to be released upon furnishing surety.
The petitioner's counsel highlighted previous instances where similar orders were passed by the same officer, leading to unnecessary harassment and litigation. Referring to past cases, it was argued that costs should be imposed on the officer for not rectifying his approach despite previous reprimands.
In response, the State's counsel defended the officer's actions, stating that he was acting in the best interest of the State and was considered an honest officer.
After considering the arguments from both sides, the court found the officer's conduct to be indefensible, leading to the State conceding the relief sought by the petitioner. Consequently, the officer was ordered to bear the costs of Rs. 25,000, initially paid by the State but to be recovered from the officer personally.
The judgment concluded by disposing of the writ petition in light of the above considerations.
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2011 (8) TMI 1108
The High Court of Delhi allowed the petitioner's application subject to exceptions. The respondent No.2 was directed to decide on the petitioner's representation for releasing the bank guarantee and goods within two weeks, providing reasons for the decision. The writ petition was disposed of without costs.
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2011 (8) TMI 1107
Whether Section 110 of the Karnataka Land Reforms Act, 1961, as amended by the Karnataka Land Reforms amendment Act, 1973, (Act 1 of 1974), which came into effect from 01.03.1974, read with Section 79 B of the said Act, introduced by amending Act 1 of 1974, violates the basic structure of the Constitution, in so far as it confers power on the Executive Government, a delegatee of the Legislature, of withdrawal of exemption of Linaloe plantation, without hearing and without reasons?
Whether the Roerich and Devika Rani Roerich (Acquisition and Transfer) Act, 1996, (the Acquisition Act), is protected by Article 31C of the Constitution?
Whether the true interpretation of Article 300A of the Constitution, the said Act is violative of the said Article in so far as no specific compensation prescribed for the acquisition of 468 acres of Linaloe plantation, and, after deduction of liabilities and payment of compensation for the artefacts, no balance may and/or is likely to exist for payment of such compensation, as a result of which, whether the Act really is expropriatory in nature?
Whether on true interpretation of Article 300A of the Constitution, the said Act is violative of Article 300A as the said Article is not, by itself, a source of Legislative power, but such power of the State Legislature being traceable only to Entry 42 of List III of Schedule VII to the Constitution viz., "Acquisition and Requisition of Property", which topic excludes expropriation and confiscation of property?
If Article 300A of the Constitution is construed as providing for deprivation of property without any compensation at all, or illusory compensation, and hence providing for expropriation and confiscation of property, whether the said Article would violate the rule of law and would be an arbitrary and unconscionable violation of Article 14 of the Constitution, thus violating the basic structure of the Constitution?
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2011 (8) TMI 1106
Issues Involved:
1. Extent of DEPB benefit eligibility for deduction under section 80HHC of the Income Tax Act, 1961.
2. Interpretation of section 28(iiid) and its correlation with section 80HHC.
3. Definition and treatment of DEPB credit and its face value.
4. Legislative intent and amendments related to section 28(iiid) and explanation (baa) to section 80HHC.
Detailed Analysis:
1. Extent of DEPB Benefit Eligibility for Deduction Under Section 80HHC:
The central controversy revolves around the extent to which the benefit of DEPB upon sale of credit by the assessee is eligible for deduction under section 80HHC. The Assessing Officer excluded 90% of the DEPB credit amount from the deduction calculation. The CIT (Appeals) upheld this, considering the entire amount received from DEPB credit transfer under section 28(iiid). The Tribunal, however, opined that only the profit (difference between sale price and face value) should be excluded. The High Court concluded that the entire sale consideration of DEPB credit should be considered under section 28(iiid), not just the profit margin.
2. Interpretation of Section 28(iiid) and Its Correlation with Section 80HHC:
Section 28(iiid) was introduced to cover profits from the transfer of DEPB credits. The Tribunal interpreted that only the profit margin (sale price minus face value) should be considered, while the High Court held that the entire sale consideration is the profit under section 28(iiid). This interpretation aligns with the legislative intent to cover the entire amount received from DEPB credit transfer as profit, thereby excluding 90% of it for section 80HHC deduction calculations.
3. Definition and Treatment of DEPB Credit and Its Face Value:
DEPB credits are part of the duty remission scheme to neutralize customs duty on imported inputs used in export products. The High Court held that DEPB credits have no acquisition cost to the assessee. The face value of DEPB credit cannot be considered its cost in the hands of the assessee. The entire sale consideration from DEPB credit transfer should be treated as profit under section 28(iiid).
4. Legislative Intent and Amendments Related to Section 28(iiid) and Explanation (baa) to Section 80HHC:
The legislative history and Finance Minister's speech clarified that section 28(iiid) was introduced to neutralize Tribunal decisions that did not consider DEPB credit sales as part of business profits. The amendments aimed to include the entire sale consideration of DEPB credits under section 28(iiid) and exclude 90% of it from business profits for section 80HHC deductions. This interpretation prevents anomalous situations where retained DEPB credits are taxed differently from transferred ones.
Conclusion:
The High Court reversed the Tribunal's decision, holding that the entire sale consideration of DEPB credits should be included under section 28(iiid). Consequently, 90% of this amount should be excluded from business profits for section 80HHC deductions. The court granted a certificate for appeal to the Supreme Court, recognizing the substantial question of law and its general importance.
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