9911796707
TMI Blog2012 (8) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... . Facts, in brief, as per relevant orders are that the Assessing Officer (A.O. in short),inter alia, did not allow the claim of the assessee for deduction u/s 80HHC of the Act on the amount of DEPB-Rs. 1,32,90,916/- in the AY 2003-04 in terms of the third Proviso inserted by the Taxation Laws (Amendment) Act, 2005 in section 80HHC(3) of the Act w.e.f. 1.4.1998 and did not increase the profits by the amount stipulated in the said proviso in respect of DEPB income. Likewise, in the AY 2004-05 also, the AO denied deduction u/s 80HHC of the Act in relation to the DEPB amount. On appeal, the ld. CIT(A) upheld the findings of the AO in the AY 2003-04 , the assessee, admittedly, having not fulfilled the conditions stipulated in the said third prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was remanded to the Tribunal for fresh decision in accordance with law. 4. Since we find that the matter is covered by earlier orders of this Court, we dispose of these appeals in same terms. For this purpose, we have not considered it necessary to issue notice to the respondent, but we give liberty to the respondent to move this Court if they have any grievance against this order." 4. In terms of the aforesaid directions of the Hon'ble High Court, these appeals were listed for hearing before us. At the outset, both the parties agreed that the issue is now squarely covered by the decision of Hon'ble Supreme Court in the case of Topman Exports vs. CIT,18 taxmann.com120(SC). The ld. AR added that turnover of the assessee was less th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment that the entire sale proceeds of the DEPB realized on transfer of the DEPB and not just the difference between the sale value and the face value of the DEPB represent profit on transfer of the DEPB. .............................................................................................. . 20. Explanation (baa) under Section 80HHC states that "profits of the business" in the aforesaid formula means the profits of the business as computed under the head "Profits and Gains of Business or Profession" as reduced by (1) ninety per cent of any sum referred to in clauses (iiia), (iiib), (iiic), (iiid) and (iiie) of Section 28 or of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of similar n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DEPB and the sale value of the DEPB gets excluded from "profits of the business", the assessee gets a bigger figure of "profits of the business" and this is possible when the DEPB accrues to the assessee in one previous year and transfer of the DEPB takes place in the subsequent previous year. The result in such case is that a higher figure of "profits of the business" becomes the multiplier in the aforesaid formula under subsection (3)(a) of Section 80HHC for arriving at the figure of profits derived from exports. 21. To the figure of profits derived from exports worked out as per the aforesaid formula under sub-section (3)(a) of Section 80HHC, the additions as mentioned in first, second, third and fourth proviso under sub-section (3) ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at (a) he had an option to choose either the duty drawback or the Duty Entitlement Pass Book Scheme, being the Duty Remission Scheme; and (b) the rate of drawback credit attributable to the customs duty was higher than the rate of credit allowable under the Duty Entitlement Pass Book Scheme, being the Duty Remission Scheme. Therefore, if the assessee having export turnover of more than Rs. 10 crores does not satisfy these two conditions, he will not be entitled to the addition of profit on transfer of DEPB under the third proviso to sub-section (3) of Section 80HHC. 22. The aforesaid discussion would show that where an assessee has an export turnover exceeding Rs. 10 crores and has made profits on transfer of DEPB under clause (d) of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o tax and will be entitled to exemption from tax according to the strict language of the taxing statute and if as per the words used in explanation (baa) to Section 80HHC read with the words used in clauses (iiid) and (iiie) of Section 28, the assessee was entitled to a deduction under Section 80HHC on export profits, the benefit of such deduction cannot be denied to the assessee. 23. The impugned judgment and orders of the Bombay High Court are accordingly set aside. The appeals are allowed to the extent indicated in this judgment. The Assessing Officer is directed to compute the deduction under Section 80HHC in the case of the appellants in accordance with this judgment. There shall be no order as to costs." 5.1. In view of the foregoin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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