TMI Blog2013 (12) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... in the return of income - Decided against Revenue. - I.T.A. No. 411/Mum/2011 - - - Dated:- 31-1-2013 - Shri P. M. Jagtap And Shri Sanjay Garg,JJ. Shri O. P. Meena Shri Haresh Joshi ORDER Per P. M. Jagtap, A.M. This appeal is preferred by the Revenue against the order of learned CIT(Appeals)-29, Mumbai dated 24-11-2010 and the same is being disposed of along with the cross objection filed by the assessee being C.O. No. 267/Mum/2012. 2. The grievance of the Revenue as projected in the grounds raised in its appeal is that the learned CIT(Appeals) has erred in allowing the assessee's claim for deduction u/s 80HHC on DEPB profit without appreciating the fact that there is a net loss even after adjusting DEPB profit. 3. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.10 crores, deduction u/s 80HHC was allowable on the DEPB profit. The AO did not find merit in this contention of the assessee and rejected the same relying on the decision of Hon'ble Supreme Court in the case of Liberty India 317 ITR 218 wherein it was held that DEPB profit is not eligible for deduction u/s 80IB as the same is not the income derived from eligible industrial undertaking. The AO, therefore, held that DEPB profit was not eligible for deduction u/s 80HHC. This matter was again carried before the learned CIT(Appeals) in an appeal filed by the assessee and keeping in view the second proviso to section 80HHC and clause (iiid) of section 28 inserted by the Taxation Laws (Amendment) Act, 2005 with retrospective effect from 01-04-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover of the business carried on by the assessee:" "28. The following income shall be chargeable to income-tax under the head "Profits and gains of business or profession:- ------------ (iiid) any profit on the transfer of the Duty Entitlement Pass Book Scheme, being the Duty Remission Scheme under the export and import policy formulated and announced under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992). In the present case, the total turnover of the assessee for the year under consideration was Rs.2.8 crores and as per the second proviso to section 80HHC inserted in the statement with retrospective effect from 01-04-1998, the profits computed u/s 80HHC(3) has to be further increased by the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is beneficial to the assessee and as clarified by the Hon'ble Gujarat High Court in its decision relied upon by the Hon'ble Bombay High Court in the case of Vijaya Silk House (Bangalore) Ltd. (supra), in this type of substantive amendment, retrospective operation can be given only if it is for the benefit of the assessee. 5. As regards the contention raised on behalf of the Revenue in the ground that there was a net loss even after adjusting DEPB profit, it is observed that the AO himself has mentioned on page 2 of his order that the assessee had a net loss of Rs.12,17,912/- before applying the proviso to section 80HHC(3) of the Act i.e. before taking into consideration the amount of DEPB profit. After taking into account DEPB profi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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