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AIA Engineering Ltd. Versus The Asst. CIT Circle-1, Ahmedabad

Claim of deduction u/s.80HHC on the DEPB income - Held that:- Respectfully following the judgment of Topman Exports vs. CIT (2012 (2) TMI 100 - SUPREME COURT OF INDIA) and Avani Exports and Others vs. CIT (2012 (7) TMI 190 - GUJARAT HIGH COURT ), we hereby set aside the order of the ld.CIT(A) and direct the AO to allow the claim of the assessee u/s.80HHC of the Act in respect of DEPB income and re-compute the deduction in the light of the above judgements of the Hon’ble Apex Court and Hon’ble Ju .....

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d the following grounds of appeal:- Your appellant being aggrieved by the order passed by the learned Commissioner of Income Tax (Appeals)-VI, Ahmedabad presents this appeal against the same before your Honor on the following grounds: 1. The Ld. Commissioner of Income-tax (Appeals) erred both in law and on facts in holding that Assessing Officer's action in reducing the claim of deduction U/s. 80HHC by ₹ 30,85,077/- was correct. On the facts and circumstances as well as in view of the .....

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n facts in holding that as the Export Turnover exceeded ₹ 10 Crores, the appellant was not entitled to any deduction u/s. 80HHC in respect of DEPB Income. 4. The Ld. Commissioner of Income-tax (Appeals) ought to have ordered to grant the deduction u/s. 80HHC as calculated by the appellant the same being allowable. The same be so held now and deduction be ordered to be allowed fully as claimed. 5. The order passed by the Ld.Commissioner of Income-tax (Appeals) is bad in law and contrary to .....

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er dtd.22/11/2010 which is under: "The Hon'ble ITAT vide its order under consideration in ITA No.2940/Ahd/2006 dated-05/10/2009 has set aside and restored back the issue to the file of the Assessing Officer with a direction to decide the issue afresh in accordance with law, after allowing sufficient opportunity to the assessee and keeping in view the decision of the Special Bench in the case of Topman Exports vs. ITO. The relevant part of the order of the Hon'ble ITAT is reproduced .....

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Bench. With these directions, ground Nos. I to 3 in the appeal are disposed of." 2.2. In pursuance of the direction of the Tribunal, the Assessing Officer (AO in short) passed order dated 22/11/2010 u/s.143(3) r.w.s.254 of the Income Tax Act, 1961 (hereinafter referred to as the Act ). The assessee feeling aggrieved by the order, preferred an appeal before the ld.CIT(A). The ld.CIT(A) confirmed the addition made by the A.O. 2.3. Against the aforesaid finding of the ld.CIT(A), the assessee i .....

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in the case of Topman Exports vs. CIT reported at (2012) 342 ITR 49(SC) has reversed the judgement of the Hon ble Mumbai High Court rendered in the case of CIT vs. Kalpataru Colour and Chemicals(supra). 3.1. On the contrary, ld.Sr.DR fairly conceded the submission of the ld.counsel for the assessee. 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has decided this issue by observing .....

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an exports is overruled by Bombay High Court in the case of Kalpataru colours and chemicals. It is true that the matter is pending in Supreme Court however as things stands today, the decision of Bombay High Court is binding and the same is to be followed. The decision of Bombay High Court is quoted by the assessing officer in the assessment order and as per that appellant is not entitled to get any relief. It is wrong on the part of appellant to claim that decision of top man exports is to be a .....

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that where an assessee has an export turnover exceeding ₹ 10 crores and has made profits on transfer of DEPB under cl. (d) [sic.-(iiid)] of s. 28, he would not get the benefit of addition to export profits under third or fourth proviso to sub-s. (3) of s. 80HHC, but he would get the benefit of exclusion of a smaller figure from "profits of the business" under Expln. (baa) to s. 80HHC of the Act and there is nothing in Expln. (baa) to s. 80HHC to show that this benefit of exclusio .....

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ourt, therefore, was not right in coming to the conclusion that as the assessee did not (sic) have the export turnover exceeding ₹ 10 crores and as the assessee did not fulfill the conditions set out in the third proviso to s. 80HHC(3), the assessee was not entitled to a deduction under s. 80HHC on the amount received on transfer of DEPB and with a view to get over this difficulty the assessee was contending that the profits on transfer of DEPB under s. 28(iiid) would not include the face .....

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pugned judgment and orders of the Bombay High Court are accordingly set aside. The appeals are allowed to the extent indicated in this judgment. The AO is directed to compute the deduction under s. 80HHC in the case of the appellants in accordance with this judgment. There shall be no order as to costs. 4.2. Reliance has been placed by the ld.counsel for the assessee on the judgement of Hon ble Gujarat High Court rendered in the case of Avani Exports and Others vs. CIT reported at (2012) 348 ITR .....

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