9911796707
TMI Blog2015 (6) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Act. 3. Without prejudice to the above, the learned Commissioner of Income Tax Appeals has erred in confirming the reduction of claim u/s 80 IB on export incentives in the form of DEPB. 4. Without prejudice to the above, the learned Commissioner of Income Tax Appeals has erred in confirming the reduction of claim u/s 80 HHC on total export incentives received in the form of DEPB. 5. That the learned Commissioner of Income Tax (Appeals) has erred in confirming the chargeability of Income Tax on profit on transfer of Duty Entitlement Pass Book scheme defined u/s 28 (Hid), whereas the same is not forming part of Income as definition u/s 2 (24). 6. That the learned Commissioner of Income Tax (Appeals) has erred in not adjudicating the issue on chargeability of interest u/s 234 B, 234 C and 220 (2) though as per CBDT's circular No.2/2006 dt. 17/01/2006 no interest should have been charged. 7. Your appellant craves leave to consider each of the above grounds of appeal without prejudice to each other and to add, alter, amend or furnish fresh and detailed grounds of appeals. 2. The brief facts are that the assessee had filed its return of income on 30/10/2004 declaring total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th retrospective effect from 1/4/1998, the deduction under section 80HHC could be allowed to the assessee with respect to DEPB, only if ,the assessee fulfils certain conditions as laid down in the said proviso. The burden to prove that the assessee fulfilled those conditions was on the assessee, which , the assessee failed to discharge. The AO,therefore, took the value of DEPB for calculating deduction under section 80 HHC at Rs.nil. He further observed that as per the provisions of section 80IA(9) r.w. provisions of section 80 IB(13), if an assessee had claimed the deduction under section 80 IB, then the deduction under any provision of Chapter VIA-C cannot be allowed. He, therefore, held that no deduction could be allowed to the assessee as per provisions of section 80HHC with respect to the profits that were claimed and allowed as per provisions of section 80IB. He also held that the DEPB receipts did not constitute the profits derived from industrial undertaking, hence, was not eligible for deduction under section 80IB. Aggrieved by the order of the AO the assessee preferred an appeal before Ld. CIT(A). 3. Ld. CIT(A) upheld the findings of the AO in reopening of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment proceedings under section 143(3), was one of the possible view, hence, the reopening on this ground was not justified. 4.1 However, since we haveupheld that the first contention that the total turnover would include turnover of 80IB unit, hence, the AO had reasons to believe that the income of the assessee had escaped assessment, hence, reopening of the assessment is held to be valid. This issue is accordingly decided against the assessee. Ground No.3,4,&5: 5. Grounds No.3,4 & 5 are inter connected and hence the same are taken together for adjudication. Vide ground No.3 the assessee has agitated the action of Ld. CIT(A) in reducing the receipts of DEPB from deduction claimed under section 80IB of the Act. Ground No.4 & 5 relate to the computation of deduction under section 80HHC of the Act and chargeability of income in relation to export incentives received by the assessee in the form of DEPB. 5.1 The AO held that DEPB profit was not eligible for deduction u/s 80IB as the same was not the income derived from eligible industrial undertaking. It may be observed that the Hon'ble Supreme Court in the case of Liberty India v. CIT[(2009) 317 ITR 218 (SC)] has held that du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concluded. In other words, in this type of substantive amendment, retrospective operation can be given only if it is for the benefit of the assessee but not in a case where it affects even a fewer section of the assessee. 27. We, accordingly, quash the impugned amendment only to this extent that the operation of the said section could be given effect from the date of the amendment and not in respect of earlier assessment years of the assessees whose export turnover is above Rs. 10 Crore. In other words, the retrospective amendment should not be detrimental to any of the assessee." 5.3 Learned AR has further brought our attention to the law laid down by Hon'ble Supreme Court in the case of Topman Exports Vs. CIT, 342 ITR 49 where in the hon'ble Supreme court has observed that the objective of DEPB is to neutralise the incidence of customs duty on the import content of the export products. Hence, it has direct nexus with the cost of the imports made by an exporter for manufacturing the export products. The cost of customs duty is neutralized under the DEPB scheme, by granting a duty credit against the export product and this credit can be utilised for paying customs duty on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
