TMI Blog2022 (6) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant : Sri Pawan Chakrapani For the Respondent : Sri MN Murthy Naik, CIT-DR ORDER PER S. BALAKRISHNAN, ACCOUNTANT MEMBER : This appeal is filed by the assessee against the order of the Principal Commissioner of Income Tax (Central), Visakhapatnam in F.No. Pr.CIT(C)/263/2020-21, dated 29/03/2021 for the AY 2017-18. 2. At the outset, the Ld. AR submitted that in all the three appeals there is a delay of 111 days in filing the appeal before the Tribunal. In this regard the Ld. AR brought our attention to the petition filed by the assessee for condonation of the delay and submitted that the order of the Ld. Pr. CIT (Central), Visakhapatnam was passed on 29/03/2021 which falls within the limitation period excluded by the Hon ble Apex Court. Further, the Ld. AR submitted In this regard that as per the decision of the Hon ble Supreme Court in SMW(A) No.3 of 2020, the period of limitation for filing the appeals under general laws and all special laws falling between 15/3/2020 and 28/02/2022 shall be excluded for calculating the delay. Considering the same, we hereby condone the delay of 111 days in filing the present appeals before the Tribunal and proceed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess prejudicial to the interests of the revenue to warrant a revision and therefore the order passed by the Hon ble Pr. CIT is ultra vires to the scope of section 263 and requires to be cancelled under the facts and circumstances of the appellant s case. 3. The Hon ble Pr. CIT has erred in not appreciating the settled position of law that, where there are two opinions possible on the an issue, section 263 cannot be exercised to invoke such as issue. 4. The Hon ble Pr. CIT has grossly erred in revising the order passed by the Ld. AO without appreciating that there is no error, much less prejudicial to the interests of the Revenue to warrant a revision and therefore the order passed by the Hon ble Pr. CIT is ultra vires to the scope of section 263 and requires to be cancelled under the facts and circumstances of the Appellant s case. 5. Without prejudice to the above Hon ble Pr. CIT ought to have appreciated that the aforesaid issue on which the Hon ble Pr. CIT had sought to revise the assessment order is a conscious view adopted by the Ld. AO, which is not shown to be erroneous and consequently, the jurisdiction under section 263 of the Act stands ousted and according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... called) received or receivable by any person against exports under any scheme of the Government of India should be treated as part of business profits. The Ld. AR further submitted that Taxation Laws (Amendment) Act, 2005 has inserted in section 28 a new clause-(iiid) with retrospective effect from 1/4/1998 that 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 shall be treated as part of the business profits of the exporter. The Ld. AR also relied on the ratio laid down by the Hon ble Supreme Court in the case of CIT vs. Meghalaya Steels Ltd (2016) 383 ITR 217 (SC). The Ld. AR vehemently argued that the Liberty India (supra) judgment has been nullified by the ratio laid down in Meghalaya Steel Ltd (supra) in the year 2016 and hence the ratio laid down in Liberty India (supra) should not be valid. The Ld. AR also submitted that if there is no export sales, the assessee is not entitled for these incentives and hence it has direct link and nexus with the activities of the assessee industrial underta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 5 of the Foreign Trade (Development and Regulation) Act, 1992 shall be treated as part of the business profits of the exporter and assessed as profits and gains of business or profession and not under the head income from other sources . 8. Since the issue revolves around the provisions of section 80IB(11A) of the IT Act, 1961, we find it appropriate and necessary to reproduce the provisions of section 80IB(1) (11A) of the Act: 80IB(1): Where the gross total income of an assessee includes any profits and gains derived from any business referred to in sub-sections (3) to (11), (11A) and (11B) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to such percentage and for such number of assessment years as specified in this section. 80IB(11A) The amount of deduction in a case of an undertaking deriving profit from the business of processing, preservation and packaging of fruits or vegetables or meat and meat products or poultry or marine or d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business, which is a separate and distinct head as recognised by Section 14 of the Income Tax Act. Shri Radhakrishnan is not correct in his submission that assistance by way of subsidies which are reimbursed on the incurring of costs relatable to a business, are under the head income from other sources , which is a residuary head of income that can be availed only if income does not fall under any of the other four heads of income. Section 28(iii)(b) specifically states that income from cash assistance, by whatever name called, received or receivable by any person against exports under any scheme of the Government of India, will be income chargeable to income tax under the head profits and gains of business or profession . If cash assistance received or receivable against exports schemes are included as being income under the head profits and gains of business or profession , it is obvious that subsidies which go to reimbursement of cost in the production of goods of a particular business would also have to be included under the head profits and gains of business or profession , and not under the head income from other sources . 29. For the reasons given by us, we are of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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