High Court overturns Tribunal orders, remits cases for review after Bombay High Court decision

The High Court set aside the Tribunal's orders and remitted the cases back for reconsideration following the overruling of the Special Bench decision by the Bombay High Court. The appeals were disposed of based on the changed legal position resulting from the Bombay High Court's judgment.

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Issues:
Interpretation of statutory provisions regarding deduction under section 80HHC of the Act in relation to profit on sale of DEPB and DEPB Credit utilization.

Analysis:
1. The appeals involved a common question of law regarding the interpretation of statutory provisions. The questions of law framed included whether the Tribunal was justified in directing the Assessing Officer to allow deduction under section 80HHC in respect of profit on sale of DEPB and whether the assessee would be entitled to deduction under the first proviso below sub-Section 3 of Section 80HHC in respect of DEPB Credit utilized.

2. The Tribunal had based its orders on the decision of the ITAT Special Bench in the case of Topman Export Vs. ITO. The Special Bench held that the face value of DEPB is chargeable to tax under section 28(iiib) at the time of accrual of income and that profit in the sale of DEPB is liable to be considered under section 28(iiid) at the time of its sale. However, the judgment of the Bombay High Court in Commissioner of Income Tax Vs. Kalpataru Colours and Chemicals overruled the Special Bench decision.

3. In light of the overruling of the Special Bench decision by the Bombay High Court, the High Court set aside the orders passed by the Tribunal in all these cases. The cases were remitted back to the Tribunal for a fresh decision on merits considering the factual position in each case.

4. The High Court's decision resulted in the disposal of the appeals on the terms of setting aside the Tribunal's orders and remitting the cases back for reconsideration based on the changed legal position following the judgment of the Bombay High Court.

This comprehensive analysis covers the issues involved in the legal judgment, the basis of the Tribunal's decision, the subsequent overruling by the Bombay High Court, and the High Court's directive to remit the cases back to the Tribunal for fresh consideration.

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