TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>AO and CIT(A) misinterpreted Section 28(iiib) and 28(iiid) on DEPB receipts following Topman Exports precedent</h1> ITAT Delhi held that AO and CIT(A) incorrectly interpreted provisions under Section 28(iiib) and 28(iiid) regarding DEPB receipts and deduction under ... Interpretation of provisions under Section 28(iiib) and Section 28(iiid) of the Income Tax Act - deduction under section 80HHV vis-à-vis receipts on account of sale of DEPB - charging of interest u/s 234B - HELD THAT:- The AR has drawn our attention towards judgement of the Hon’ble Apex Court in the case of Topman Exports [2012 (2) TMI 100 - SUPREME COURT], by submitting that held that, the position and interpretation of Section 28(iiib) r/w section 28(iiid) of the Act make it clear that the cash assistance receivable by the assessee is covered under clause (iiib) of Section 28, whereas profit on transfer of DEBP takes place on a subsequent date when DEBP is sold by the assessee and is covered under clause (iiid) of Section 28. Thus, we observe that the action of the AO upheld by the ld. CIT(A) is not in accordance with the proper interpretation of provisions in the judgment of Hon’ble Supreme Court in the case of Topman Exports (supra). In the light of above judgement of Hon’ble Supreme Court, we set aside the impugned orders and restore all these issues to the file of the AO with the direction that he will decide the matter afresh de novo in accordance with directions given by the Hon’ble Apex Court in the case of Topman Exports (supra) after affording opportunity of being heard to the assessee. The assessee would cooperate with the AO during fresh adjudication. In the result, the appeals of the assessee are allowed for statistical purposes. Issues:- Interpretation of provisions under Section 28(iiib) and Section 28(iiid) of the Income Tax Act.- Deduction under section 80HHV vis-`a-vis receipts on account of sale of DEPB.- Charging of interest under section 234B of the Act.- Proper adjudication of the appeals based on the judgment of the Hon'ble Supreme Court in the case of Topman Exports vs CIT, Mumbai.Interpretation of Provisions under Section 28(iiib) and Section 28(iiid):The case involved a dispute regarding the proper interpretation of provisions under Section 28(iiib) and Section 28(iiid) of the Income Tax Act concerning the treatment of cash assistance and profit on the transfer of the Duty Entitlement Pass Book (DEPB) scheme. The Hon'ble Supreme Court, in the case of Topman Exports vs CIT, Mumbai, clarified that DEPB falls under clause (iiib) as cash assistance receivable by the assessee against exports, while profit on the transfer of DEPB falls under clause (iiid) as a separate item. The Court emphasized that the difference between the sale value and face value of DEPB represents profit on its transfer.Deduction under Section 80HHV vis-`a-vis Receipts on Account of Sale of DEPB:The appeals raised concerns regarding the deduction under section 80HHV and section 80HHC in relation to receipts from the sale of DEPB. The Assessing Officer disallowed the deduction under section 80HHV, asserting that profits from the sale of DEPB should be included in the assessee's income. The CIT(A) upheld this decision, leading to the appeals before the Tribunal. The Tribunal directed the Assessing Officer to reconsider the matter in light of the Supreme Court's judgment in the Topman Exports case.Charging of Interest under Section 234B of the Act:Another issue in the appeals was the charging of interest under section 234B of the Income Tax Act. The CIT(A) had upheld the charging of interest, disregarding a beneficial circular issued by the Central Board of Direct Taxes. The Tribunal noted this discrepancy and decided to set aside the impugned orders, directing the Assessing Officer to reevaluate the matter in accordance with the Supreme Court's judgment.Proper Adjudication Based on Topman Exports Case:The Tribunal, after considering the arguments of both parties and examining the relevant legal provisions and the Supreme Court's judgment in the Topman Exports case, concluded that the Assessing Officer's actions were not aligned with the Court's interpretation. Consequently, the Tribunal allowed the appeals for statistical purposes and remanded the issues back to the Assessing Officer for fresh adjudication in accordance with the directions provided by the Supreme Court.This detailed analysis of the judgment highlights the key issues addressed by the Appellate Tribunal ITAT, Delhi, emphasizing the significance of the Supreme Court's interpretation in resolving the disputes related to the Income Tax Act.
TaxTMI 
TaxTMI 
