Revenue appeal dismissed, assessee's cross-objection partly allowed. Assessee appeal dismissed for 2008-09.

The Tribunal dismissed the Revenue's appeal, partly allowed the assessee's cross-objection, and dismissed the assessee's appeal for the assessment year 2008-09.

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Issues Involved:
1. Allowability of deduction under section 80IB(10) for duty drawback.
2. Disallowance under section 14A of the Income Tax Act.
3. Transfer pricing adjustment and method adopted by the TPO.
4. Direction by CIT(A) to reverify calculations after deleting transfer pricing adjustment.
5. Exclusion of export entitlement from computation of eligible profit for section 80IB.

Issue-wise Detailed Analysis:

1. Allowability of Deduction under Section 80IB(10) for Duty Drawback:
The assessee contended that the "duty drawback" received should be considered as part of the income derived from the industrial undertaking, qualifying for exemption under section 80IB(10). The Tribunal noted that this issue was identical to a previous case for the assessment year 2009-2010, where the deduction under section 80IB for duty drawback was denied based on the Supreme Court judgment in Liberty India. The Tribunal followed the same reasoning and rejected the assessee's grounds, deciding against the assessee.

2. Disallowance under Section 14A of the Income Tax Act:
The assessee challenged the disallowance of Rs. 4,80,455/- made under section 14A, arguing that no such expenditure was incurred. The Tribunal observed that this issue was similar to a previous year's case, where it was decided that the Assessing Officer should recompute the disallowance after excluding investments in foreign subsidiaries. The Tribunal restored the issue to the Assessing Officer for recomputation, allowing these grounds for statistical purposes.

3. Transfer Pricing Adjustment and Method Adopted by the TPO:
The Revenue appealed against the CIT(A)'s decision to allow relief of Rs. 1,00,47,551/- on account of transfer pricing adjustment. The Tribunal noted that CIT(A) had adopted comparables used by the TPO in the next assessment year and found that the exclusion of duty drawback from operating income was not justified unless done for comparables. The Tribunal upheld CIT(A)'s decision, finding no infirmity in it, and dismissed the Revenue's appeal.

4. Direction by CIT(A) to Reverify Calculations:
The assessee's cross-objection argued that CIT(A) should not have directed the Assessing Officer/TPO to reverify calculations after deleting the transfer pricing adjustment. The Tribunal agreed with the assessee, stating that CIT(A) had already verified the calculations and such a direction was unnecessary. The Tribunal modified CIT(A)'s direction, holding that the Assessing Officer should give relief to the assessee as decided by CIT(A) without further recalculations.

5. Exclusion of Export Entitlement from Computation of Eligible Profit for Section 80IB:
The assessee contested the exclusion of export entitlement from eligible profit under section 80IB, citing earlier and subsequent Supreme Court judgments. The Tribunal noted that this issue was identical to the one decided for the assessment year 2008-09, where the Supreme Court judgment in Liberty India was followed. The Tribunal upheld CIT(A)'s decision, rejecting the assessee's ground.

Conclusion:
The Tribunal dismissed the Revenue's appeal, partly allowed the assessee's cross-objection, and dismissed the assessee's appeal for the assessment year 2008-09. The order was pronounced in the open court.

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