Tribunal's Decision Upheld on Section 80HHC Claim Disallowance under Income-tax Act |

The Gujarat High Court upheld the Tribunal's decision to disallow the claimed amount under section 80HHC of the Income-tax Act, 1961. The Court held that the entire sale consideration upon the transfer of DEPB credit would be covered under section 28(iiid) of the Act, in line with a decision of the Bombay High Court. The appeal was dismissed as the issue had been addressed in connected appeals where constitutional certificates were granted.

---

---

Issues Involved: Interpretation of u/s 80HHC of the Income-tax Act, 1961 in relation to disallowance of claimed amount under the said section.

The judgment of the Gujarat High Court in the case involved the interpretation of section 80HHC of the Income-tax Act, 1961 in relation to the disallowance of Rs. 85,01,000 claimed by the assessee. The assessee, a manufacturer-exporter, transferred DEPB credits during the assessment year in question. The contention was that only the profit derived from the sale of DEPB credits should be excluded from export profit under section 28(iiid) of the Act. However, the Tribunal rejected this argument, relying on a decision of the Bombay High Court. The High Court, in a detailed judgment, aligned with the Bombay High Court's interpretation, holding that the entire sale consideration upon the transfer of DEPB credit would be covered under section 28(iiid) of the Act. The appeal was dismissed without separate reasons, as the same issue had been addressed in a group of connected appeals where certificates under Article 133 and 134 of the Constitution were granted.

In summary, the High Court upheld the Tribunal's decision to disallow the claimed amount under section 80HHC of the Income-tax Act, 1961, based on the interpretation that the entire sale consideration upon the transfer of DEPB credit would be covered under section 28(iiid) of the Act, aligning with the decision of the Bombay High Court in a similar case.

---