Delhi High Court orders tribunal to review profit exclusion from DEPB Licenses for Section 80HHC deduction

The High Court of Delhi directed the tribunal to reconsider the exclusion of profit from the sale of DEPB Licenses for computing the deduction under Section 80HHC of the Income Tax Act due to retrospective amendments introduced by the Taxation Laws (Amendment) Act, 2005. The tribunal was instructed to reexamine the issue in light of the amendments, setting aside the previous order without costs and scheduling a new hearing before the Assistant Registrar, Income Tax Appellate Tribunal.

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Issues involved: Interpretation of Section 80HHC of the Income Tax Act u/s 28(IIId) regarding exclusion of profit from the sale of DEPB Licenses.

Summary:
The High Court of Delhi heard an appeal related to the assessment year 2001-02, concerning the exclusion of profit from the sale of DEPB Licenses for computing the deduction under Section 80HHC of the Income Tax Act. A substantial question of law was framed regarding the correctness of excluding such profits.

After the appeal was admitted, retrospective amendments were made to the Income Tax Act, including the addition of Section 28(IIId) and corresponding changes in Section 80HHC, Explanation baa. These amendments were introduced by the Taxation Laws (Amendment) Act, 2005, with retrospective effect from 1st April, 1998.

In light of these amendments, the High Court directed the tribunal to reconsider the matter afresh as it necessitates factual examination and details. The tribunal was instructed to decide the issue again in view of the retrospective amendment. The previous tribunal order on the matter was set aside, and there was no order as to costs. The parties were scheduled to appear before the Assistant Registrar, Income Tax Appellate Tribunal to fix a date for the new hearing.

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