Tribunal grants appeal, waives delays, deletes disallowances on foreign exchange, import licenses, interest income.

The tribunal allowed the appeal, condoning the delay and deleting all disallowances related to foreign exchange fluctuation gain, profit from sale of import licenses, and interest income.

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Issues Involved:
1. Delay in filing the appeal.
2. Disallowance of deduction claim under section 10B on account of foreign exchange fluctuation gain.
3. Disallowance of deduction claim under section 10B on account of profit from the sale of import licenses.
4. Disallowance of deduction claim under section 10B on account of interest income.

Detailed Analysis:

1. Delay in Filing the Appeal:
The assessee's appeal suffered from a delay of 985 days in filing. The learned counsel attributed the delay to the fact that the CIT(A) had decided another appeal involving the same issues, and the assessee had been pursuing its remedy before the tribunal. The tribunal found the delay to be neither intentional nor deliberate and thus condoned the delay, allowing the appeal to be taken up for adjudication on merits. It was noted that the CIT(A) had affirmed the disallowances based on an earlier order, and the issues remained unadjudicated on merits.

2. Disallowance of Deduction Claim under Section 10B on Account of Foreign Exchange Fluctuation Gain:
The first disallowance challenged was the foreign exchange fluctuation gain of Rs. 20,95,814. The assessee, having a 100% export-oriented business unit, argued that the gain arose from the difference in exchange rates at the time of booking and realization of exports. The tribunal referenced the Gujarat High Court's decision in Principal CIT vs. Asahi Songwon Colors Limited, which treated similar gains as business income. As no legal or factual exceptions were pointed out by the Revenue, the tribunal found no merit in the disallowance and deleted it.

3. Disallowance of Deduction Claim under Section 10B on Account of Profit from Sale of Import Licenses:
The second grievance was the disallowance of Rs. 7,34,634 on account of profit from the sale of import licenses. Both lower authorities had held that such income could not be derived from the export-oriented unit. The tribunal referred to its decision in DCIT vs. Narendra Tea Company (P) Ltd, where it was held that income from the sale of DEPB licenses is an integral part of the business and eligible for exemption under sections 10A/10AA. The tribunal followed this precedent and deleted the disallowance, treating the income from the sale of import licenses as part of the regular business income.

4. Disallowance of Deduction Claim under Section 10B on Account of Interest Income:
The third grievance involved the disallowance of Rs. 23,13,606 as interest income derived from margin money deposits made for availing credit facilities for business purposes. The tribunal noted that in the assessee's case for previous assessment years, similar income was treated as business income and eligible for section 10B deduction. The tribunal maintained judicial consistency and deleted this disallowance as well.

Conclusion:
The tribunal allowed the assessee's appeal, condoning the delay and deleting all the disallowances related to foreign exchange fluctuation gain, profit from the sale of import licenses, and interest income. The order was pronounced in the open court on 09.05.2018.

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