Income Tax Appeal Dismissed: No Deduction for Duty Draw Back & MEIS Income under Section 80IB(11A)

The Tribunal dismissed the assessee's appeal, upholding the disallowance of the deduction claimed for income received from Duty Draw Back Scheme and MEIS under section 80IB(11A) of the Income Tax Act. This decision aligned with the Supreme Court's ruling in M/s. Saraf Exports, clarifying that such income is not eligible for deduction as it is not derived from the industrial undertaking.

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Issues:
The judgment involves the disallowance of deduction claimed under section 80IB(11A) of the Income Tax Act, 1961 for income received from Duty Draw Back Scheme and Merchandise Exports from India Scheme (MEIS).

Facts of the Case:
The assessee, engaged in the sale of shrimps, filed its return of income for the AY 2017-18, declaring a total income of Rs. NIL. The assessing officer disallowed a portion of self-made vouchers while framing the assessment under section 143(3) of the Act. The Principal Commissioner of Income Tax-1, Visakhapatnam, exercising powers under section 263, found that the deduction claimed under section 80IB(11A) was not allowable for income received from Duty Draw Back Scheme and MEIS. The assessee appealed against this decision.

Contested Issue:
The only issue contested by the assessee was the disallowance of deduction claimed for income received from Duty Draw Back Scheme and MEIS under section 80IB(11A) of the Act.

Arguments and Decision:
The assessee argued that recent decisions by the Supreme Court indicated that income from Duty Draw Back and DEPB schemes are not eligible for deduction under section 80IB(11A). The Tribunal considered these arguments and the orders of the Revenue Authorities. While past decisions allowed deductions for export incentives, the Supreme Court's ruling in the case of M/s. Saraf Exports clarified that income from Duty Draw Back and DEPB schemes is not derived from the industrial undertaking and thus not eligible for deduction under section 80IB(11A). The Tribunal upheld the order of the Principal Commissioner under section 263 based on the Supreme Court's decision.

Conclusion:
In line with the Supreme Court's ruling, the Tribunal dismissed the appeal of the assessee, affirming the disallowance of the deduction claimed for income received from Duty Draw Back Scheme and MEIS under section 80IB(11A) of the Act.

Final Decision:
The appeal of the assessee was dismissed by the Tribunal, following the Supreme Court's decision, and there was no order as to costs.

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