TaxTMI 
TaxTMI 
2009 (11) TMI 576
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....bunal is right in law in rejecting the deduction under section 80-IB in respect of duty drawback ?" 2. The statement of facts culled out from the memorandum of grounds are as follows : The assessee for the assessment year 2004-05 filed a return on November 1, 2004, admitting a total income of Rs. 3,89,97,640. The return was processed under section 143(1) of the Income-tax Act. The assessee claimed deduction under section 80-IB of the Act in respect of duty draw-back amounting to Rs. 2,85,88,324 relating to a small scale unit situated at Panickanpalayam, Perundurai Taluk, Erode District. The Assessing Officer was of the view that duty drawback is not a profit or gain derived from industrial activity and hence it was not e....
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....7 ITR 199 (Mad) T. C. (A) No. 1252 of 2007-[2009] 317 ITR 194 (Mad) dated November 7, 2007, to which one of us (K. Raviraja Pandian J.) was a party, held thus (pages 196-197) :Rs. 4. As far as the first question is concerned, viz., the deduction under section 80-I in respect of duty drawback, the learned counsel for the appellant placed reliance on the Gujarat High Court decision reported in CIT v. India Gelatine and Chemicals Ltd. [2005] 275 ITR 284 wherein it was held that duty drawback was "derived from" the industrial undertaking and, therefore, would be eligible for deduction under section 80-J. The learned counsel for the appellant also pointed out that in the case of duty drawback, the same was given specifically to reduce the cost o....
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....trace from a source; arise from, originate in ; show the origin or formation of. The Division Bench also followed the decision of this court reported in CIT v. Pandian Chemicals Ltd. [1998] 233 ITR 497 (Mad). 7. In the said decision, this court held that profits or gains eligible for deduction under section 80HH must be derived from the actual conduct of the business. This court further held that the mandate of law is that unless the source of the profit is the undertaking, the assessee is not eligible to claim deduction under section 80HH ; that mere commercial connection between the income and the industrial undertaking would not be sufficient. This court held that profits and gains derived from industrial undertaking denotes th....
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.... confirmed by the Supreme Court in the case of Liberty India v. CIT [2009] 317 ITR 218 wherein it was observed as follows (page 234) : "17. The next question is what is duty draw back ? Section 75 of the Customs Act, 1962, and section 37 of the Central Excise Act, 1944, empower the Government ofIndia to provide for repayment of customs duty and excise duty paid by an assessee. The refund is of the average amount of duty paid on materials of any particular class or description of goods used in the manufacture of export goods of specified class. The Rules do not envisage a refund of an amount arithmetically equal to customs duty or Central excise duty actually paid by an individual importer-cum-manufacturer. Sub-section (2) of secti....