TaxTMI 
TaxTMI 
2012 (6) TMI 375
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....considered the current submissions made by the assessee and the submissions made before the CIT(A), including the case laws cited therein and found that the assumption of jurisdiction by the AO is within the parameters of the provisions of section 147 read with section 148 of the Act. Therefore, we do not find any justification to interfere with the findings of the Ld. CIT(A), on the issue in question. Consequently, this ground of appeal of the assessee is dismissed." 5. Respectfully following the order of the Tribunal dated 9-10-2009 passed in assessee' s own case, we decide this issue against the assessee. 6. Ground No.2 reads as under:- "2. That on the facts and in the circumstances of the case, the learned CIT(A) has erred in upholding the action of the A.O., that deduction u/s.80IB is not available on Duty drawback and DEPB receipts. Deduction u/s.80IB was available on the entire DEPB receipt and also the duty draw back at Rs.80,71,030/-." 7. Shri Sandeep Vijh, C.A., the learned counsel for the assessee, submitted that this issue is also covered against the assessee by the decision of this Bench of the Tribunal dated 9-10-2009 passed in assessee' s own case in I.T.....
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....ny located in Mumbai may have a business of building housing projects or a shop in Nava Sheva. Onwership of a ship per se will not attract section 80-IB(6). It is the profits arising from the business of a ship which attracts sub-section (6). It is the profits arising from the business of a ship which attracts sub-section (6). In other words, deduction under sub­section (6) at the specified rate has linkage to the profits derived from the shipping operations. This is what we mean in drawing the distinction between profit linked tax incentives and investment linked incentives. It is for this reason that Parliament has confined deduction to profits derived from eligible business mentioned in sub-sections (3) to (11A) [ as they stood at the relevant time]. On more aspect to be highlighted. Each of the eligible business in sub-sections (3) to (1 1A) constitutes a stand-alone item in the matter of computation of profits. That is the reason why the concept of "segment Reporting" stands introduced in the Indian Accounting Standards (IAS) by the Institute of Chartered Accountants of India (ICAI). 14. Analysing Chapter VI-A, we find that Sections 80-IA/80- IA are the Code of themselv....
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....fits of eligible business has got to be rejected in view of the overriding provisions of sub-section (5) of section 80-IA, which are also required to be read into section 80-IB [see Section 80-IB(13)]. We may reiterate that Sections 80I, 80IA and 80-IB have a common scheme and if so read it is clear that the said sections provide for incentives in the form of deduction(s), which are linked to profits and not to investment. On analysis of Sections 80-IA and 80-IB it becomes clear that any industrial undertaking, which becomes eligible on satisfying sub-section (2), would be entitled to deduction under sub-section (1) only to the extent of profits derived from such industrial undertaking after specified date)s-. Hence, apart from eligibility, sub­section(1) purports to restrict the quantum of deduction to a specified percentage of profits. This is the importance of the words "derived from industrial undertaking" as against "profits attributable to industrial undertaking". 16. DEPB is an incentive. It is given under Duty Exemption Remission Scheme. Essentially, it is an export incentive. No doubt, the object behind DEPB is to neutralize the incidence of customs duty payment on ....
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..... 20. AS-2 deals with Valuation of Inventories. Inventories are assets held for sale in the course of business; in the production for such sale or in form of materials or supplies to be consumed in the production. 21. "Inventory" should be valued at the lower of cost and net realizable value (NRV).The cost of "inventory" should comprise all costs of purchase, costs of conversion and other costs including costs incurred in bringing the "inventory" to their present location and condition. 22. The cost of purchase includes duties and taxes (other than those subsequently recoverable by the enterprise from taxing authorities), freight inwards and other expenditure directly attributable to the acquisition. Hence, trade discounts, rebate, duty draw back and such similar terms are deducted in determining the costs of purchase. Therefore, duty drawback, rebate etc. should not be treated as adjustment (credited) to cost of purchase or manufacture of goods. They should be treated as separate items of revenue or income and accounted for accordingly (see page 44 of Indian Accounting Standards & GAAP by Dolphy D'souza).Therefore, for the purposes of AS-2, Cenvat credits should not be in....
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....ndertaking for the purposes of Sections 80I/80IA/80IB of the 1961 Act. 25. The appeals are, accordingly, dismissed with no order as to costs." 7.4 In view of the above discussions, we are of the considered opinion that the issue in question is squarely covered by the decision of the Hon'ble Apex Court in the case of M/s. Liberty India Vs. CIT, dated 31st August, 2009 (supra), as reproduced above. It is essential to point out here that the binding nature of the judicial mandate of the Hon'ble Supreme Court of India, as contained in the decision of M/s. Liberty India Vs. CIT (supra), cannot be obliterated by way of shifting the locus and focus, from the core issue which stands adjudicated by the Hon'ble Supreme Court, in favour of the revenue. Therefore, respectfully following the binding decision of the Hon'ble Supreme Court, as contemplated under Article 141 of the Constitution of India, in the case of M/s. Liberty India Vs. CIT (supra), we decide the issue, as raised in ground No.2 of the present appeal, on the issue of eligibility of deduction of the receipt of DEPB/Duty Drawback benefit u/s 80IB of the Act, in favour of the Revenue and against the assessee. Consequen....