TaxTMI 
TaxTMI 
2012 (9) TMI 253
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....explaining the reasons for such delay. After considering the submissions by the Revenue the delay is condoned. 3. At the time of hearing the Bench pronounced as under :- "Delay condoned. Revenue's appeal is dismissed in all the appeals. Pronounced in open court. Detailed order will follow." Now the detailed order is as follows: 4. In all the three appeals of the revenue the only effective ground raised by the revenue is as under :- "Ld.CIT(A) erred in deleting the disallowance of deduction u/s 80HHC relying on the decision of M/s.Topman Export Vs ITO [318 ITR (AT) 87] since the Hon'ble Mumbai High Court in the case of M/s.Kalpataru Colors & Chemicals has reversed the decision [ITA No.2887 of 2009 dated 29/06/2010]." ....
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..../- By sale of DEPB During the year Rs.1,23,06,217/- By Duty Drawback Rs. 3,01,426/- Total Rs.27,58,69,645/- Total Rs.27,58,69,645/- 9.2. The business profit as per I.T.Act will be computed as follows :- Business profit as above Rs.1,51,69,599/- Add: Depreciation as per Companies Act Rs. 48,45,378/- Rs.2,00,14,977/- Less : Depreciation as per I.T.Act Rs.1,63,22,357/- (Rs.91,44,909(current depr.)+Rs.71,77,448 B/f depr.) Total Business Profit Rs. 36,92,620/- 9.3. Now on the basis of the above recast P & L A/c. the deduction u/s 80HHC will be computed, as per the decision of Topman Exports, in the following manner : 1) T....
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....s.58,17,987/- determined by the A.O. is reduced to Rs.7,81,387/-" 5.2. Similarly the ld. CIT(A) has made the recomputation u/s 80HHC of the IT Act for the subsequent assessment years i.e. Rs.22,90,846/- in A.Yr.2001-02 and Rs.49,90,050/-. In A.Yr.2002-03. 5.3. However, he further directed the AO to call for the record from assessee and verify these amounts and if any variation is found in these figures the recomputation described in paras 9.1. to 9.4 shall be changed accordingly while giving effect to the appellate order. 5.4. Aggrieved by this now the revenue is in appeal before us by stating that the decision of Special Bench in the case of Topman Exports vs ITO has been set aside by Hon'ble Mumbai High Court in the case of M/s.K....
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....e. Under cl. (iiid) of s. 28, any profit on transfer of DEPB is chargeable to income- tax under the head "Profits and gains of business or profession" as an item separate from cash assistance under cl. (iiib). The word "profit" means the gross proceeds of a business transaction less the costs of the transaction. 'Profits', therefore, imply a comparison of the value of an asset when the asset is acquired with the value of the asset, when the asset is transferred and the difference between the two values is the amount of profit or gain made by a person. As DEPB has direct nexus with the cost of imports for manufacturing an export product, any amount realized by the assessees over and above the DEPB on transfer of the DEPB would represent prof....
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....s not become his profits. It is only the amount that he receives in excess of the DEPB which represents his profits on transfer of the DEPB. The High Court has sought to meet the argument of double taxation made on behalf of the assessees by holding that where the face value of the DEPB was offered to tax in the year in which the credit accrued to the assessee as business profits, then any further profit arising on transfer of DEPB would be taxed as profits of business under s. 28(iiid) in the year in which the transfer of DEPB took place. This view of the High Court is contrary to the language of s. 28 under which "cash assistance" received or receivable by any person against exports such as the DEPB and "profit on transfer of the DEPB"....