TaxTMI 
TaxTMI 
2013 (4) TMI 639
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....preme Court of India in the case of M/s. Top Man Exports & Others 2012 STPL (WEB) 98 SC when the facts of the same are different. 2. On the facts and circumstances whether the ld. CIT(A) was right in deleting the addition made on account of disallowance of deduction u/s 80HHC when there was amendment made to section 80HHC (2nd Amendment Act, 2005), deemed to have been inserted from Ist day of April, 1998." 3. Grounds raised by the Revenue in ITA No.259(Asr)/2012 are reproduced as under: "1. On the facts and circumstances whether the ld. CIT(A) was right in deleting the addition made on account of disallowance of deduction u/s 80HHC by relying upon the decision of deduction of Hon'ble Supreme Court of India in the case of M/s. Top Man Exp....
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....u/s 80HHC of I.T. Act on sale of export entitlements. The relevant part of the decision of Hon'ble S.C. (supra) is reproduced as under: "We are, thus of the considered opinion that while the face value of DEPB will fall under clause (iiib) of section 28 of the Act, the difference between the sale value and eh face value of DEPB will fall under clause (iiid) of section 28 of the Act and the High Court was not right in taking the view in the impugned judgment that the entire sale proceeds of the DEPB realized of transfer of the DEPB and not just the difference between the sale value and the ace value of the DEPB represent profit on transfer of the DEPB. We may now point out the errors in the impugned judgment of the High Court, the first re....
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.... for manufacture of the export product and hence even where the DEPB is not utilized by the exporter but is transferred to another person, the DEPB continues to remain as a cost to the exporter. When, therefore, DEPB is transferred by a person, the entire sum received by him on such transfer does not become his profits. It is only the amount that he receives in excess of the DEPB which represents his profits on transfer of DEPB." 6. Respectfully following the decision of Hon'ble Apex Court, I hereby direct the A.O. to adopt the figure of profit on sale of export entitlement and not the entire sale proceeds as done by him. Ground No.1 is thus allowed. Ground No.2 relates to disallowance made out of miscellaneous expenses (RS.25,000 out of R....