2013 (12) TMI 408

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....g the fact that there is a net loss even after adjusting DEPB profit. 3. The assessee in the present case is an individual who filed his return of income on 30-10-2001 declaring total income of Rs.6,90,591/-. In the said return, deduction of Rs.15,46,964/- was claimed by the assessee u/s 80HHC which was initially allowed by the AO in the assessment completed u/s 143(3) vide an order dated 22-03-2004. In the said assessment, certain other additions were made by the AO which the assessee challenged in an appeal filed before the learned CIT(Appeals). While disposing of the said appeal, the learned CIT(Appeals) noted that there was a net loss of Rs.12,17,912/- before applying proviso to section 80HHC(3) of the Act and the assessee, therefore, ....

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.... Taxation Laws (Amendment) Act, 2005 with retrospective effect from 01-04-1998, the learned CIT(Appeals) held that the assessee was entitled for deduction u/s 80HHC in respect of DEPB profit. He also held that the decision of Hon'ble Supreme Court in the case of Liberty India (supra) relied upon by the AO was in the context of section 80IB dealing with income derived from industrial undertaking and the same was, therefore, not applicable to the issue involved in the assessee's case. Aggrieved by the order of the learned CIT(Appeals), the Revenue has preferred this appeal before the Tribunal. 4. We have heard the arguments of both the sides and also perused the relevant material on record. It is observed that the claim of the assessee for d....

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....rofits computed u/s 80HHC(3) has to be further increased by the amount which bears to 90% of any sum referred to, inter alia, in clause (iiid) of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee. The said clause (iiid) has also been inserted in section 28 with retrospective effect from 01-04-1998 and includes within its ambit profit on the transfer of DEPB. A combined reading of second proviso to section 80HHC and clause (iiid) of section 28 makes it clear that the assessee having export turnover not exceeding Rs.10 crores during the year under consideration, is entitled for deduction u/s 80HHC in respect of DEPB profits as claimed in the return of income and the l....