AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (1) TMI 1136
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....d that the assessee had shown total sales of Rs. 2,68,19,167/- and the major purchases amounting to Rs. 1,57,79,667/- were in respect of manufactured goods from handicrafts dealers and the other purchases of raw material were of only Rs. 19,61,868/-. The assessee claimed deduction u/s 10BA of the Act for a sum of Rs. 39,74,254/-. In order to examine the claim of the assessee, the Assessing Officer reproduced the provision of Section 10BA of the Act and stated that the production or manufacturing of the articles or things was an essential and absolute conditions alongwith other conditions. He also asked the assessee to provide the purchase register of all the items and from the copies of the said register furnished by the assessee, the Assessing Officer noticed that the assessee purchased finished goods from handicrafts dealers. The Assessing Officer listed out the parties from whom goods were purchased as mentioned in HForm. The total purchases from such parties worked out to Rs. 89,63,932/-. The Assessing Officer also listed out parties from whom manufactured goods were purchased as mentioned in H-form. The total purchases from such parties were amounting to Rs.18,22,432/-and in a....
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....so examined the expenses incurred on the above heads. He has not pointed/doubted out any mistake on above purchases and manufacturing expenses in his assessment order. The important fact is that the appellant has claimed various expenses but the Assessing Officer has not doubted genuineness nor giving any finding that the same was utilized otherwise or same have been sold as it is. Infact, these materials were utilized for preparing the raw material into finished products. The appellant unit is established in sizable infrastructure facilities spreading and also having sufficient plant and machinery to carry out various manufacturing activities. So all these facts prove that the appellant is actively engaged in the manufacturing activity. In this regard, it is also not out of place to mention that the Assessing Officer only denied the claim of deduction by holding purchases of raw material were actually handicrafts which the appellant exported besides this, he has not raised any objection regarding any other conditions given in Section 10BA for to be eligible for deduction u/s 10BA. 3.10 During the course of the appellate proceeding, the appellant has pointed out that in the earlie....
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.... or activity have been brought by the Assessing Officer to suggest that there is any change in facts. 3.11 In view of the above facts, discussion made in the above para and submission of the appellant and past record and various decisions cited above, I hold that the appellant is eligible for deduction u/s 10BA. The Assessing Officer was not justified in rejecting the claim of deduction/s 10BA to Rs. 39,74,254/-. The grounds raised in this regard are allowed." 6. The Ld. CIT(A) while deleting the above addition, also observed in para 4.1 and 4.2 of the impugned order as under:- "4.1 In the assessment order, the Assessing Officer has also mentioned that the appellant has claimed deduction u/s 10BA of DEPB amount of Rs. 12,57,121/- DDB amount of Rs. 49,120/- and VKUY amount of Rs. 20,51,871/-. The Assessing Officer has further mentioned that the DEPB, DDB and VKUY receipts do not form part of the eligible profit u/s 10BA in view of discussion made in the assessment order. But no separate addition was made on this account by the Assessing Officer. The Assessing Officer considered it in total addition of Rs. 39,74,254/-. However, I find that the issue has been decided by the Hon'ble....
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.... eligible profit derived u/s 10BA. In view of the above, the Assessing Officer is directed to allow the claim of the appellant u/s 10BA". Now the department is in appeal. 7. The learned D.R. supported the order of the Assessing Officer. The learned counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the issue under consideration is squarely covered by various decisions of this Bench of the Tribunal including the decision in the case of the assessee, therefore, the Ld. CIT(A) was fully justified in directing the Assessing Officer to allow the claim of the assessee by following decision of this Bench of the Tribunal. It was further submitted that this issue is squarely covered vide common order dated 21/02/2013 in assessee's own case in I.T.A. Nos. 24 & 25/Jodh/2011 for the assessment years 2007-08 and 2008-09 decided alongwith other cases. 8. We have considered the submissions of both the parties and carefully gone through the material available on record. In the present case, it is noticed that a similar issue having identical facts has already been adjudicated in favour of the assessee vide aforesaid referred to orde....
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....n export shipping freight is nothing but a part of export profit. In respect of the 'interest-income', it is pleaded that the interest paid is more than the interest received and, therefore, the 'interest received' cannot be treated as income other than the export-profit. It is pleaded that interest receipts, under identical circumstances, have been allowed by the revenue in assessee's own case. Apart from this, the ld. A.R. has sought support from the decision of Hon'ble Orissa High Court in the case of Tata Sponge Iron Ltd. 292 ITR 175 [Orissa] inter-alia. Against the relief allowed qua DDB/DEPB, the case of the revenue, as put forth by the ld. CIT(A), is that these receipts being not a part of export profit, are not eligible for deduction u/s 10BA of the Act. He has further cited the facts, law and relevant precedents in support of A.O's findings. In respect of this very issue we have recently taken a view while deciding the case of M/s Suraj Exports India Vs. ITO in ITA No. 336/Jodhpur/2011 for A.Y. 2008-09 decided on 31.01.2013. The following paragraphs of the above orders are being extracted for ready reference, to decide this issue, as under: "8. We have cogitated rival arg....
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....argeable to Income-tax under the head "profits and gains of business or profession". (iiic) any duty of customs or excise re-paid or re-payable as drawback to any person against exports under the Customs and Central Excise Duties Drawback Rules, 1971; (iiid) any profit on the transfer of the Duty Entitlement Pass Book Scheme, being the Duty Remission Scheme under the export and import policy formulated and announced under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992); (iiie) any profit on the transfer of the Duty Free Replenishment Certificate, being the Duty Remission Scheme under the export and import policy formulated and announced under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992); In the light of above discussion, we find that the assessee is entitled to deduction u/s 10BA on DEPB as in accordance with section 28 of the Act these are business income." 10. This decision has been approved by Hon'ble Bombay High Court and the decision is reported in 66 DTR 85 (Bombay) I.T.A.T. Indore Special Bench in the case of M/s. Maral Overseas Limited Vs ACIT reported in 136 ITD 177 has held this issue in favour ....
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.... the undertaking only is to be considered for working out the profits and gains as are derived by an undertaking from export out of India of eligible articles or things. The profits and the gains of the business of the undertaking is to be worked out as per the provisions of section 28(i). This does not include the profits of items does not include the profits of items under s.s. (iiia), (iiib), (iiic), (iiid) and (iiie) etc. Duty Draw Back and any profit on transfer of DEPB. Section 28 itself makes it abundantly clear that the profit on account of Duty Draw Back or on transfer of DEPB will not form part of profit and gains of the business or profession which was carried on by the assessee as discussed above. The plain reading of Section 10BA which deals with export of certain articles or things will make it clear that 'such profits' as are derived from the export out of India shall be allowed from the total income of the assessee. Sub Section (1) of Section 10BA is subject to the provisions of S.Ss. 2, 3, 5, 6 and 7 but s.s. 4 lays down a method of computation for the purpose of sub section (1). Likewise, the sale proceeds of DEPB cannot be considered as part of turnover as it is ....