2026 (2) TMI 882

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....of the assessing officer in denying deduction to the extent of Rs. 1,52,07,079/- under Section 80-IC of the Act on account of duty drawback of the said amount, holding that the same is not derived from industrial undertaking? (ii) Whether the Tribunal erred in law in upholding the action of the assessing officer in denying deduction of Rs. 6,58,683 under Section 80-IC of the Act on account of exclusion of gross interest on KDR from the eligible profits, holding that the same is not derived from industrial undertaking? 2. At the beginning of the submission, Mr. Rohit Jain, learned counsel for the appellant submitted that that he does not press the appeal qua question no.(ii). 3. The appeal is, therefore, dismissed qua question....

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.... which the appellant had paid at the time of export of the goods? 8. Question no. (i) is decided against the appellant in light of the judgment of Hon'ble the Supreme Court in Liberty India (supra) in which Hon'ble Court had held thus:- "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 drawback, and such similar items 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 separa....

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....2024 for AY 2013-14 has accepted the appellant's submissions and allowed the appeal with a direction to the Assessing Officer (AO) to deduct the excise and customs duties paid by the appellant-assessee while purchasing the raw materials from the duty drawback it had received. 10. He further submitted that the said orders of the Tribunal have attained finality, as the same were not challenged by the Income Tax Department by way of appeal before this Court. 11. For the purpose of completion of the arguments, learned counsel for the appellant added that after the matters were remanded by the Tribunal, the AO undertook the exercise and passed assessment orders and gave the benefit to the assessee as directed by the Tribunal. 12. Mr. An....

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....e other two years, it gets such advantage. 16. While deciding the appeals of AY 2013-14 and AY 2015-16, the Tribunal has dilated upon this issue and gave its reason for the said direction, which we reproduce as under:- "8. It was submitted that duty component embedded in purchases debited in the profit and loss account exceeds the amount of duty drawback of Rs. 1,92,64,540/- received during the year under consideration, thereby not resulting in any profit from the incentive by way of duty drawback. In view of the aforesaid, It was submitted that since there was no profit from the incentive received by the appellant by way of duty drawback, the question of any such profit being included in the eligible profit of the undertaking/ ....