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Commissioner of Income Tax Vs Tipson Cycles Pvt. Ltd.

Case No: Income Tax A. No. 434 of 2010

Date of Decision: Sept. 13, 2010

Acts Referred: Income Tax Act, 1961 — Section 260A, 28, 80HHC, 80HHC(3)

Hon'ble Judges: Ajay Kumar Mittal, J; A.K. Goel, J

Bench: Division Bench

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Judgement

Adarsh Kumar Goel, J.@mdashThis appeal has been preferred by the assessee u/s 260-A of the Income Tax Act, 1961 (for short, ""the Act"")

against the order dated 28.10.2009 of the Income Tax Appellate Tribunal, Chandigarh in I.T.A. No. 1044/CHD/2007 for the assessment year

2004-05 proposing to raise following substantial questions of law:

(i) Whether on the facts and circumstances of the case, the Hon''ble Income Tax Appellate Tribunal is justified in law in not holding that 90%

amount of DEPB was rightly excluded while working ""Profits of the Business"" as per explanation (baa) to Section 80HHC read with clause (iiid)

and (iiie) of Section 28 of the Income Tax Act, 1961 inserted by Taxation Laws (Amendment) Act, 2005?

(ii) Whether on the facts and circumstances of the case, the Hon''ble Income Tax Appellate Tribunal is justified in law in not holding that the whole

amount of consideration of DEPB that the assessee received is profit, because of the cost of same is Nil to the assessee?

(iii) Whether on the facts and circumstances of the case, the Hon''ble Income Tax Appellate Tribunal is justified in law in not holding that 90% of

profit on transfer of export incentives is not to be increased while computing profits u/s 80HHC(3)(a) as the assessee failed to fulfill the conditions

as contained in Third or Fourth proviso inserted by the Taxation Laws (Amendment) Act, 2005 as the export turnover of the assessee company is

more than Rs. 10 Crores?

(iv) Whether on the facts and circumstances of the case, the ITAT is right in law in not holding that the total sale consideration inclusive of face

value of DEPB and premium amount received thereof represents profit chargeable under Sections 28(iiid) and 28(iiie) of the Income Tax Act,

1961?

(v) Whether on the facts and circumstances of the case, the ITAT is right in law in not holding that profit on transfer of DEPB entitlement

represents the entire amount inclusive of premium of sale of such DEPB?

(vi) Whether on the facts and circumstances of the case, the ITAT is right in law in holding that the word ""profit"" referred to in Sections 28(iiid) and

28(iiie) of the Income Tax Act, 1961 means the difference between the sale price of DEPB and the face value of DEPB ignoring the fact that the

entire amount represents the profit in the hands of assessee?

(vii) Whether on the facts and circumstances of the case, the ITAT is right in law in deducting the face value of DEPB from sale price of DEPB for

calculating profit under Sections 28(iiid) and 28(iiie) of the Income Tax Act, 1961 as if the face value is the cost incurred by the assessee to

acquire the DEPB?

(viii) Whether on the facts and circumstances of the case, the ITAT is right in law in holding that the word profit referred to in Sections 28(iiid) and

28(iiie) of the Income Tax Act, 1961 requires any artificial cost to be interpolated to the extent that the face value of DEPB/DFRC should be

deducted from the sale proceed for the purpose of determination of deduction u/s 80HHC of the Income Tax Act, 1961?

(ix) Whether on the facts and circumstances of the case, the ITAT is right in law in not appreciating that deduction u/s 80HHC of the Income Tax

Act, 1961 was rightly computed in accordance with amendment made by the Taxation Laws (Amendment) Act, 2005 with retrospective effect

from 1.4.1998?

2. Learned Counsel for the appellant states that the matter is covered in favour of the revenue by orders of this Court dated 16.8.2010 in I.T.A.

No. 301 of 2010 CIT v. Victor Forgings and I.T.A. No. 299 of 2010 CIT v. F.C. Sondhi, wherein after noticing the judgment of the Bombay

High Court in CIT v. Kalpataru Colours and Chemicals 2010 (42) DTR 193, the matter was remanded to the Tribunal for fresh decision in

accordance with law.

3. Since we find that the matter is covered by earlier orders of this Court, we dispose of this appeal in same terms. For this purpose, we have not

considered it necessary to issue notice to the respondent, but we give liberty to the respondent to move this Court if they have any grievance

against this order.