PRAFFUL EXPORTS

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ITA/194/2012HC DelhiDLHC01038631201217 May 2012Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE R.V.EASWAR2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the issue is squarely covered by the Supreme Court's decision in Topman Exports v. Commissioner of Income Tax (Mumbai). In that case, it was held that DEPB credit is covered by Section 28(iiib) of the Income Tax Act. Consequently, the deduction under Section 80HHC must be computed while considering Explanation (baa) and Sub-section 3 to Section 80HHC. The question of law is answered in the negative, meaning the ITAT was not right in its holding. The appeal is allowed in favour of the appellant-assessee and against the respondent-revenue. The assessing officer is directed to re-compute the deduction under Section 80HHC in line with the Supreme Court's decision in Topman Exports. No issue was expressly left undecided.

What were the facts?

This judgment concerns appeals filed by Prafful Exports against the Commissioner of Income Tax (CIT) for assessment years not specified in the provided text. The appeals challenge an order passed by the Income Tax Appellate Tribunal (ITAT). The core dispute revolves around the treatment of export incentives in the form of Duty Entitlement Pass Book (DEPB) credit for the purpose of calculating deductions under Section 80HHC of the Income Tax Act, 1961. The High Court of Delhi is re-framing a question of law previously posed on March 23, 2012, due to clerical errors.

What were the issues?

1. Whether the Income Tax Appellate Tribunal was right in holding that export incentive in the form of DEPB credit is not to be taken into consideration for the purpose of Explanation (baa) and Sub-section 3 to Section 80HHC of the Income Tax Act, 1961? Assessee's Contention: The judgment does not explicitly record the assessee's arguments. However, the framing of the question implies the assessee likely argued that DEPB credit should not be considered for the purpose of Explanation (baa) and Sub-section 3 to Section 80HHC. Revenue's Contention: The judgment does not explicitly record the revenue's arguments. However, the framing of the question implies the revenue likely argued that DEPB credit should be considered for the purpose of Explanation (baa) and Sub-section 3 to Section 80HHC.

Which sections of the Income-tax Act were involved?

Section 80HHC,Section 28(iiib)

AI-generated summary — verify with the full judgment below

t. $-12 to 15 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 191/20r2.rTA 19212012.19312012 & 19412012 PRAFFUL EXPORTS ..... APPellant Through: Dr.Rakesh Gupta and Ms.Rani Kiyala, Advocates CIT ....' ResPondent Through: Mr.SanjeevRajpal, Advocate l CORAM: |' HON'BLE MR. JUSTICE SANJIV KIIANNA HON'BLE MR. JUSTICE R.V.EASWAR ORDER oh 17.05.2012 By an order dated 23.3.2012, the following question was framed: ' "Whether the Income Tax Appellate Tribunal was right in holding that export incentive in form of DEPB receipt not to be taken into under Explanation baa to section 80HHC of the Income Tax Act. 196I?" We have examined the order dated 23.3.2012 and it is seen that there are clerical errors in the question framed on 23.3.2012. The same is , reframed and should read as under:- "Whether the Income Tax Appellate Tribunal was right in holding that export incentive in form of DEPB credit is not to be taken into consideration for the purpose of Explanation (baa) and Sub- Digitally Signed By:AMULYA Signature Not Verified

t: I section 3 to Section 80 HHC of the Income Tax Act,196l? Having heard learned counsel for the parties, we hold that the issue is squarely covered by the decision of the Supreme Court in the case of Topman Exports v. Commissioner of Income Tax (Mumbai); (20I\ 2a7 CTR (SC) 353. In the said decision, it has been held that DEPB credit is covered by Section 28 (iiib) of the Income Tax Act and, accordingly, deduction has to be computed while considering Explanation (baa) and Sub- section 3 to Section 80HHC. The question of law mentioned above is, accordingly answered in negative, i.e., in favour of the appellant-assessee and against the respondent- revenue. The assessing officer will re-compute the deduction under Section SQHHC in terms of the ratio and the decision of the Supreme Court in the case of Topman Exports (Supra). The appeal is, accordingly, disposed of. SANJIV KITANNA, J rlI\ I N\\"-1"-{ ' R.V.EASWAR, J MAY 17,2012 SV

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