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Income Tax Appellate Tribunal, KOLKATA BENCH “B” KOLKATA
Before: Shri N.V.Vasudevan & Shri Waseem Ahmed
Shri S. Dasgupta, Addl. CIT-DR अपीलाथ� क� ओर से/By Appellant Shri Manish Tiwari, FCA ��यथ� क� ओर से/By Respondent 22-02-2018 सुनवाई क� तार�ख/Date of Hearing 20-04-2018 घोषणा क� तार�ख/Date of Pronouncement आदेश /O R D E R PER Waseem Ahmed, Accountant Member:- This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-15, Kolkata dated 03.06.2015. Assessment was framed by ITO Ward-51(4), Kolkata u/s 143(3)/144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 31.12.2008 for assessment year 2006-07. Shri S. Dasgupta, Ld. Departmental Representative appeared on behalf of Revenue and Shri Manish Tiwari, Ld. Authorized Representative appeared on behalf of assessee.
Grounds raised
by Revenue which reads as under:- A.Y. 2006-07 ITO Wd-51(4) Kol. Vs. Sh. Rabindra Nath Sikdar Page 2 “i) Whether on the facts and in respect to the circumstances, the Ld. CIT(A)- 15,Kolkata erred in restricting the net profit to 1% of turnover just relying on the net profit rates declared in earlier years without appreciating the fact that the books of account were not produced during the assessment year under consideration and the assessee had failed to justify the book result being declared by him. ii) Whether on the facts and in respect to the circumstances, the Ld. CIT(A)- 15,Kolkata erred to restrict the addition on sale of DEPB @ 1% on Rs.42,93,826/-- even when the assessee is not in possessions of the relevant documents like the DEPB license and then value and the entire DEPB has been declared received in one go by the assessee during the year under consideration as Ld. CIT(A) has himself admitted in his order. The assessee could not establish the entire sale during the year and hence, entire value of DEPB at Rs.42,93,825/- is taxable during the year under consideration as per section 28(iib).”
3. First issue raised by Revenue in ground No. (i) is that Ld. CIT(A) erred in reducing the estimated profit from 5% to 1% of the turnover.
Briefly stated facts are that assessee in the present case is an individual and carrying on the export business of rice and pulses under the name and style of M/s R.N.S. Enterprises. The assessee for the year under consideration filed his return of income declaring taxable income of ₹84,397/- only whereas the total turnover declared by assessee at ₹7,26,63,305.63 only. Subsequently the case was selected for scrutiny under CASS module and accordingly notice u/s 143(2)/142(1) of the Act was served upon the assessee. But assessee made no compliance to the notice issued u/s 142(1) of the Act. Accordingly, AO framed the assessment ex parte u/s 144 of the Act by estimating the profit on the total turnover of ₹7,26,63,305/- @ 5%. Thus the profit was estimated and worked out at ₹36,33,165/- only. Therefore the same income was added after reducing the profit already declared by the assessee to the total income of assessee.
Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted that profit on the total turnover @ 5% is highly excessive and unreasonable. The AO has also not given any basis for estimating the profit @ 5% of the turnover. The assessee also submitted that the rate of estimated profit @ 5% has been imported from the provision of A.Y. 2006-07 ITO Wd-51(4) Kol. Vs. Sh. Rabindra Nath Sikdar Page 3 Section 44AF of the Act which is applicable to the traders having turnover up to ₹40 lacs only. It is a well settled law that the AO while estimating the income under best judgment assessment does not possess the arbitrary powers. Thus, the AO should be guided by the Rules of justice & equity and goods concise. The assessee in support of his claimed relied on the judgment of jurisdictional High Court in the case of CIT vs. Ranicherra Tea Co. Ltd. reported in 207 ITR 979 (Cal). Similarly, the assessee also submitted that there is no denial that the AO has to use some kind of guesswork while making the assessment u/s 144 of the Act. But the guesswork must be reasonable and connected with the material available on record. In this regard, the assessee relied on the judgment of Hon'ble Supreme Court in the case of State of Kerala vs. C Velukutty 60 ITR 239 (SC). The assessee further submitted that best judgment assessment must be based on an honest and fair estimate of income. In this regard the assessee relied on the judgment of Hon'ble Supreme Court in the case of Brij Bhusan Lal Pradumank Kumar vs. CIT 115 ITR 524 (SC). It was also submitted that the profit declared by assessee in earlier years should be considered while determining the income on estimated basis under the provision of Section 144 of the Act. The assessee in this connection filed the details of net profit vis-à-vis turnover of the earlier years as reproduced below:- A.Y Net profit Turnover Net profit % 2004-05 2,13,300/- 4,14,70,858/- 0.51% 2005-06 4,94,178/- 2,17,20,4766/- 0.23% 2006-07 1,75,180/- 726,63,305/- 0.24%
It is crystal clear from the above chart, that the appellant never achieved a net profit of 5% of turnover in the past. Even the net profit for 3 years on an average works to 0.326% only. Applying the average GP on 0.326% on total turnover of Rs.7,26,63,305/- the addition on account of net profit cannot exceed Rs.61,702/- (0.326% of 7,26,63,305 – actual NP i.e. Rs.1,75,180)
ITA No.1097/Kol/2015 A.Y. 2006-07 ITO Wd-51(4) Kol. Vs. Sh. Rabindra Nath Sikdar Page 4 Ld. CIT(A) after considering the submission of assessee deleted the addition made by the AO in part by observing as under:- “Ground of Appeal
No.3 This ground assails the action of the AO in estimating the business profit of the assessee at Rs.36,33,165/- calculated @ 5% of the declared turnover after rejecting the trading results claimed. the AO took the figure of the turnover from the profit & loss account of thee assessee at Rs.7,26,63,305/-. The AO had noted that the net profit declared by the assessee in his profit t& loss account is very low at Rs.1,75,180/-. The assessee has not been able to make an substantial arguments to challenge the action of the AO except to argue that the books of account should not have been rejected in the first place. The assessee has relied on several case laws to argue that the estimating of the business profits should have a reasonable basis and that the AO has arbitrarily adopted a net profit rate of 5% which was never achieved by the assessee also in Assessment Year of the earlier assessment years. The assessee has claimed that the net profit @ 5% of turnover is usually applied incase covered u/s. 44AF in the case of a retail trader and that this deemed profit rate cannot be extended to the appellant since his turnover is in excess of Rs.40 lakhs and he is an exporter. The argument of the assessee is that he exports rice and pulses and as the export market is highly competitive the Govt. of India has to step in and provide DEPB license to compensate the exporters. The appellant has filed a comparative chart of his earlier assessment year’s data to show that he had never earlier achieved a net profit of 5% and the net profit earned by the assessee in last three assessment years was as under:- Assessment Year Net profit Turnover Percentage 2004-05 2,13,300/- 4,14,70,858/- 0.51% 2005-06 4,49,418/- 2,17,20,476/- 0.23% 2006-07 1,75,180/- 77,26,63,305/- 0.24% The assessee has also relied on a recent decision of ITT ‘B’ Bench, Kolkata dated 01..01.2015 in in the case of ACIT v. Sitalamata Rice Mills Pvt. Ltd. wherein the ITAT has relied upon the past trading results of the appellant assessee and reduced the n.p rate estimated by the AO. The AR also relied on the other case laws mentioned in the written submissions. The submission of the appellant are linked to the grounds of appeal no 1 & 2 above and those grounds are already held against the assessee. The issue narrows down to a reasonable estimation of thee net profit of the assessee from his trading activity. In view of the nature of export trade and the need for the Government to introduce DEPB scheme it is apparent that the estimated rate of net profit from export business adopted by AO @ 5% is unsupported. Is also an established ratio of the case laws on the subject that while making a best judgment assessment the AO is indeed required to make a fair estimate. Though arbitrariness cannot be avoided in such estimates, the name should not appear to be whimsical and erratic. Having regard to the totality of facts and legal position concerning the manner of estimating the net profit and the past records of the assessee it is held that a determination of net profit from trading activity @ 1% of total turnover i.e. Rs.7,26,333/- will A.Y. 2006
07. ITO Wd-51(4) Kol. Vs. Sh. Rabindra Nath Sikdar Page 5 meet the ends of justice and equity. The unprecedented export demand in FY 2005-06 also indicates that the assessee must have enjoyed economics of scale in procurement of goods. As a result the addition on account of the estimated net profit of the assessee from his export trading is restricted to Rs.7,26,333/-- and the balance amount of Rs.29,06,832/- (Rs.36,33,165/- minus Rs.7,26,333/-) is directed to be deleted. The ground of appeal No. 3 of the assessee is partly allowed as above.” The Revenue, being aggrieved is in appeal before us.
6. Ld. DR before us submitted that necessary document as desired by AO during the course of assessment proceeding were not produced therefore the AO had to resort to the provision of Section 144 of the Act while framing the assessment. The assessee has not also filed the books of account and other document even before Ld. CIT(A). The profit declared in the returns of income filed by assessee in earlier years were processed u/s 143(1) of the Act. As such, no scrutiny assessment was carried out u/s 143(3) of the Act. Therefore, the profit declared by assessee in earlier years cannot be considered while estimating the income under best judgment assessment. On the other hand, Ld. AR for the assessee submitted that assessee was engaged in the export business to Bangladesh, Nepal. The AO has not disputed the sales and purchase declared by assessee in its books of account. The AO failed to give the basis for estimating the income @ 5% as well as no comparable cases was brought on record. Once the books of account are rejected then the past history becomes the guiding factor for estimating the income. Ld. CIT(A) estimated the income @ 1% after considering the past history of assessee as well as the remand report from the AO. Therefore, the profit determined @ 1% is based on scientific basis. Ld. AR relied on the order of Ld. CIT(A).
We have heard the rival contentions of both the parties and perused the materials available on record and the judicial decisions cited by the parties. In the present case assessee failed to comply the notice issued u/s 142(1) of the Act therefore the AO framed the assessment u/s 144 of the Act by estimating A.Y. 2006-07 ITO Wd-51(4) Kol. Vs. Sh. Rabindra Nath Sikdar Page 6 the profit @ 5% of the total turnover declared by assessee. However, Ld. CIT(A) reduced the rate of profit from 5% to 1% after considering the past history of assessee. From the foregoing discussion, we note that the best judgment assessment framed u/s 144 of the Act has not been disputed / challenged by assessee. Now the limited issue which arises for our consideration is the rate of profit to be applied on the turnover of the assessee. In this regard, we note that the AO has applied rate of profit @ 5% without giving any basis and after ignoring the profit declared by assessee in the earlier years. In our considered view, it is the duty of the AO to provide some basis for adopting the rate of profit @ 5%. It appears that AO has been guided by the provision of Sec. 44AF of the Act wherein the income is determined on presumption basis. It is undisputed fact that provision of Sec. 44AF are applicable only to those assessees having turnover up to ₹40 lakh only and engaged in the business of retail trading. In the case on hand none of the condition as specified u/s 44AF of the Act was satisfied. Therefore, in our considered view the AO has erred in estimating the income at a rate by taking the shelter u/s 44AF of the Act. It is settled proposition of law that AO while estimating the profit under best judgment assessment has to act judicially and honestly. The audited financial statement of the current year as well as profit declared by assessee in earlier years cannot be ignored while estimating the profit under best judgment assessment. The assessee for all the years had duly filed return of income which was not selected under scrutiny u/s 143(3) of the Act. Regarding the selection for scrutiny proceedings it is the policy of the Revenue and the assessee has no role to play in selecting the same under scrutiny. Therefore, in our considered view, it is imperative to take the guidance from the history of assessee. In this regard we rely on the order of this Co-ordinate Bench in the case of ACIT vs. Sitalamata Rice Mills Pvt. Ltd. in ITA No.2317/Kol/2013 dated 01.01.2015, the relevant extract of the order is reproduced below:- A.Y. 2006-07 ITO Wd-51(4) Kol. Vs. Sh. Rabindra Nath Sikdar Page 7 “Now when the books of accounts are not available and estimating the gross profit is to be resorted to the situation prevailing in the industry has to be taken in account. It has been brought out by the ld. Counsel of the assessee that in the report of Govt. of India, Ministry of Small Scale Industry in the rice mill industry the average gross profit on sales was considered at 7.5%. Similarly in the case of Fathudhinga Rice Mills (Supra) Hon'ble Punjab & Haryana High Court has affirmed the gross profit of 4.2%. In this view of the matter also the profit declared by the assessee cannot be said to be lower than prevailing in the industry.” 7.1 We also find support & guidance from the judgment of jurisdictional High Court in the case of CIT vs. Ranicherra Tea Co. Ltd. (supra) wherein it was held as under : “It was no doubt true that the facts of the instant case justified ex parte best judgment assessment under section 144 because of the defaults committed by the assessee but in making a 'best judgment assessment', the Assessing Officer cannot act dishonestly or vindictively or capriciously because he must exercise the judgment in the matter. In making a 'best judgment', the Assessing Officer does not possess absolute arbitrary authority to assess any figure he likes and although he is not bound by strict judicial principles he should be guided by rules of justice, equity and good conscience. The limits of the power of the Assessing Officer are implicit in the expression 'best of the judgment'. Though there is an element of guess work in a 'best judgment assessment', it shall not be a wild one but shall have reasonable nexus to the available material and the circumstances of each case. As reflected from the facts of the instant case the ITO did not disclose any basis or reasons for determining the quantum of loss as 'Nil'. He should have given his reasons for arriving at a particular figure of income so that the assessee may be enabled to appreciate the mental process leading to the assessmen t and the figure assessed Such order being subject to appeal need also to be a speaking order. The Assessing Officer did not at all look into the audited balance sheet accompanying the return nor did he reject the accounts as unreliable. Therefore, the ITO was not justified in rejecting the loss return filed by the assessee-company in toto without examining the audited accounts and other statements on file as well as the past records of the assessee-company. As regards the justification of computation of loss by the Commissioner (Appeals) after looking into the audited accounts as well as the past records himself, it has been held by the Supreme Court in CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225 and reiterated in Jute Corpn. of India Ltd. v. CIT [1991] 187 ITR 688 that the AAC has plenary powers in disposing of an appeal The scope of his power is co-terminus with that of the ITO. He could do what the ITO could do and also direct him to do what he had failed to do in view of these decisions, it was to beheld that in disposing of an appeal from an assessment order under section 144, the first appellate authority need not confine itself only to the materials on record at the time of assessment but it may make such enquiries as it thinks fit. Therefore, the A.Y. 2006-07 ITO Wd-51(4) Kol. Vs. Sh. Rabindra Nath Sikdar Page 8 procedure adopted by the Commissioner (Appeals) in the instant case was fully justified in deciding the case on his own instead of remanding the same. In fact, the ITO should have himself followed the same procedure which the Commissioner (Appeals) did.”
In this regard, we also find support & guidance from the judgment of Hon'ble Supreme Court in the case of State of Kerala vs. C Velukutty 60 ITR 239 (supra) wherein it was held as under:- “The limits of the power are implicit in the expression "best of his judgment". Judgment is a faculty to decide matters with wisdom truly and legally. Judgment does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guess-work in a "best judgment assessment", it shall not be a wild one, but shall have a reasonable nexus to the available material and the circumstances of each case.” 7.2 In this regard, we also find support & guidance from the judgment of Hon'ble Supreme Court in the case of Brij Bhusan Lal Pradumank Kumar vs. CIT 115 ITR 524 (SC) (supra) wherein it was held as under : “The authority making a best judgment assessment must make an honest and fair estimate of the income of the assessee and though arbitrariness cannot be avoided in such estimate the same must not be capricious but should have a reasonable nexus to the available material and the circumstances of the case.” In view of the above, we hold that the rate of profit estimated by Ld. CIT(A) is correct and in accordance with the provision of law. Thus, we uphold the order of Ld. CIT(A) and this ground of Revenue is dismissed.
Next issue raised by Revenue in this appeal is that Ld. CIT(A) erred in treating 1% of sale value of DEPB as income of the assessee.
The assessee during the year has shown sale of DEPB license of ₹42,93,826/- only which was treated by the AO as income from other sources. Thus, the sale of DEPB was added to the total income of assessee. A.Y. 2006-07 ITO Wd-51(4) Kol. Vs. Sh. Rabindra Nath Sikdar Page 9 10. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted that there is no ambiguity that sale of DEPB license is part and parcel of business income in terms of provision of Section 28(iiib) & (iid) of the Act. Therefore, AO erred in treating the same as income from other sources. The assessee also submitted that profit margin in case of export business is very meager. Therefore, the Govt. of India provides incentives to the exporters to compete in international market. Therefore, the same is a part and parcel of total turnover of the assessee. Ld. CIT(A) after considering the submission of assessee treated the sale of DEPB license as business turnover of assessee and accordingly applied the profit @ 1% on the sale value of DEPB. Thus, Ld. CIT(A) deleted the addition made by the AO in part by observing as under:- “Ground of Appeal
NO.4: In this ground of appeal the assessee assails the action of the AO. in treating the entire declared sale consideration of DEPB license of Rs. 42,93,826/- as Income from Other Sources and in making a separate addition to the estimated incomes from trading. The assessee has argued that the action of the AO. is contrary to the provisions of section 28(iiib) & (iiid) of the Act itself. The assessee has also relied on the decision of the Supreme Court in Topman Exports v. CIT (2012) 18 Taxman.com 120 (SC) wherein it was held that while the face value of the DEPB will fall under clause (iiib) of Section 28. the difference between sale value and the face value of the DEPB will fall under clause (iiid) of Section 28 of IT. Act. 1961. The contentions of the assessee are considered. It is duly noted that, as per the Act, the sale proceeds of the DEPB licenses cannot be treated as Income from Other Sources in view of the mandate of section 28 (iiib) & (iiid) of the Act. There is another angle to this issue. The A.R has argued that the sale of DEPB license cannot be considered as a separate and distinct item because of its direct and close nexus with export turnover, and therefore the A.R. has sought to include the sum received as part of the business turnover only for the purposes of estimation of profits from export trade. The oral arguments of the AR were that it is a standard practice for exporters of goods to compute their profitability, by factoring in the export incentives received from the Government and it is also the business practice to determine cost of goods net of export incentive for the purpose of pricing! profitability of such export. Further, it was claimed that in order to gain entry into foreign markets and to be competitive therein, exporters operate on thin margins, in which case their selling price may not be very different from their cost of purchases as in the case of the present assessee, A.Y. 2006-07 ITO Wd-51(4) Kol. Vs. Sh. Rabindra Nath Sikdar Page 10 The Supreme Court in the case of Topman Exports (supra) had observed that the objective of DEPB scheme is- to neutralize the incidence of customs duty paid on future import for the purposes of export of products. The neutralization of the cost of customs duty under the DEPB scheme is through granting a duty credit against the export product and this credit can be utilized for paying customs duty on any item which is freely importable. The DEPB is issued against the exports to the exporter and is transferable by the exporter. The DEPB is a kind of assistance given by the Government of India to an exporter to pay customs duty on its imports and it is receivable once exports are made and an application is made by the exporter for DEPB. The Supreme Court has also held that the cost of acquiring DEPB is not nil because the person acquires it by paying customs duty on the import content of the export product and the DEPB which accrues to a person against exports has a cost element in it. The Supreme Court in this case while disapproving the High Court's order which had been impugned before it had declared that "the High Court has failed to appreciate that DEPB represents part of the cost incurred by a person for manufacture of the export product and hence even where the DEPB is not utilized by the exporter but is transferred to another person, the DEPB continues to remain as a cost to the exporter. When, therefore, DEPB is transferred by a person, the entire sum received by him on such transfer does not become his profits. It is only the amount that he receives in excess of the DEPB which represents his profits on transfer of the DEPB." Further the Hon'ble Supreme Court of India, in the case of Vikas Sales Corporation v. Commissioner of Commercial Taxes [1996] 102 STC 106;(1996) (2) SUPP. SCR 204 had already held that 'REP licenses' are goods and are chargeable to tax under the State sales tax Act. As per the Import Policy in vogue for the years before the Supreme Court, there were provision for issuance of "Replenishment licences" (for short "REP Licences"). The objective behind the licences was to provide to the registered exporters the facility of importing the essential inputs required for the manufacture of the products exported. The essential idea was to encourage exports and for that purpose import licences called REP. Licences were issued equal to the prescribed percentage of the value of exports. These licences were made freely transferable. The Supreme Court held the REP to be goods. Similarly in the case of Philco Exports v. Sales tax Officer 93 (2001) DLT 56, 2002 (64) DRJ 211, the Hon'ble Delhi High Court held that 'DEPB' are goods and upheld the right of the State of Delhi to tax the same on their transfer. In the case of the assessee the face value of the DEPB is a cash assistance taxable u/s 28(iiib) of the Act and is definitely a business receipt but it has a cost already included in the purchases and export costs as indicated by the Supreme Court in Topman Exports (supra). The Act declares the receipts as taxable business income u/s 28(iiib) of the Act to prevent any claim of being termed as a capital receipt and for the purposes of calculation of deduction u/s. 80HHC of the Act. Further when the DEPB is sold the difference between its Face Value and the Sale Value is its profit on its transfer and is taxable u/s 28(iiid) of the Act. The legal position is very clear up to this stage. The confusion arises because the assessee has not been able to prove the Sale Proceeds of the DEPB and the assessee is also not in possession of the A.Y. 2006-07 ITO Wd-51(4) Kol. Vs. Sh. Rabindra Nath Sikdar Page 11 relevant documents like the DEPB licences and their values. Even the export sales are believed to be made by the assessee as an associate of one R. G Traders and the few Export Bill Payment Advices produced by the assessee also carry the names of both the parties. The assessee, however, has not explained the same. The entire DEPB has been declared received in one go by the assessee on 16.1.2006 whereas the few DEPB sale papers sought to be produced are for various dates and made out in the name of various parties. Under the circumstances it cannot be held that the sum of Rs. 42,93,826/- represents only the DEPB Sale and the face value sale value of the DEPB is not available, Therefore the sum declared as DEPB is also taken as turnover of the assessee only and 1% of the said receipts are further held to represent taxable profits of the assessee. As a result, in addition to the net profit declared in ground of appeal no. 3 above, the income of the assessee is further enhanced by a sum of Rs.4,29,383/-. As a corollary, the addition of Rs.42,93,826/- is reduced to Rs.4,29,383/- and the assessee gets a relief of Rs.38,64,443/-. Consequently the ground of appeal No.4 of the assessee is treated as partly allowed.” The Revenue being aggrieved by this order of Ld. CIT(A) is in appeal before us.
11. Ld. DR before us submitted that the gross value of DEPB license should be added to the total income of assessee. Ld. CIT(A) himself has recorded in his order that necessary details representing the face value as well as sale value of DEPB were not available. He also submitted that nothing was produced before the AO. Therefore, the matter should be restored back to the file of AO for fresh adjudication. He vehemently relied on the order of AO. On the other hand, Ld. AR submitted that there is no ambiguity under the provision of the Act that the sale value of DEPB is part and parcel of total turnover of the business of assessee. Ld. AR also submitted that assessee in the earlier years has declared profit less than 1% of its total turnover which is inclusive of DEPB. Therefore, for the year under consideration the rate of 1% should be adopted on the above amount of sale of DEPB. He relied on the order of Ld. CIT(A).
We have heard the rival contentions of both the parties and perused the materials available on record. In the instant case, AO has treated the revenue from the sale of DEPB as income from other source. However, Ld. CIT(A) A.Y. 2006-07 ITO Wd-51(4) Kol. Vs. Sh. Rabindra Nath Sikdar Page 12 reversed the order of AO by holding that the amount of sale for DEPB is part and parcel of the total turnover of assessee. Now the issue before us arises whether the amount of DEPB represents the income from other source or income from business. We find that there is a explicit provision u/s 28(iiib) of Act which clearly says that the amount of DEPB will be taxed under the head “income from business and profession” The relevant portion of Section 28(iiib) reads as under:- Profits and gains of business or profession. 8328. 84The following income shall be chargeable to income-tax under the head “Profits and gains of business or profession”,— (i) the profits and gains85 of any business or profession85 which was carried on by the assessee at any time during the previous year ; (ii) any compensation85 or other payment due to85 or received by85,— (a) any person, by whatever name called, managing the whole or substantially the whole of the affairs of an Indian company, at or in connection with the termination of his management or the modification of the terms and conditions relating thereto; (b) any person, by whatever name called, managing the whole or substantially the whole of the affairs in India of any other company, at or in connection with the termination of his office or the modification of the terms and conditions relating thereto ; (c) any person, by whatever name called, holding an agency in India for any part of the activities relating to the business of any other person, at or in connection with the termination of the agency or the modification of the terms and conditions relating thereto ; 86[(d) any person, for or in connection with the vesting in the Government, or in any corporation owned or controlled by the Government, under any law for the time being in force, of the management of any property or business ;] (iii) income derived by a trade, professional or similar87 association from specific services87performed for its members ; 88[(iiia) profits on sale of a licence granted under the Imports (Control) Order, 1955, made under the Imports and Exports (Control) Act, 1947 (18 of 1947) ;] 89[(iiib) cash assistance (by whatever name called) received or receivable by any person against exports under any scheme of the Government of India ;] A plain look at the above statutory provision makes it clear without any ambiguity that the amount of profit / sale from the DEPB will be part and parcel of the total turnover of the business of assessee. We also note that the incentives in the form of DEPB are given to the exporters as there is cut throat A.Y. 2006-07 ITO Wd-51(4) Kol. Vs. Sh. Rabindra Nath Sikdar Page 13 competition in the international market. Once we have held that the gross sale value of DEPB is part and parcel of the turnover of the business of assessee then in our considered view the same rate of profit will be applied in determining the taxable income of assessee. From the above proposition, we do not find any infirmity in the order of Ld. CIT(A) and accordingly we uphold the same. This ground of Revenue’s appeal is dismissed.