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March 2012

Export profit: Deduction u/s.10BA of Incometax Act, 1961: A.Y. 2005-06: DEPB is a profit derived from export business for the purpose of deduction u/s.10BA.

By K. B. Bhujle, Advocate
Reading Time 1 mins
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[CIT v. Arts & Crafts Exports, 246 CTR 463 (Bom.)]

The Tribunal held that DEPB is a profit derived from export business for the purposes of deduction u/s.10BA of the Income-tax Act, 1961. In appeal by the Revenue, the following question was raised:

“Whether on the facts and circumstances of the case, the Tribunal erred in law in holding DEPB as a profit derived from export business for the purpose of deduction u/s.10BA ignoring the ratio of decision in the case of Liberty India v. CIT, (2009) 225 CTR (SC) 233; (2009) 28 DTR (SC) 73; (2009) 317 ITR 218 (SC) having binding force on facts and circumstances of the case?”

The Bombay High Court upheld the decision of the Tribunal and held as under:

“The Counsel for the Revenue fairly states that though the question has been raised by relying upon the decision of the Apex Court in the case of Liberty India v. CIT, the said decision has no relevance to the facts of the present case. In this view of the matter, the question raised by the Revenue cannot be entertained.”

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