Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Income Tax Act 1961 ss.80-IB and 28 Deduction u/s 80- IB Denial of |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Customs Act, 1962 (52 of 1962) Income Tax Act, 1961 (43 of 1961) |
Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Income Tax Act, 1961 – ss. 80-IB and 28 – Deduction u/s 80- IB – Denial of – For AY 2008-09 the respondent-assessee (partnership firm) filed its return declaring its income as nil, claiming deduction of Rs. 70,197/- on account of Duty Entitlement Pass Book Scheme (DEPB) and of Rs. 76,27,636/- on account of receipts under the Duty Drawback – Respondent claimed the same as “Profit/ gains of business/ profession” under ss. 28(iiic) and (iiib) of the Act of 1961– Deputy commissioner disallowed the deductions – The said order was upheld by Commissioner of Income Tax (Appeals) – ITAT allowed the deductions – However, the High Court restored the order passed by the Deputy commissioner and held that the respondent is not entitled to the deduction u/s.80-IB of Act of 1961 with respect to the receipts under the Duty Drawback Scheme and DEPB – On appeal, held: For claiming deductions under s. 80-IB, it must be on the “profits and gains derived from industrial undertakings” mentioned in s. 80-IB – It was held in Liberty India that DEPB/Duty Drawback Schemes are incentives which flow from the schemes framed by the Central Government or from section 75 of the Customs Act, 1962 and hence, incentive profits are not profits derived from the eligible business u/s. 80-IB – Following the law laid down in the case of Sterling Foods, Mangalore and Liberty India, no error was committed by the High Court in holding that on the profit from DEPB and Duty Drawback claims, the respondent-assessee shall not be entitled to the deductions u/s. 80-IB – Such income cannot be said to be an income “derived from” industrial undertaking and even otherwise as per Section 28(iiid) and (iiie), such an income is chargeable to tax – Judgment of High Court upheld. |
Judge | Hon'ble Mr. Justice M.R. Shah |
Neutral Citation | 2023 INSC 331 |
Petitioner | M/s. Saraf Exports |
Respondent | Commissioner Of Income Tax, Jaipur-iii |
SCR | [2023] 4 S.C.R. 338 |
Judgement Date | 2023-04-10 |
Case Number | 4822 |
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