Cit v. Atul Limited

D.K Tyagi, J.M:— This Miscellaneous Application arising out of order of the Tribunal in ITA No. 157.Ahd/2007 dated 24.7.2009 has been filed by the Revenue wherein it is stated that the issue of exclusion of DEPB entitlement for computation of deduction u/s. 80IB of the Act is no more res-integra in view of the decision of Hon'ble Supreme Court in the case of Luberty India v. CIT dated 31.8.2009 arising out of SLP (VC) No. 5827/07 wherein the Hon'ble Court held that duty draw back receipt/DEPB benefits do not form part of net profits of eligible industrial undertaking for the purposes of section 80I/80IA/80IB of the Act. Therefore, the above issue may kindly be reconsidered in view of the decision of the Hon'ble Apex Court and pass necessary order accordingly.

2. At the time of hearing at the outset the ld. counsel for the assessee pointed out that the Revenue had filed an appeal against the order of the Tribunal dated 24.7.2009 in ITA No. 157.Ahd/2007 before the Hon'ble Gujarat High Court. (Copy of order is placed on record). The Hon'ble Gujarat High Court in Tax Appeal No. 2534 of 2009 vide its oral order dated 18.07/2011 has reversed the decision of the Tribunal by observing as under:—

“1. Revenue has challenged the judgment of the Tribunal dated 24.7.2009 raising following question for our consideration:—

“Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by CIT(A) and thereby deleting the disallowance of claim of Rs. 1,29,46,027/- made u/s. 80IB of the Act.”

2. Counsel for the Revenue pointed out that the Tribunal relied on the decision of Delhi High Court in the case of Commissioner Of Income-Tax v. Eltek Sgs P. Ltd. reported in (2008) 300 ITR 6 (Del) to hold that the benefits of DEPB would qualify for reduction under section 80IB of the Income-tax Act, 1961. Before the Tribunal the decision of Punjab and Haryana High Court in the case of Liberty India v. Commissioner Of Income Tax . reported in (2009) 317 ITR 218 (SC) approving the view of the Punjab and Haryana High Court was cited by the Revenue to contend that Punjab and Haryana High Court had taken a different view from that of the Delhi High Court. However, the Tribunal followed the decision in the case of Delhi High Court.

3. Learned counsel for the Revenue further pointed out that ultimately in appeal the Apex Court in the case of Liberty India v. Commissioner Of Income Tax . (supra) approving the view of the Punjab and Haryana High Court, held that benefit of DEPB and duty draw back would not form part of the net profit for computing deduction u/s. 80IB of the Act.

4. Counsel for the Revenue was not in a position to dispute this fact, namely that the issue now stands squarely covered in favour of the Revenue by virtue of the decision of the Apex Court in the case of Liberty India v. Commissioner Of Income Tax . (supra).

5. In the result, the question is answered in favour of the Revenue. The Tribunal's judgment to the above extent is reversed. The appeal is disposed of accordingly.”

In view of above, the ld. AR submitted that the M.A filed by the Revenue has become infructuous and the same may be dismissed. The ld. DR did not object to this submission of the ld. counsel of assessee.

3. After considering the rival submissions and perusing the record, we are of the view that since the Hon'ble High Court vide its order has reversed the order of the Tribunal and the issue has been decided in favour of the Revenue, the Miscellaneous Application filed by the Revenue has become infructuous and hence the same is dismissed.

5. The Miscellaneous Application filed by the Revenue is dismissed.