COMMISSIONER OF INCOME TAX Vs. ACCENT FOR LIVING

JUDGEMENT

(1.) The instant appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 (for brevity the Act) is directed against order dated 13-3-2009 passed by the Income Tax Appellate Tribunal, Delhi Bench 1, New Delhi in ITA No. 1577/Delhi/2005 in respect of the assessment year 2001-02. The Tribunal has refused to include the amount of Rs. 1,41,06,095 under the head Business profit. The aforesaid issue was decided in favour of the Assessee by following the view taken by the Delhi High Court in the case of CIT v. Eltek SGS (P.) Ltd.,2008 300 ITR 61. The revenue has claimed that following substantive questions of law would arise for determination of this Court:

(2.) We have heard the learned Counsel for the parties.

(3.) The controversy on the question whether the amount of Duty Draw Back and profit on sale of licenses could be regarded as income derived from business of industrial undertaking and would qualify for deduction under Section 80-IA of Act has been decided by a Division Bench of this Court in the case of Liberty India v. CIT, 2007 293 ITR 520. The aforesaid view has been upheld by Honble the Supreme Court in the case of Liberty India v. CIT, 2009 317 ITR 218. It has been categorically held that Duty Draw Back receipt and DPEB benefits do not form part of the net profits of eligible industrial undertakings for the purposes of deduction under Section 80-I/80-IA/80-IB of the Act. Accordingly, shorn of factual details, the issue has to be decided against the Assessee and in favour of the revenue. The same principle of law would apply to profit derived on sale of licences.