COMMISSIONER OF INCOME TAX Vs. RAJ OVERSEAS

JUDGEMENT

(1.) THIS order will dispose of IT Appeal Nos. 225 and 232 of 2010, as both the appeals raised common question of leviability of penalty when the assessee had put forward the claim which was found not acceptable. In IT Appeal No. 225 of 2010, the Revenue has claimed following substantial questions of law :

(2.) THE assessee is manufacturer and derived income from exports. The assessee claimed deduction under s. 80 -IB of the Act in respect of income from duty draw back. The AO disallowed the said claim on the ground that the income derived from duty draw back was not income derived from industrial undertaking, as held by the Hon'ble Supreme Court in CIT vs. Sterling Foods India (1999) 153 CTR (SC) 439 : (1999) 237 ITR 579 (SC). Penalty was also levied. The CIT(A) upheld the view of the AO but the Tribunal deleted the penalty with the following observations :

(3.) WE have heard learned counsel for the Revenue.