Euro Footwear Ltd.,, Kanpur vs Assessee

These two Miscellaneous Applications are preferred on behalf of the assessee against the combined order of the Tribunal dated 13.11.2014 with the submission that the Tribunal has decided the issue regarding the claim of the assessee for deduction u/s 80IB raised in these two appeals without considering written submissions running into 8 pages, relevant Para being 8 to 12 and the following three judgments on which reliance was placed as per these paras of written submissions :-

1) B. Desraj vs. CIT, 301 ITR 439 (SC)

2) Nissan Exports vs. CIT, 217 Taxman 397 (SC)

3) Vikas Kalra vs. CIT, 345 ITR 557 (SC)

It is also a contention that Synopsis about the term "derived from" was also filed but was not considered in the tribunal order.

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2. The ld. D.R. has placed reliance upon the order of the Tribunal with the submission that since the Tribunal has decided the appeal on merit, there is no apparent mistake in the ITAT order rectifiable u/s 254(2).

3. Having given a thoughtful consideration to the rival submissions and from a careful perusal of the order of the Tribunal vis-à-vis the Miscellaneous Application, we find that there is no merit in these MAs because as per the tribunal order, rival submissions were considered and the issue regarding the claim of the assessee for deduction u/s 80IB raised in these two appeals assessee was decided by following the judgment of Hon'ble apex court rendered in the case of Liberty India vs. CIT, 317 ITR 218 (SC) and hence, discussion about written submissions, Synopsis and cited judgments in the tribunal order was not considered necessary. Simply because there is no discussion about written submissions, Synopsis and cited judgments, it cannot be said that the same were not considered.

4. Still, we make observations about the three cited judgments. All these three judgments are in context of deduction u/s 80HHC. For deduction u/s 80HHC, if an income is held to be business income, not affected by clause (baa) of Explanation to section 80HHC, it will be considered for deduction u/s 80HHC in the ratio of export turnover to total turnover. But for availing deduction u/s 80IB, even for business income, it has to be established that the same is derived from the eligible industrial undertaking. It was held in the judgment of Hon'ble apex court rendered in the case of Liberty India vs. CIT, 317 ITR 218 (SC) that export incentive is not derived from the eligible industrial undertaking. Hence, for this issue, this judgment is direct on section 80IB and the same is to be followed in preference to other judgments on the issue of deduction u/s 80HHC.

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5. Regarding Synopsis about the term "derived from" available on pages 14 to 25 of the paper book, we find that the assessee has reproduced the relevant portion of the judgment of Hon'ble apex court rendered in the case of Liberty India vs. CIT, 317 ITR 218 (SC) and there it is noted that "Incentive profits are not profits derived from the eligible business u/s 80IB. They belong to the category of ancillary profits of such undertakings." From these observations of Hon'ble apex court, it is clear that in this case also, Hon'ble apex court has considered the incentive profit also as business profit but not a profit derived from the eligible business u/s 80IB but it was considered in the category of ancillary profits of such undertakings. Hence this Synopsis about the term "derived from" is also not relevant.

6. As per above discussion, we find that the synopsis, written submissions and three cited judgments are not affecting the decision as per impugned tribunal order and hence these MAs are devoid of merit

7. In the result, both Miscellaneous Applications are dismissed.

Order was pronounced in the open court on the date mentioned on the captioned page.

Sd/. Sd/. [SUNIL KUMAR YADAV] [A. K. GARODIA] JUDICIAL MEMBER ACCOUNTANT MEMBER

DATED:30th April, 2015 JJ:2703

Copy forwarded to: 1. Applicant 2. Respondent :-4-:

3. CIT(A) 4. CIT 5. DR Assistant Registrar