- (1.) HEARD Shri Shambhu Chopra, learned standing counsel for the appellant.
(2.) THIS appeal under section 260 -A of the Income Tax Act 1961 has been filed against the order of the Income Tax Appellate Tribunal dated 17.11.2011 in ITA No. 263/LKW/2011. The assessee in his return with regard to assessment year 2006 -2007 has claimed deduction under section 80 IB of the Act on the amounts of incentives by way of duty draw back for treating them as profits derived from industrial undertaking. The Assessing Officer completed the assessment order vide his order dated 26.8.2008 and did not allow the deduction under section 80 IB of the Act.
(3.) A penalty order was issued on 2.12.2010 under section 271(1)(c). The judgment of the Apex Court in Liberty India versus Commissioner of Income Tax 225 CTR 233(2009) has been relied and referred to while passing the penalty order where the Apex Court has laid down that duty draw back/DEPB are incentives which flow from the schemes framed by the Central Government, hence the incentives/profits are not profits derived from the eligible business and therefore duty draw back received/DEPB benefits do not form part of net profit of the industrial undertaking for the purposes of Sections 80 IA & IB.;