M.M. Kumar, J. - (1.) THE revenue has preferred I.T.A. Nos. 495 and 496 of 2006 against the common order dated 28 -9 -2005, passed by the Income Tax Appellate Tribunal, Delhi Bench, 'SMC, New Delhi ('the Tribunal'), in respect of assessment year 2001 -02 in the case of Lakhvinder Singh (IT. Appeal No. 5169 (Delhi) of 2004), and in respect of assessment year 2001 - 02 in the case of G.S. Exports (IT Appeal No. 5175 (Delhi) of 2004). It is claimed that the following substantial question of law under Section 260A of the Income Tax Act, 1961 Income Tax Act would arise for determination of this Court: Whether on the facts and in the circumstances of the case, the ITAT was right in law in sustaining the order of the Commissioner (Appeals) directing the assessing officer to allow deduction under Section 80 -IB on the amount of duty drawback received by the assessee which cannot be termed as income "derived from" an industrial undertaking ? Facts in brief may first be noticed from I.T.A. No. 495 of 2006.
(2.) THE assessee -respondent is a proprietary concern and filed its return declaring total income of Rs. 75,000 on 29 -10 -2001. The assessing officer completed the assessment under Section 143(3) of the Act on a total income of Rs. 2,97,670, vide order dated 16 -1 -2004 (A -1). The assessee has claimed deduction under Section 80 -IB, amounting to Rs. 4,12,930, on the total business profit which included an amount of Rs. 13,80,673 on account of duty drawback. However, the assessing officer applying the judgment of Hon'ble the Supreme Court in the case of CIT v. : 1999ECR481(SC) , declined to exclude from the total business profit the amount so claimed while working out the allowable deductions under Section 80 -IB of the Act. Feeling aggrieved, the assessee -respondent challenged the order dated 16 -1 -2004 (A -1) before the Commissioner (Appeals), who differed with the assessing officer and held that the duty drawback received by the assessee -respondent was inextricably linked with the production cost of the goods manufactured by the assessee -respondent. Accordingly, it was held that the duty draw -back was trading receipt of the industrial undertaking. The Commissioner (Appeals) directed the assessing officer to allow deduction under Section 80 -IB on the amount of duty drawback of Rs. 13,60,673.
(3.) ON further appeal filed before the Tribunal, the decision taken by the Commissioner (Appeals) was confirmed and the appeal of the revenue was dismissed, vide its order dated 28 -9 -2005. The view of the Tribunal is based on the view taken by Delhi Bench of the Tribunal in the case of Asstt. CIT v. Vipin Sardana, (2005) 148 Taxman 41 (Mag.). The aforementioned view of the Tribunal is discernible from paras 6 and 7 which reads as under: 6. I have carefully considered the matter. I am respectfully bound by the orders of the Delhi Benches of the Tribunal in identical cases cited above where the controversy has been resolved in favour of the assessee after noticing the judgment of the Gujarat and Delhi High Courts. In the case of Vipin Sardana (supra), the Division Bench of the Delhi Tribunal has noted that there is no judgment of the jurisdictional High Court, which is the Punjab & Haryana High Court in the present cases, available on the issue and, therefore, the decision which is in favour of the assessee should be followed as held by the Supreme Court in CIT v. : [1973]88ITR192(SC) . The Division Bench has also noted the earlier order of the SMC Bench, Delhi in the case of Anand International, which has also been cited before me. Copies of all these orders have been filed. In these circumstances and having regard to the rule of consistency and judicial discipline, I decide the issue against the department and in favour of the assessee, respectfully following the orders of the Delhi Bench of the Tribunal. 7. I may also observe in passing that it seems to me that there is a difference between the phraseology of Section 80 -1, which was considered by the Hon'ble Delhi High Court and that of Section 80 -IB which is the subject -matter of controversy in the present cases and which has risen before the Delhi Benches of the Tribunal in the above cited cases. Whereas Section 80 -1 refers to "profits and gains" derived from an "industrial undertaking", Section 80 -IB refers to "profits and gains derived from any business referred to in Sub -sections (3) to (11), (11 A) & (11B) (such business being hereinafter referred to as the eligible business)Sub -section (3) refers to industrial undertakings located in different areas classified as backward.;