- (1.) HEARD the learned counsel for the parties.
(2.) THIS appeal was admitted on the following substantial question of law by this Court on 11th January, 2010:- "Whether for the purpose of sub-section iii(d) of Section 28 and Section 80 HHC of the Income Tax Act, it is the profit on transfer of the Duty Entitlement Pass Book Scheme that is required to be taken into consideration and not the quantum of sale proceeds?" Learned counsel for both the parties initially argued the case, but during the course of arguments, they conceded that point involved in the present case has already been considered and answered by the Hon'ble Apex Court in Topman Exports versus Commissioner of Income- Tax reported in [2012] 342 ITR 49 (SC), therefore, the present appeal is liable to be allowed, for the reasons given by the Hon'ble Apex Court in the case of Topman Exports (supra).
(3.) THE Hon'ble Apex Court has held as under:- "The aforesaid discussion would show that where an assessee has an export turnover exceeding Rs. 10 crores and has made profits on transfer of DEPB under clause (d) of section 28, he would not get the benefit of addition to export profits under third or fourth proviso to sub- section (3) of section 80 HHC, but he would get the benefit of exclusion of a smaller figure from "profits of the business" under Explanation (baa) to section 80HHC of the Act and there is nothing in Explanation (baa) to section 80HHC to show that this benefit of exclusion of a smaller figure from "profits of the business" will not be available to an assessee having an export turnover exceeding Rs. 10 crores. In other words, where the export turnover of an assessee exceeds Rs. 10 crores, he does not get the benefit of addition of ninety per cent. of export incentive under clause (iiid) of section 28 to his export profits, but he gets a higher figure of profits of the business, which ultimately results in computation of a bigger export profit. The High Court, therefore, was not right in coming to the conclusion that as the assessee did not have the export turnover exceeding Rs. 10 crores and as the assessee did not fulfill the conditions set out in the third proviso to section 80HHC(iii), the assessee was not entitled to a deduction under section 80HHC on the amount received on transfer of the DEPB and with a view to get over this difficulty the assessee was contending that the profits on transfer of the DEPB under section 28(iiid) would not include the face value of the DEPB. It is a well-settled principle of statutory interpretation of a taxing statute that a subject will be liable to tax and will be entitled to exemption from tax according to the strict language of the taxing statute and if as per the words used in Explanation (baa) to section 80HHC read with the words used in clause (iiid) and (iiie) of section 28, the assessee was entitled to a deduction under section 80HHC on export profits, the benefit of such deduction cannot be denied to the assessee." ;