J.K. Ranka, J. - (1.) This batch of Income Tax Appeals is directed against order of the Income Tax Appellate Tribunal, Jaipur (for short, 'Tribunal') and since the controversy raised and the substantial question of law admitted by this Court is same, for the sake of convenience and as agreed by counsel for the parties, the bunch of appeals are being decided by this common judgment.
(2.) The brief facts are being taken from DB Income Tax Appeal No. 42/2008 (Commissioner of Income Tax v/s. M/s. Garment Crafts). This appeal was admitted on the following substantial questions of law: - - "(i) Whether in the facts and circumstances of the case, the ITAT has not acted illegally and perversely in reversing the order passed by the CIT (A) as well as Assessing officer for rejection of books of accounts and estimating the GP rate despite the fact that no quantitative details for verification was furnished by the assessee. (ii) Whether in the facts and circumstances of the case the ITAT has not acted perversely and illegally in directing to calculate the deduction of both 80 -IB on total income".
(3.) The respondent -assessee in this appeal derives income from export of readymade garments and primarily is an exporter of such goods. The assessee furnished its return of income declaring an income of Rs. 44,71,080/ - and thereafter a revised return was filed showing total income at Rs. 31,42,390/ - in which deduction u/Sec. 80 -IB of the Income Tax Act was claimed by the assessee. The assessee, as aforesaid, claimed deduction u/Sec. 80 -IB of the Act @30% at Rs. 66,43,472/ - on the total business income of Rs. 2,21,44,906/ -. The assessee had claimed deduction in respect of entire profits of business which included export incentives to the tune of Rs. 1,02,02,570/ - and it was claimed by the assessee that firstly the income of the entire business has to be computed under the head "Income from business and profession" and then 30% of such income is allowable as deduction u/Sec. 80 -IB and accordingly the same was claimed as a deduction @30% as it derived such benefit from an industrial undertaking. The Assessing Officer (for short, 'AO'), however, was of the view that in so far as the export incentives received to the tune of Rs. 1,02,02,570/ - is concerned, since it does not constitute profit and gain derived from the assessee's industrial undertaking, there being no nexus with the profit of business/business income, therefore, the AO excluded the same for consideration and out of purview of Sec. 80 -IB. He while disallowing relied upon judgments of Hon'ble Apex Court in the case of CIT v/s. N.C. Budhiraja & Company: : (1993) 204 ITR 412 (SC); Cambay Electric Supply Industrial Company Limited v/s. CIT: : (1978) 113 ITR 84 (SC), and CIT v/s. Sterling Foods: : (1999) 237 ITR 579 (SC) and held that it is income earned on sale of import entitlements of duty draw back and excluded the same and reduced it from total business income of Rs. 2,21,44,906/ - and accordingly held that deduction u/Sec. 80 -IB is available on the actual business income/profit derived on Rs. 1,19,42,336/ -and on the basis whereof deduction u/Sec. 80 -IB of Rs. 35,82,700/ - is allowable as against claimed by the assessee at Rs. 66,43,472/ -.;