IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 206 of 2009 (O&M) Date of decision: 24.8.2009 Commissioner of Income Tax, Karnal ......Appellant Vs. M/s Nice Overseas, 41, Sector 25, HUDA, Panipat. ...Respondent CORAM:- HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MRS.JUSTICE DAYA CHAUDHARY PRESENT: Mr.Sukant Gupta, Standing Counsel for revenue. Mr.Pankaj Jain, Advocate, for assessee. **** ADARSH KUMAR GOEL, J. (Oral) 1. The revenue has preferred this appeal under section 260A of the Income Tax Act, 1961 ( for short, “the Act”) against the order of Income Tax Appellate Tribunal, New Delhi, Bench 'SMC' passed in ITA No. 821/DEL/2006 on 25.7.2006 for the assessment year 2002-03, proposing to raise following substantial questions of law: “1. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in confirming the order of the CIT(A) directing the AO to allow deduction under Section 80IB on the amount of duty drawn back received by the ITA No. 206 of 2009 [2] assessee which cannot be termed as income “derived from” an industrial undertaking as held by the Hon'ble Supreme Court of India in the case of CIT v. Sterling Foods (1999) 237 ITR 579 (SC)”? 2. Whether on the facts and circumstances of the case the Ld. ITAT is right in law in allowing deduction under Section 80IB of the Income Tax Act, 1961 on the total business profits which includes duty drawn back/export incentives without considering the provisions of section 80IB under which the deduction is allowable only from the income derived from the industrial undertaking having direct nexus with the activity of industrial undertaking?” 2. The assessee received export incentives and claimed deduction under Section 80IB of the Act. The claim of the assessee in respect thereof was disallowed following judgment of the Hon'ble Supreme Court in CIT v. Sterling Food, (1999) 237 ITR 579. The said view has been affirmed by the CIT(A) and allowed the claim of the assessee but the Tribunal restored the same, which view was affirmed by the Tribunal. 3. It is not disputed that the matter is covered against the assessee ITA No. 206 of 2009 [3] by the judgment of the Hon'ble Supreme Court in Sterling Food, (supra) and order of this Court dated 9.9.2008 in ITA No. 629 of 2007 (M/s Raj Oversease v. The Commissioner of Income Tax, Ludhiana.) Accordingly, the appeal is allowed. The order of the Tribunal is set aside and that of Assessing Officer is restored. (ADARSH KUMAR GOEL) JUDGE (DAYA CHAUDHARY) August 24, 2009 JUDGE raghav Note: Whether this case is to be referred to the Reporter? ........Yes/No