Income-tax Appeal No.711 of 2010 -1- **** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income-tax Appeal No.711 of 2010 Date of decision: 17.12.2010 The Commissioner of Income-Tax, Karnal ...Appellant Versus M/s Liberty Shoes Ltd. ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr. Yogesh Putney, Advocate for the appellant. **** ADARSH KUMAR GOEL, J ( Oral) . 1. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 against order dated 9.10.2009 passed by the Income Tax Appellate Tribunal, Delhi Bench (D), Delhi in ITA No.139/Del/2009, for the assessment year 2004-05, proposing following substantial questions of law:- “a). Whether on the facts and circumstances of the case, the ITAT was justified in allowing deductions u/s 80HHC on the face value of DEPB in the case where turnover exceeds Rs.10 crores in view of (ii), (iii) and (iv) provisions inserted by the Taxation Laws (Amendment) Act, 2005 with retrospective effect from 1.4.1998? Income-tax Appeal No.711 of 2010 -2- **** b). Whether on the facts and circumstances of the case, the ITAT was justified in allowing deductions u/s 80HHC in respect of entire DEPB amount by incorporating the same in the computation of business profit u/s 28(iiib)? c) Whether on the facts and circumstances of the case, the ITAT was right in categorizing the DEPB as cash assistance without appreciating that the legal fiction created by Section 28(iiib) cannot be extended to incorporate any other export benefit entirely different nature? d) Whether on the facts and circumstances of the case, the ITAT was justified in allowing deductions u/s 80HHC on bank interest and other interest by treating this income from profit and gains of business?” 2. Learned counsel for the revenue states that with regard to questions (a) to (c), the matter is covered in favour of the revenue by order of this Court dated 16.8.2010 in ITA No.299 of 2010 (Commissioner of Income-Tax Vs. M/s F.C.Sondhi & Company (P) Ltd.) while with regard to question (d) the matter is covered in favour of the revenue by the decision of this Court in Rani Paliwal Vs. Commissioner of Income-Tax (2004) 268 ITR 220. 3. In view of the above, following the earlier decisions of this Court, the matter is remanded to the Tribunal for fresh decision in Income-tax Appeal No.711 of 2010 -3- **** accordance with law. It is, however, made clear that if the respondent-assessee is aggrieved by this order, it can approach this Court. 4. Accordingly, the appeal is disposed of. (Adarsh Kumar Goel) Judge December 17,2010 (Ajay Kumar Mittal) Pka Judge