VIKAS KALRA versus THE COMMISSIONER OF INCOME TAX-VIII, NEW DELHI

Citation: [2012] 3 S.C.R. 273 · Decided: 08-02-2012 · Supreme Court of India · Bench: S.H. KAPADIA · Disposal: Disposed off

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Judgment (excerpt)

[2012] 3 S.C.R. 273 
VIKAS KALRA 
v. 
THE COMMISSIONER OF INCOME TAX-VIII, NEW DELHI 
(Civil Appeal No. 1915 of 2012) 
FEBRUARY 08, 2012 
[S.H. KAPADIA, CJI, A.K. PATNAIK AND 
SWATANTER KUMAR, JJ.] 
A 
B 
Income Tax Act, 1961 - ss. 80 HHC and 28(iiid) -
Deductions in respect of profits retained for export business C 
- Claim for, by exporter-Assessing Officer held that the entire 
sale value of Duty Entitlement Pass Book (DEPB) represents 
profit on transfer of DEPB u!s 28(iiid) and did not allow 
exemption/deduction u/s 80 HHC -
Order upheld by 
Commissioner of Income Tax (Appeals) - Appellate Tribunal 
D 
relying on a decision of Special Bench of the Tribunal in Ml 
s Topman Exports holding that the face value of DEPB would 
be cash assistance against export and would fall u/s 28 (iiid) 
and sale value less the face value of DEPB would be profit 
on transfer of DEPB - High Court remitted the case to the 
E 
Appellate Tribunal since the decision of the Special Bench 
was reversed by the High Court in CIT v Kalpataru Colours 
and Chemicals :- As regards the additional issue whether the 
Tribunal was correct in law in ignoring explanation (baa) u/s 
80 HHC which specifically excludes profits of DEPB from total 
F 
turnover, the High Court held that the issue was covered by 
CIT v Shri Ram Honda Power Equip - On appeal held: 
Appeals disposed of in terms of the judgment passed by this 
Court in Mis Topman Exports v. Commissioner of Income 
Tax, Mumbai and other connected appeals setting aside the 
G 
judgment of the High Court in CIT v Kalpataru Colours and 
Chemicals; and Mis ACG Associated Capsules Private 
Limited v. Commissioner of Income Tax, Central-IV, Mumbai 
and other connected appeals affirming the judgment of the 
High Court in CIT v Shri Ram Honda Power Equip. 
H 
273 
274 
SUPREME COURT REPORTS 
[2012] 3 S.C.R. 
A 
Appellant-exporter filed returns of income claiming 
deductions in respect of profits retained for export 
business under Section 80HHC of the Income Tax Act, 
1961. The Assessing Officer held that the entire sale value 
of Duty Entitlement Pass Book (DEPB) represented the 
B prnfit on transfer of DEPB under Section 28(iiid) of the Act 
and did not allow the amount of deduction under Section 
80HHC. The Commissioner of Income Tax (Appeals) 
upheld the order. On appeal, the Tribunal following the 
order of the ~pecial Bench of the Tribunal in the M/s 
c Topman Exports's case allowed the deductions holding 
that the face value of the DEPB would be 'cash 
assistance' against export and would fall under Section 
28(iiib) of the Act and the sale value less the face value 
of the DEPB would be profit on transfer of DEPB. 
0 Aggrieved the Revenue filed appeals. The High Court 
he~d that the tribunal had simply followed the decision of 
the Special Bench of the Tribunal which was reversed by 
the High Court in Commissioner of the Income Tax v. 
Kalpataru Colours and Chemicals IT A(L) 2887 of 2009 and 
E remitted the case to the tribunal to decide the appeals on 
merits. As regards the issue whether the Tribunal was 
correct in law in ignoring Explanation (baa) under Section 
80HHC of the Act which specially excludes profits of 
DEPB from total turnover, the High Court held that the 
issue was covered by its judgment in the Commissioner 
F of Income-Tax v. Shri Ram Honda Power Equip (2007) 289 
ITR: 475 (Delhi). Therefore, the appellant filed the instant 
appeals. 
Disposing of the appeals, the Court 
G 
HELD: The instant appeals are disposed of in terms 
of the judgment in Civil Appeal arising out SLP (C) 
No.26558 of 2010 (M/s Topman Exports v. Commissioner of 
Income Tax, Mumbai) and other connected appeals setting 
aside the judgment of the High Court in Commissioner of 
H the Income Tax v. Kalpataru Colours and Chemical; and in 
VIKAS KALRA v. COMMISSIONER OF INCOME TAX- 275 
VIII, NEW DELHI 
terms of the judgment in Civil Appeal arising out of 5.L.P. 
A 
(C) No.32450 of 2010 (Mis ACG Associated Capsules 
Private Limited v. Commissioner of Income Tax, Central-IV, 
Mumbai) and other connected appeal affirming the 
judgment of the High Court in Commissioner of Income 
Tax v. Shri Ram Honda Power Equip's case. [Para 5] [277-
B 
D-F] 
Commissioner of the Income Tax v. Kalpataru Colours 
and Chemicals ITA (L) 2887 of 2009; Commissioner of 
Income-Tax v. Shri Ram Honda Power Equip (2007) 289 ITR 
475 (Delhi); Mis. Topman Exports v. Commissioner of Income 
C 
Tax, Mumbai [2012] 4 SCR 684; Mis ACG Associate

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