Mr. Sham v. Nd July, 2019

21 itxa 1120 of 2017.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1120 OF 2017 M/s. Opera Clothing (now known as …Opera Clothing P. Ltd. Appellant versus…Assistant Commissioner of Income Tax-18(1)(3)Respondent Mr. Bharat L. Gandhi with Ms. Poonam Kotkar I/by Mr. Swapnil Newaskar, forAppellant. Mr. Sham V. Walve, for Respondent. CORAM: AKIL KURESHI & S.J. KATHAWALLA, JJ. nd JULY, 2019 DATE: 22 P.C.: 1.This Appeal is filed by the Assessee to challenge the judgment of the Income Tax Appellate Tribunal (“the Tribunal” for short). The following question is presented for our consideration : “Whether the duty drawback of Appellant which is included in thepurchase of the appellant which forms the part of expenses of theeligible unit relying upon the subsequent event judgments reportedin Citation 383 ITR 217 SC CIT V/s. Meghalaya distinguish libertyIndia reported in 317 ITR 218, which is nothing but deemed to havebeen paid” ? 2. The case of the assessee seeking exemption of the income arising out of its SSP 1/2 21 itxa 1120 of 2017.doc export business, is squarely covered by the Judgment of the Supreme Court in the caseof Liberty India reported in 317 ITR 200 since the receipts in question arise out of theduty draw back payment of the Government of India. In Liberty India, as is wellknown, the Supreme Court had held that the DEPB benefits (similar to the duty drawback payments) would not qualify for exemption from tax since the same are notdirectly connected to the assessee's export business. 3.Learned Counsel for the assessee however, placed reliance on thesubsequent decision of the Supreme Court in the case of Commissioner of Income TaxV/s. Meghalaya Steels Ltd.1 We are conscious that in such decision, the Supreme Courthad granted the benefit of exemption in respect of a subsidy received from theGovernment. In the process, the Supreme Court had held that the ratio laid down bythe Supreme Court in the case of Liberty India (supra) would not apply in such a case.However, we cannot apply the decision of the Supreme Court in the case ofMeghalaya Steels Ltd. (Supra) since the case of the present assessee is squarelycovered by the decision in the case of Liberty India (Supra). No question of law arises.The Income Tax Appeal is dismissed. ( S.J.KATHAWALLA, J. ) ( AKIL KURESHI, J. ) 1[2016] 383 ITR 217 (SC) SSP 2/2