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Section 80HHC of the Income-tax Act, 1961 - Deductions - Exporters - Assessment year 2003-04 - Whether income from duty draw back, duty entitlement pass book and duty free remission scheme has to be treated as business income and has to be taken into account for deduction under section 80HHC - Held, yes [In favour of revenue] FACTS The assessee was an exporter. At the time of claiming deduction under section 80HHC, the assessee did not include the entire income from Duty Draw back (DBK), Duty Entitlement Pass Book (DEPB) and Duty Free Remission Scheme (DFRC) which was business income under sections 28(iiid) and 28(iiie). The Assessing Officer made calculation after treating the said amount as business income. On appeal, the said view was upheld but on further appeal, the Tribunal upheld the view taken by the assessee following the of the Special Bench of the Tribunal in case of Kalpataru Colours & Chemicals v. Addl. CIT [2009] 318 ITR (AT) 87 (Mum.). On revenue's appeal: HELD It was noted that the view taken by the Tribunal, Mumbai was reversed by the Bombay High Court in CIT v. Kalpataru Colours & Chemicals [2010] 192 Taxman 435/ 328 ITR 451. [Para 4] The view taken by the Bombay High Court is correct and thus, it is to be held that income from DBK, DEPB and DFRC has to be treated as business income and has to be taken into account for deduction under section 80HHC. The matter is thus remanded to the Tribunal for fresh decision in accordance with law. [Para 6] CASE REVIEW CIT v. Kalpataru Colours and Chemicals [2010] 328 ITR 451 (Bom.) followed & relied upon. CASES REFERRED TO Kalpataru Colours & Chemicals v. Addl. CIT [2009] 318 ITR (AT) 87 (Mum.)(SB) (para 2) and CIT v. Kalpataru Colours & Chemicals [2010] 192 Taxman 435/328 ITR 451 (Bom.) (para 4). Vivek Sethi for the Appellant. Pankaj Jain for the Respondent. JUDGMENT Adarsh Kumar Goel, J. - The Revenue has preferred this appeal under section 260A of the Income-tax Act, 1961 ('the Act') against the order dated September 23, 2009 of the Income-tax Appellate Tribunal, Amritsar Bench ('the ITAT') passed in I. T. A. No. 124(ASR)/2009 for the assessment year 2003-04, proposing to raise the…

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