DEPB AND DUTY DRAWBACK SCHEME ARE NOT THE BUSINESS INCOME
63DEPB & DDC ARE NOT BUSINESS INCOME
The profits from duty entitlement scheme & from duty drawback scheme can't be adjusted to the cost of purchase or manufacturing of the goods.They both should be treated as the seprate items for revenue in profit and loss account.
THE SUPREME COURT vide its order dated 31of august 2009 has ruled that Deduction u/s 80-IB – in respect of profit from Duty Entitlement Passbook Scheme (DEPB) and Duty Drawback. should not be treated as adjustment (credited) to cost of purchase or manufacture of goods, in the hearing of M/S LIBERTY INDIA V/S Commissioner of income tax.
ANALYSIS BY THE SUPREME COURT
The supreme court analysis that the inventories are the assets of the company also said the closing stock. They are valued at the cost and not the price on which it can be realized and it also inculdes all the taxes,fright and excise in the inventories. So trade discounts and all the rebates are already deducted in the valuation of the stock. So the duty drawback should be treated as the seprate item of revenue in the profit and loss account and not to be adjusted in cost of purchase or manufacturing of the goods.
The SUPREME COURT also issued a notification that of reopening all the cases where the tax provisions are confused. Also to open all the cases of the companies where the taxes figure much differ to the next year.All these are made to boost the revenue of the Direct tax department.
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rajendra jain 4 months ago
no,both can not be claimed together.