Export Entitlements And Duty Drawback Of Promotion Scheme Is An Income Assessable Under ‘Profits Or Gains From Business Or Profession’: ITAT
[07 June 2022] The Visakhapatnam Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the export entitlements and the duty drawback of the promotion scheme are an income assessable under the head “profits or gains from business or profession” as per clauses (iiib) and (iiid) of section 28 of the Income Tax Act, 1961.
The two-member bench of Duvvuru Rl Reddy (Judicial Member) and S. Balakrishnan (Accountant Member) concluded that the authorities below failed to appreciate the legislative intent underlying the addition of a clause-(iiid) to Section 28 of the Income Tax Act having retroactive effect. “Any profit on the transfer of the Duty Entitlement Pass Book Scheme, being the Duty Remission Scheme under the export and import policy formulated and announced under section 5 of the Foreign Trade (Development and Regulation) Act, 1992, shall be treated as part of the business profits of the exporter and assessed as “profits and gains of business or profession” and not under the head income from other sources,” the ITAT said.