JUDGMENT

A. K. Patnaik, J.

Delay condoned. Leave granted in Special Leave Petitions.

2. These are appeals by way of special leave under Article 136 of the Constitution against the judgment and orders of the Bombay High Court holding that the entire amount received by an assessee on sale of the Duty Entitlement Pass Book (for short ‘the DEPB’) represents profit on transfer of DEPB under Section 28(iiid) of the Income Tax Act, 1961 (for short ‘the Act’) for the purpose of the computation of deduction in respect of profits retained for export business under Section 80HHC of the Act.

3. For appreciating the controversy between the parties, we will state the facts of only the lead case of M/s Topman Exports (hereinafter referred to as ‘the assessee’). The assessee is a manufacturer and exporter of fabrics and garments. During the previous year relevant to the assessment year 2002-2003, the assessee sold the DEPB and DFRC (Duty Free Replenishment Certificate) which had accrued to the assessee on export of its products. The assessee filed a return for the assessment year 2002-2003 claiming a deduction of Rs.83,69,303/- under Section 80HHC of the Act. The Assessing Officer held that if the