IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI BENCH ‘DEHRADUN/’ NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER I.T.A. No. 46/DDN/2022 (A.Y 2008-09)

The Deputy Commissioner Vs M/s Sharda Exports of Income Tax, Plot No. 11, SIDUCUL, Central Circle, Integrated Industrial Estate, Dehraudn Ranipur,Haridwar,Uttarakhand PAN: AAYFS1694N Appellant Respondent IAssessee by Sh. Rajkumar, CA & Sh. J. P. Sharma, CA Revenue by Sh. S. K. Chatterjee, CIT, DR Date of Hearing 12/09/2025 Date of Pronouncement 26/09/2025 ORDER PER YOGESH KUMAR, U.S. JM:

The present appeal is filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals), Kanpur-4 [‘Ld. CIT(A)’

for short] dated 27/04/2022 for Assessment Years 2008-09.

2. Brief facts of the case are that, the Assessee furnished return of income for Assessment Year 2008-09 declaring NIL income. The return filed by the Assessee was processed u/s 143(1) of the Income Tax Act, 1961 ('Act' for short). Subsequently, a notice u/s 143(2) of the Act was issued and assessment was completed u/s 143(3) of the Act on 24/12/2010by computing the total income of the Assessee at Rs. 13,98,31,925/-by making addition of Rs. 13,98,31,925/- on account of Duty Draw Back occurred during the year. Subsequently, a notice u/s 148 of the Act was issued to the Assessee on 08/06/2012for the year under consideration. An assessment order came to be passed on 29/09/2021 under Section 147/143(3) of the Act by making disallowance of Rs. 13,98,31,925/- on the ground that Duty Draw Back occurred during the year cannot be allowed as deduction u/s 80IC of the Act, further disallowed Rs. 51,27,57,399/- under Section 80IC of the Act on the ground that the Assessee failed to substantiate that the manufacturing was actually being done at Haridwar unit of the Assessee.

3. It is pertinent to note that, the Assessee approached Hon'ble High Court on the issue of disallowance made on the Duty Draw Back and during the pendency of the proceedings before the High Court, Assessee applied for Vivad se Vishwas Scheme, 2020 and paid the requisite tax as per the said scheme in so far as the said addition of Rs. 13,98,31,925/-.

4. Further, aggrieved by the assessment order dated 29/09/2021, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 27/04/2022, observed that in so far as disallowance of Rs. 13,98,31,925/- made on the account of duty draw back has been settled in VSV-2020 Scheme and the Assessee paid requisite tax liability.In so far as remaining disallowance of Rs. 37,29,15,474/- in respect of export profits, by relying on the order of the Tribunal dated

14/06/2023 for Assessment Year 2009-10 in Assessee’s own case in ITA No. 3597/Del/2012, decided the issue in favour of the Assessee by deleting the disallowance vide order dated 27/04/2022. Aggrieved by the order of the Ld. CIT(A) dated 27/04/2022, the Revenue preferred the present Appeal.

5. The Ld. Department's Representative submitted that the Ld. CIT(A) erred in deleting the disallowance of Rs. 51,27,47,399/- made on account of deduction claimed u/s 80IC of the Act by the Assessee, thus by relying on the assessment order, sought for allowing the Appeal of the Revenue.

6. Per contra, t he Ld. Assessee's Representative submitted that out of total disallowance of Rs. 51,27,47,399/-, the disallowance made on account of duty drawback of Rs. 13,98,31,921/-has been already settled by the Assessee in VSVS-2020 and the Assessee has paid tax liability as per the said Scheme. Further in so far as remaining addition of Rs. 37,29,15,474/-which being other than Duty Draw Back, submitted that the A.O. while making the addition relied on the findings of assessment order for Assessment Year 2009-10 and denied the benefit, however, Tribunal in ITA No. 3597/Del/2012 for Assessment Year 2009-10, vide order dated 14/06/2023held that the Assessee was manufacturing at Haridwar Unit and accordingly 80IC of the A