DEPB Not Excludable from Gross Profit for Business Income; ITAT Deletes Addition

Aamir Khatri Vs DCIT (ITAT Mumbai) The appeal concerned the tax treatment of DEPB licence income while estimating gross profit for Assessment Year 2012–13 and the validity of revisionary action under section 263 of the Income-tax Act, 1961. The assessee’s original assessment under section 143(3) involved estimation of gross profit at 1% of turnover after excluding DEPB sales, resulting in an addition of ₹18.87 lakh. Subsequently, the Principal Commissioner invoked section 263, holding that DEPB income was not part of turnover and that the Assessing Officer had incorrectly granted credit ...