Delhi High Court: Duty Drawback Not Eligible for Section 80-IC Deduction

The Delhi High Court held that duty drawback receipts are not eligible for deduction under Section 80-IC of the Income Tax Act as they are not profits derived from an industrial undertaking.

The Court relied on Supreme Court precedents and rejected Narayan Industries’ claim on this issue.

However, it directed that excise and customs duties paid on raw materials must be set off from the duty drawback while recomputing income.

Observing that inconsistent treatment across assessment years is impermissible, the Court remanded the matter to the Assessing Officer for fresh computation in accordance with law.

[Narayan Industries v. ACIT Circle 60(1) New Delhi]