M/S LIBERTY INDIA vs COMMR.OF INCOME TAX,KARNAL

The Supreme Court analyzed whether profits from the Duty Entitlement Passbook Scheme (DEPB) and Duty Drawback Scheme qualify as profits derived from an industrial undertaking eligible for deduction under Section 80-IB of the Income-tax Act, 1961. The Court held that while duty drawback is linked to production costs and qualifies for deduction, DEPB does not constitute a substitute for duty drawback and thus does not qualify. The Court upheld the High Court's ruling that the assessee was not entitled to the deduction under Section 80-IB(3).