ACG ASSOCIATED CAPSULES P.LTD. vs C.I.T CENTRAL-IV MUMBAI

The Supreme Court held that the entire amount received by an assessee on the sale of the Duty Entitlement Pass Book (DEPB) does not represent profit under Section 28(iiid) of the Income Tax Act, 1961; instead, the profit is the sale value less the face value of the DEPB. Additionally, regarding the deduction under Section 80HHC, the Court affirmed that ninety percent of gross interest and gross rent should be excluded from business profits, aligning with the precedent set in Commissioner of Income-Tax v. Asian Star Co. Ltd. The appeal was allowed in favor of the assessee on both issues.