We find it convenient to dispose of these two appeals of Revenue pertaining to different assessees involving some common issues by this consolidated order. We have heard parties and perused record. relevant facts, briefly stated, are that both respondents are engaged in business of manufacturing, trading and export of cycle and auto parts. AO had made assessment under s. 143(3) in both cases and restricted claim of respondents under s. 80HHC. CIT(A) has allowed relief to respondents. Revenue being aggrieved is in appeal before Tribunal. We will first take up common grounds of appeal. In Appeal No. 637/Chd/2005, ground Nos. 2 and 6 are as under: "1. That learned CIT(A)-I has erred in law and facts in directing not to reduce 90 per cent of exchange fluctuation pertaining to earlier years from profit and gains of business and profession, by ignoring fact that same fell under category of any other receipts or charges and was required to be reduced in accordance with Expln. (baa) below s. 80HHC(4B) of IT Act. That learned CIT(A) has erred in law and facts in allowing deduction under s. 80HHC even if there is no profit under cl. (a), (b) or (c) of sub-s. 3 of s. 80HHC, on export of trading and manufacturing activities." In Appeal No. 638/Chd/2005, ground Nos. 2 and 5 read as under: "2. That learned CIT(A) has erred in law and facts in directing not to reduce 90 per cent of sale of DEPB from profit and gains of business and profession, by ignoring that same is not export incentive covered under cl. (iiib) of s. 28 of IT Act but falls under category of any other receipt or charges . That learned CIT(A) has erred in law and facts in allowing deduction under s. 80HHC even if there is no profit under cl. (a), (b) or (c) of sub-s. 3 of s. 80HHC, on export of trading and manufacturing activities." As is evident from grounds of appeal reproduced above, dispute raised by Revenue is relating to calculation of deduction under s. 80HHC with reference to DEPB. It is agreed by parties before us that in view of amendment in s. 80HHC with retrospective effect, issue has got to be decided afresh keeping in view said amendment in s. 80HHC. We have restored similar issue to AO in group of cases, namely, Asstt. CIT vs. Shri Parveen Sood, Ludhiana in ITA No. 215/Chd/2005, etc. vide order dt. 21st March, 2006 to file of AO for fresh decision in accordance with law. relevant para No. 8 of said order relating to issue is reproduced here under for disposal of aforementioned grounds of appeal: "8. In view of retrospective amendment referred to above, we consider i t appropriate to remit issue relating to deduction under s. 80HHC with reference to premium on sale of quota and DEPB also to file of AO to be decided afresh in accordance with law. For sake of ready reference, we would also like to refer to office memorandum bearing F. No. 133/132/97- T P L dt. 23rd Feb., 1998 issued by Ministry of Finance, Department of Revenue, CBDT on issue whether premium received for transfer of export quota would be treated as part of export profit eligible for deduction under s. 80HHC of IT Act or not. said OM reads as under: undersigned is directed to refer to PMO s D.O. No. 247/JS(5)/98 dt. 2nd Feb., 1998 on subject cited above. In representation enclosed therein clarification has been sought by AEPC as to whether premium received for transfer of export quotas would be treated as part of export profit eligible for deduction under s. 80HHC of IT Act or not. Deduction under s. 80HHC is allowed on export profits with view of encourage earnings in convertible foreign exchange. Since premium payment on export quotas under electronic transfer system does not involve any earnings in foreign exchange, this amount does not qualify for deduction under s. 80HHC. Technically export premium can be equated with items mentioned in s. 28(iiia) (profit on sale of import licences), s. 28(iiib) (cash assistance) and s. 28(iiic) (duty drawback). Therefore, present item viz. premium on sale of export quotas statutorily receive same treatment as profit on sale of import licences, cash assistance and duty drawback. AO shall also take into consideration view of Ministry quoted above in deciding issue afresh." In Appeal No. 637/Chd/2005, ground No. 1 reads as under: "1. That learned CIT(A)-I has erred in law and facts in directing not to reduce 90 per cent of exchange fluctuation pertaining to earlier years from profit and gains of business and profession, by ignoring fact that same fell under category of any other receipts or charges and was required to be reduced in accordance with Expln. (baa) below s. 80HHC(4B) of IT Act." In Appeal No. 638/Chd/2005 ground No. 1 reads as under: "1. That learned CIT(A)-I has erred in law and facts in directing not to reduce 90 per cent of exchange fluctuation pertaining to earlier years from profit and gains of business and profession, by ignoring fact that same fell under category of any other receipts or charges and was required to be reduced in accordance with Expln. (baa) below s. 80HHC(4B) of IT Act." relevant facts relating to above ground of appeal are that assessee had received sale proceeds in foreign exchange and as result of foreign exchange fluctuation, assessee had received more money in Indian currency on account of sales than reflected in books of account as result of foreign exchange rate fluctuation. Whereas AO has considered benefit of exchange fluctuation pertaining to year under appeal as part of turnover, portion relating to exchange fluctuation pertaining to preceding year has been treated as other receipts within meaning of Expln. (baa) to s. 80HHC. learned Departmental Representative contended that CIT(A) has not given any decision in regard to issue raised by AO. It was accordingly pleaded that issue may be restored to file of CIT(A) or view expressed by AO upheld. learned counsel for assessee, on other hand, contended that view expressed by AO is contrary to decision of Tribunal in case of Smt. Sujata Grower vs. Dy. CIT (2002) 74 TTJ (Del) 347. In our considered view, issue requires reconsideration. While deciding issue afresh, AO shall keep in mind decision of Delhi Bench of Tribunal in case of Smt. Sujata Grower vs. Dy. CIT (supra) and any other decision that may be relevant to above issue. assessee shall be given reasonable opportunity of being heard while deciding issue afresh in accordance with law. In Appeal No. 637 ground No. 3 reads as under: "3. That learned CIT(A) has erred in law and facts in directing not to reduce premium on sale of DEPB which is sold after close of Finance Act, (sic-financial year) by ignoring that same cannot be treated to have accrued during previous year." In Appeal No. 638/Chd/2005 ground No. 3 reads as under: "3. That learned CIT(A) has erred in law and facts in directing not to reduce premium on sale of DEPB which is sold after close of Finance Act (sic-financial year) by ignoring that same cannot be treated to have accrued during previous year." relevant facts relating to this common issue are that assessee had received DEPB relating to exports of current year. In subsequent year, DEPB licences have been sold by assessee. However, in year under appeal, assessee has reflected sale proceeds of DEPB as income and claimed deduction under s. 80HHC in respect of same. AO has pointed out that DEPB licences have been sold in subsequent year and, therefore, same have wrongly been reflected by assessee in year under appeal in order to claim deduction under s. 80HHC. under appeal in order to claim deduction under s. 80HHC. learned counsel for assessee invited our attention to Accounting Standard (AS)-12 to support contention that assessee is entitled to reflect appropriate amount in respect of such earned benefits, estimated on prudent basis. It was contended that assessee on basis of actual sale made in subsequent year had shown sale proceeds on accrual basis in year under appeal and, therefore, CIT(A) was justified in directing deduction under s. 80HHC with reference to such receipts also. It was further contended that in any case issue as to whether assessee is entitled to deduction with reference to DEPB has got to go back to AO for consideration in light of retrospective amendment in s. 80HHC. In respect of second issue, it was contended that decision of CIT(A) may be upheld. learned Departmental Representative, on other hand, contended that DEPB is incentive granted by Government with reference to exports. assessee has sold licences in subsequent assessment year. sale of DEPB licences is different activity of assessee than exports. According to learned Departmental Representative Accounting Standard AS- 12 is not applicable in respect of sale proceeds of DEPB licences. We have given our careful consideration to rival contentions. In our considered view, view expressed by AO that sale of DEPB licences having taken place in subsequent year, assessee was not justified in reflecting sale proceeds in year under appeal and claiming deduction under s. 80HHC in respect of same is correct. We, however, agree with alternative contention advanced on behalf of assessee that said amount has got to be excluded from sale proceeds also and to be excluded from profits and gains of business reflected by assessee. Accounting Standard AS-12, in our view, is not applicable in respect of sale of DEPB licences in subsequent year. assessee had received licences in year under appeal but same had been sold in subsequent year and accordingly income relating to such transaction is assessable in subsequent assessment year. AO is accordingly directed to rework deduction under s. 80HHC after excluding sale proceeds of DEPB licences f r o m turnover as well as from profits of business. We direct accordingly. In Appeal No. 637/Chd/2005 ground No. 4 reads as under: "4. That learned CIT(A) has erred in law and facts in directing to exclude scrap sales from total turnover of business for purpose of calculating deduction under s. 80HHC by ignoring facts that scrap sales is part of total turnover." In Appeal No. 638/Chd/2005, ground No. 4 reads as under: "4. That learned CIT(A) has erred in law and facts in directing to exclude scrap sales from total turnover of business for purpose of calculating deduction under s. 80HHC by ignoring facts that scrap sales is part of total turnover." learned Departmental Representative relied upon orders of Tribunal Chandigarh Bench in case of Asstt. CIT vs. Nahar Spinning Mill Ltd. in ITA No. 750/Chd/2002, ITA Nos. 523 & 394/Chd/2003 and also in case of Highway Cycles in ITA Nos. 468 & 644/Chd/1996 to support plea that whereas sale of scrap may be excluded from turnover, same may also be excluded from profits of business. learned counsel for assessee fairly conceded that he has no objection for excluding scrap sales from turnover as well as from profits of business for purpose of deduction under s. 80HHC. We direct AO to recalculate deduction under s. 80HHC accordingly. There is no other ground of appeal in appeal No. 638/Chd/2005. In Appeal N o . 637/Chd/2005, only other ground surviving for our consideration is ground No. 5 which reads as under: "That learned CIT(A) has erred in law and facts in allowing deduction under s. 80HHC even if there is no profit under cl. (a), (b) or (c) of sub-s. (3) of s. 80HHC, on export of trading and manufacturing activities." AO has denied deduction under s. 80HHC to assessee with reference to turnover of Rs. 61,65,919 on ground that no evidence was furnished to establish that time for collection of sale proceeds in foreign exchange was extended by RBI. CIT(A) on examination of evidence on record has allowed deduction to assessee, on recording finding that time for collection of sale proceeds had been extended by competent authority being concerned collecting banks. learned Departmental Representative contended that neither before AO nor before CIT(A) permission from RBI which is competent authority granting extension of time for recovery or foreign exchange was filed by assessee. CIT(A), therefore, was not justified in allowing relief to assessee. learned counsel for assessee, on other hand, has invited our attention to paper book and pointed out that certain evidence was produced before AO to establish that time for recovery of sale proceeds in convertible foreign exchange was granted by competent authority. It was pointed out by learned counsel that RBI was competent authority upto 30th May, 1999. However, w.e.f. 1st June, 1999, RBI has authorized various banks to grant extension to exporters. assessee has furnished evidence before AO as mentioned at p. 16 of assessment order from concerned banks. According to learned counsel, extension has been granted by competent authority, namely, concerned banks, and accordingly AO was not justified in excluding turnover of Rs. 61,65,919 for purpose of calculation of deduction under s. 80HHC. learned counsel for assessee, however, contended that AO not having applied his mind may be given chance to verify claim of assessee. learned Departmental Representative has no objection. Considering rival contentions, we are of view that issue requires verification at stage of AO. certificates from concerned banks have already been filed by assessee before AO as well as before CIT(A). AO may satisfy himself about claim that foreign exchange was received by assessee within extended time granted by competent banking authorities and decide claim under s. 80HHC accordingly. We direct accordingly. In result, appeals of Revenue are partly allowed. *** ASSISTANT COMMISSIONER OF INCOME TAX v. PARKER CYCLE INDUSTRIES