For purposes of s. 80HHC, the direct cost attributable to the earning of the DEPB license (equal to the value of the license on the date of receipt) has to be reduced from the direct cost of trading goods on the basis that the license is a reimbursement of the costs. The difference between the realisation proceeds of the DEPB license and its cost (i.e. the profit) will fall within s. 28(iiid) and 90% of that will have to be reduced from the profits of the business.

Note the principle laid down in Hero Exports (SC) was followed.