ASIAN EXIM INTERNATIONAL vs. C I T

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ITA/820/2008HC Punjab & HaryanaPHHC01080851200822 February 2017Author: MR. JUSTICE SURINDER GUPTA,MRS JUSTICE DAYA CHAUDHARY3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that similar issues arising in the assessee's case for assessment year 2004-05 were decided by the same Court in ITA No. 470 of 2010 (Asian Exim International Vs. Commissioner of Income Tax, Jalandhar) on 18.04.2011, against the assessee. While a Special Leave Petition was pending before the Apex Court against that order, and an identical issue in another case (Micro Labs Limited) was referred to a larger Bench, the Court found itself bound by its own prior decision. Consequently, the substantial questions of law were answered in line with the Court's previous ruling in the assessee's own case for a different assessment year. The appeal was dismissed based on this precedent. No specific findings were made on each individual issue raised, as the appeal was disposed of on the basis of the prior judgment.

What were the facts?

The assessee, Asian Exim International, Jalandhar, filed an appeal under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal (ITAT), Amritsar Bench, for the assessment year 2002-2003. The appeal challenges the validity of reassessment proceedings initiated under Section 147 and the disallowance of deductions under Section 80IB. It also questions the Tribunal's restriction of deduction claims under Section 80HHC read with Sections 80IA(9) and 80IB(13). The core dispute revolves around whether reassessment proceedings were validly initiated and whether certain income, specifically Duty Drawback and DEPB receipts, are eligible for deduction under Section 80IB. The procedural history involves the ITAT's order dated 07.11.2007, which is under challenge.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the initiation of reassessment proceedings under Section 147 is valid. 2. If reassessment proceedings are valid, whether the Assessing Officer could disallow deduction under Section 80IB concerning issues not initially forming the basis of reassessment. 3. Whether the conclusions in reassessment proceedings are valid when they go beyond the reasons that led to the initiation of such proceedings, as per Section 147. 4. Whether the phrase 'Reasons to believe' in Section 147 is discernible from 'belief for reasons'. 5. Whether the Tribunal erred in restricting the assessee's claim for deduction under Section 80HHC read with Sections 80IA(9) and 80IB(13). 6. Whether Duty Drawback received is an amount derived and eligible for claim under Section 80IB. 7. Whether Duty Entitlement Pass Book (DEPB) Scheme receipts are derived and eligible for claim under Section 80IB. 8. Whether the word 'derived' can be interpreted differently from the interpretation in CIT Vs. Sterling Foods, 237 (1999) ITR 579 (SC), considering other judgments. 9. Whether Duty Drawback received by the appellant is derived from an Industrial Undertaking in its true sense and spirit. Assessee's Contentions: The assessee argued that reassessment proceedings were unsustainable. They also contended that the Tribunal erred in restricting deduction claims under Section 80HHC and that Duty Drawback and DEPB receipts are derived from an industrial undertaking and eligible for deduction under Section 80IB. Revenue's Contentions: No specific contentions for the revenue were recorded in the provided text, other than their representation by counsel.

Which sections of the Income-tax Act were involved?

Section 260A,Section 147,Section 80IB,Section 80HHC,Section 80IA

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 22.02.2017 Asian Exim International, Jalandhar

... Appellant versus Commissioner of Income Tax, Jalandhar .... Respondent CORAM:HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON'BLE MR. JUSTICE RAMENDRA JAIN ---- Present: Mr. Pankaj Jain, Senior Advocate, with Mr. Divya Suri, Advocate and Mr. Sachin Bhardwaj, Advocate for the appellant. Mr. Zora Singh Klar, Advocate for the respondent. AJAY KUMAR MITTAL. J (ORAL) The assessee has preferred this appeal under Section 260A of the Income Tax Act, 1961 against the order of Income Tax Appellate Tribunal, Amritsar Bench, Amritsar in ITA No. 318 (ASR) 2007 dated 07.11.2007 for the assessment year 2002-2003 raising following substantial questions of law: A. Reassessment to 147 are unsustainable. I Whether on the true and correct interpretation of Section 147, the initiation of the reassessment proceedings are valid ? II Even if the proceedings under Section 147 are held to be validly initiated whether the Assessing Officer could disallow deduction under Section 80IB in respect of which neither any proceedings had been initiated nor any material had come to his notice subsequently during the course of assessment proceedings ? III Whether in the true and correct interpretation the VERMA KUMUD 2017.03.06 12:43 I attest to the accuracy and authencity of this document Chandigarh provisions of Section 147 the conclusions are valid on going beyond the reasons which are part of his knowledge before the initiation of the reassessment proceedings ? IV Whether on the true and correct interpretation of the provisions of Section 147 the words “Reasons to believe” are discernable from “belief for reasons”? B. The deduction under Section 80HHC read with the provisions of Section 801A (9) 801B (13). I Whether on the true and correct interpretation of the provisions of Section 80HHC r.w Section 801A (9) Section 801B (13) the Tribunal has erred in restricting the claim of deduction to the assessee? C. The deduction under Section 80IB has to be on the content of the Duty Draw Back and DEPB. I. Whether the Duty Draw back received is an amount derived and eligible for claim under Section 80IB ? II. Whether the Duty Entitlement Pass Book Scheme received is an amount derived and eligible for claim under Section 80IB ? (1SCC) 567 ? V. Whether the Duty Draw back received by the appellant is derived from an Industrial Undertaking per the genesis of the word derived in its true sense and spirits ?

2.

Learned counsel for the parties are ad idem that the similar issue arising in the case of the assessee for the assessment year 2004-05 has since been answered by this Court in Income Tax Appeal No. 470 VERMA KUMUD 2017.03.06 12:43 However, it was stated by the learned counsel for the appellant-assessee Whether speaking/non-speaking: Yes/No Whether reportable : Yes/No VERMA KUMUD 2017.03.06 12:43 I attest to the accuracy and authencity of this document Chandigarh

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