C I T vs. M/S FLORA EXPORTS

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ITA/801/2008HC Punjab & HaryanaPHHC01080830200831 May 2016Author: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE JITENDRA CHAUHAN2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court answered the substantial question of law in favour of the Revenue and against the assessee. The Court's decision was based on the reasoning provided in the Supreme Court's judgment in Liberty India v. Commissioner of Income-Tax, (2009) 317 ITR 218 (SC). The ratio decidendi is that DEPB benefits, being incentives or subsidies, are not considered profits derived from the eligible business for the purpose of deduction under Section 80IB. Consequently, the ITAT's direction to grant the deduction on the value of DEPB was reversed. The appeal was disposed of, implying the Revenue's appeal was allowed.

What were the facts?

The Revenue (Commissioner of Income-tax, Karnal) filed an appeal before the High Court of Punjab and Haryana at Chandigarh against an order dated January 31, 2008, passed by the Income-tax Appellate Tribunal (ITAT), Delhi Bench 'E'. The appeal pertains to assessment year 2001-02 and concerns the assessee, M/s Flora Exports. The ITAT had reversed the order of the Commissioner of Income-tax (Appeals) and directed the Assessing Officer to grant the benefit of deduction under Section 80IB of the Income-tax Act, 1961, on the value of DEPB (Duty Exim Scrip) as claimed by the assessee. The amount in dispute is not explicitly stated.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the learned ITAT was right in law in reversing the order of the CIT(A) and directing the Assessing Officer to grant the benefit of deduction under Section 80IB of the Income-tax Act, 1961, on the value of DEPB, as claimed by the assessee? Assessee's contentions: The assessee claimed the benefit of deduction under Section 80IB on the value of DEPB. Revenue's contentions: The Revenue argued that the issue is squarely covered by the judgment of the Hon'ble Supreme Court in Liberty India v. Commissioner of Income-Tax, (2009) 317 ITR 218 (SC). The assessee's counsel could not dispute this statement.

Which sections of the Income-tax Act were involved?

Section 80IB

AI-generated summary — verify with the full judgment below

ITA No. 801 of 2008 [1]

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income Tax Appeal No. 801 of 2008 (O&M) Date of decision: 31.5.2016 The Commissioner of Income-tax, Karnal .. Appellant v. M/s Flora Exports .. Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Yogesh Putney, Advocate for the appellant. Mr. Alok Mittal, Advocate for the respondent. ... Rajesh Bindal J. The present appeal has been filed by the revenue against the order dated 31.1.2008, passed by the Income-tax Appellate Tribunal, Delhi Bench 'E', New Delhi in ITA No. 4522/Del/04 for the aassessment year 2001-02, raising the following substantial question of law: “Whether on the facts and in the circumstances of case, the ld. ITAT was right in law in reversing the order of the CIT(A) and directing the Assessing Officer to grant the benefit of deduction u/s 80IB of the Income-tax Act, 1961, on the value of DEPB, as claimed by the assessee?” Learned counsel for the revenue submitted that the issue raised in the present appeal is squarely covered by the judgment of Hon'ble the Supreme Court in Liberty India v. Commissioner of Income-Tax, (2009) 317 ITR 218 (SC). Learned counsel for the assessee could not dispute the aforesaid statement made by learned counsel for the revenue. MANOJ KUMAR 2016.06.06 10:06 I attest to the accuracy and authenticity of this document

ITA No. 801 of 2008 [2]

For the reasons stated in Liberty India's case (supra), the substantial question, as referred to above, is answered in favour of the revenue and against the assessee.

The appeal stands disposed of. (Rajesh Bindal) Judge (Harinder Singh Sidhu) Judge 31.5.2016 mk MANOJ KUMAR 2016.06.06 10:06 I attest to the accuracy and authenticity of this document

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