COMMISSIONER OF INCOME TAX-II, LUDHIANA vs. M/S AVON CYCLES LTD

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ITA/229/2011HC Punjab & HaryanaPHHC01095553201111 May 2016Author: MR. JUSTICE ASHUTOSH MOHUNTA,MR. JUSTICE RAMENDRA JAIN2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as not pressed, with liberty granted to the revenue to file an application for revival of the appeal as prayed for. The Court clarified that the withdrawal of the appeal by the revenue shall not be taken as an affirmation of the Tribunal's order on merits. The legal issue, as claimed by the revenue, was left open to be adjudicated in an appropriate case. Therefore, the Tribunal's decision on the merits of the substantial question of law was not affirmed or decided by the High Court.

What were the facts?

The assessee is M/s Avon Cycles Ltd., Ludhiana, and the revenue is the Commissioner of Income Tax-II, Ludhiana. The assessment year in question is 1998-99. The appeal is filed by the revenue under Section 260A of the Income Tax Act, 1961, against an order dated 16.07.2010 passed by the Income Tax Appellate Tribunal, Chandigarh Benches. The Tribunal's order was in ITA No. 768/Chd/2001. The appeal was filed raising a substantial question of law concerning the inclusion of unrealized foreign proceeds in total turnover for the purposes of Section 80HHC of the Act.

What were the issues?

1. Whether on the facts and in law, the Hon'ble ITAT was legally justified in directing the Assessing Officer to decide the issue in line with the ratio laid down by the Hon'ble Kerala High Court in CIT Vs. Adab Fisheries (258 ITR 651 (Kerala)) wherein it was held that since the amount of unrealized foreign proceeds could not be included in the profit, the same also could not be included in the total turnover for the purposes of Section 80HHC of the Act? Contentions: Assessee: The judgment does not record any specific contentions made by the assessee. Revenue: The learned counsel for the appellant-revenue submitted that in view of Circular No. 21/2015 dated 10.12.2015 read with Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by the Central Board of Direct Taxes, the revenue does not wish to press the present appeal as the tax effect involved is less than ` 20 lacs. The revenue prayed for liberty to file an application for revival of the appeal in case something survives therein.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80HHC

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 11.05.2016 The Commissioner of Income Tax-II, Ludhiana .......Appellant Versus M/s Avon Cycles Ltd., Ludhiana ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Zora Singh Klar, Advocate for the appellant. Mr. Alok Mittal, Advocate for the respondent. RAJESH BINDAL,J. This appeal has been filed under Section 260 A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 16.07.2010 passed by the Income Tax Appellate Tribunal, Chandigarh Benches (A) Chandigarh, in ITA No. 768/Chd/2001, for the assessment year 1998-99, raising the following substantial question of law: Whether on the facts and in law, the Hon'ble ITAT was legally justified in directing the Assessing Officer to decide the issue in line with the ratio laid down by the Hon'ble Kerala High in CIT Vs. Adab Fisheries (258 ITR 651 (Kerala) wherein Hon'ble Kerala High Court has held that since the amount of unrealized foreign proceeds could not be included in the profit, the same also could not be included in the total turnover for the purposes of Section 80HHC of the Act? REEMA SAINI 2016.05.18 12:43 I attest to the accuracy and authenticity of this document High Court, Chandigarh -2- Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, he does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, he prays that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the appeal by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 11.05.2016 JUDGE reema REEMA SAINI 2016.05.18 12:43 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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