COMMISSIONER OF INCOME TAX-III, LUDHIANA vs. M/S BICYCLE WHEELS (INDIA)

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ITA/98/2002HC Punjab & HaryanaPHHC01029966200225 April 2016Author: MR. JUSTICE SATPAL,THE TAXING OFFICER2 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. The Court clarified that the withdrawal of the appeal by the revenue would not be taken as an affirmation of the ITAT's order on merits. The legal issue, as claimed by the revenue, was left open to be adjudicated in an appropriate case. Therefore, no specific finding was given on the substantial questions of law raised by the revenue, nor was any reasoning provided for deciding those questions. The operative direction was the dismissal of the appeal with liberty to revive.

What were the facts?

The appeal was filed by the Commissioner of Income Tax-III, Ludhiana (appellant-revenue) against an order dated 01.11.2001 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench (A). The ITAT's order pertained to ITA No. 1193/Chandi/94 for the assessment years 1993-94. The dispute involved the calculation of deduction under Section 80HHC of the Income Tax Act, 1961, specifically concerning the inclusion of sale of scrap in the total turnover. The High Court of Punjab and Haryana at Chandigarh was hearing the appeal under Section 260A of the Act.

What were the issues?

The High Court was to decide the following substantial questions of law: 1. Whether the ITAT was correct in holding that the sale of scrap in India is not part of the respondent firm's total turnover for the purpose of calculating deduction under Section 80HHC? 2. Whether the ITAT was justified in ignoring the sale of scrap in computing the total turnover, when such generation was a by-product of the manufacturing process? 3. Whether a by-product in a manufacturing process is not eligible for consideration in the computation of total turnover for calculating 80HHC deduction? The appellant-revenue, through its counsel, submitted that in view of CBDT Circular No. 21/2015 dated 10.12.2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, it did not wish to press the present appeal as the tax effect involved was less than ₹20 lacs. The revenue prayed for liberty to file an application for revival of the appeal if something survived therein. The respondent-assessee's contentions are not recorded in the judgment.

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: 25.04.2016 Commissioner of Income Tax-III, Ludhiana .......Appellant Versus M/s Bicycle Wheels (India) ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Rajesh Katoch, 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 1.11.2001 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (A), in ITA No. 1193/Chandi/94, for the assessment years 1993-94, raising the following substantial questions of law: (i) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in holding that sale of scrap in India is not a part of total turnover of the respondent firm for the purposes of calculation of deduction u/s 80HHC? (ii) Whether on facts and in the circumstances of the case, the ITAT was justified in ignoring sale of scrap in computing total turnover, when such REEMA SAINI 2016.05.02 10:18 I attest to the accuracy and authenticity of this document High Court, Chandigarh -2- generation was a bye-product of manufacturing process? (iii) Whether on facts and in the circumstances of the case, a bye-product in a Manufacturing Process is not eligible for being considered in computation of total turnover for computing 80HHC deduction? 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) 25.04.2016 JUDGE reema REEMA SAINI 2016.05.02 10:18 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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