COMMISSIONER OF INCOME TAX, HISAR vs. M/S PARKASH INDUSTRIES LTD., HISAR

ITA/290/2004HC Punjab & HaryanaPHHC01051436200424 September 2015Author: MR. JUSTICE SURINDER GUPTA,MRS JUSTICE DAYA CHAUDHARY7 pages
AI SummaryAllowed

What were the facts?

The Revenue appealed against an order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 1991-92. The assessee, M/s Parkash Industries Limited, claimed deductions under Sections 80HH and 80I of the Income Tax Act, 1961, amounting to `1,09,43,158/- and `1,36,78,948/- respectively. The Assessing Officer (AO) noticed that the assessee had six industrial units and claimed deductions on profits from eligible units without adjusting losses from other units. The AO adjusted these losses, reducing the deduction. The Commissioner of Income Tax (Appeals) partly allowed the assessee's appeal. The ITAT dismissed the Revenue's appeal, leading to the present appeal before the High Court.

What did the High Court hold?

The High Court held that the substantial question of law is answered in favour of the revenue and against the assessee. The Court agreed with the view taken by the Madras High Court in Macmillan Co. of India Ltd. and Bombay High Court in Nima Specific Family Trust and Synco Industries Ltd. It reasoned that the provisions of Section 80A(2), 80B(5), and 80AB of the Act, which define gross total income and limit aggregate deductions to gross total income, were not considered in the Canara Workshops case. The Court found the judgments relied upon by the assessee, except for Distributors (Baroda) P.Ltd., distinguishable as they did not consider Section 80AB. The Court concluded that the component on which deduction is permissible under Section 80I is the gross total income, which must be computed after adjusting losses from other industrial undertakings. Therefore, the ITAT's decision was set aside, and the appeal was allowed in favour of the revenue.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in upholding the decision of the CIT(A) directing the ITO to allow deductions under Section 80HH and 80I of the Income Tax Act, 1961, without adjusting the losses of other loss-making industrial undertakings of the same assessee with the profit of eligible profit-making units? Assessee's Contention: The assessee relied on the Supreme Court judgment in CIT Vs. Canara Workshops Pvt. Ltd. (1986) 161 ITR 320 (SC) and other High Court decisions, arguing that losses from other units could not be set off against profits of eligible units for calculating deductions under Section 80I. Revenue's Contention: The revenue relied on this Court's judgment in Bajaj Motors P. Limited vs. Commissioner of Income Tax, (2012) 347 ITR 472, and other Supreme Court judgments like Distributors (Baroda) P. Ltd. Vs. Union of India (1985) 155 ITR 120 (SC) and H.H.Sir Rama Varma Vs. Commission of Income-Tax (1994) 205 ITR 433 (SC). It argued that deductions under Section 80I are referable to total income, which must be worked out after considering losses from other units, citing Sections 80A(2), 80AB, and 80B(5).

Which sections of the Income-tax Act were involved?

Section 260A,Section 80HH,Section 80I,Section 80A(1),Section 80A(2),Section 80AB,Section 80B(5),Section 80E,Section 80M

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 24.9.2015 Commissioner of Income Tax, Hisar ……Appellant

M/s Parkash Industries Limited, Hisar …..Respondent CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON’BLE MR. JUSTICE RAMENDRA JAIN

1.

Whether Reporters of local papers may be allowed to see the judgment?

2.

To be referred to the Reporters or not?

3.

Whether the judgment should be reported in the Digest? Present: Mr. Tajender K.Joshi, Advocate for the appellant-revenue. Mr. Anand Chhibbar, Sr. Advocate with Ms. Riya Bansal, Advocate for the respondent-assessee.

Ajay Kumar Mittal,J.

1.

This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 8.3.2002, Annexure AIII passed by the income Tax Appellate Tribunal, Delhi Bench 'B' in ITA No.1933/Del./95 for the assessment year 1991-92. This appeal was admitted on 9.8.2007 to consider following substantial question of law:- “Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in upholding the decision of CIT (A) dire

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 80HH

All 84 judgments and leading authorities on Section 80HH →

Recent GST High Court judgments

Search GST case law →