COMMISSIONER OF INCOME TAX vs. SUN PHARMACEUTICAL INDUSTRIES LTD.

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TAXAP/742/2006HC GujaratGJHC24037728200630 November 2013Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE R.P.DHOLARIA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue raised in the appeal was squarely covered by the decision of the Hon'ble Supreme Court in the case of ACG Associated Capsules Pvt. Ltd. Vs. Commissioner of Income Tax, reported in [2012] 343 ITR 89 (SC). The Supreme Court's decision had, in effect, approved the Special Bench of the ITAT's ruling in Lalsons Enterprises Vs. DCIT (Delhi) (SB). Consequently, the High Court found that the question raised by the revenue was answered against the revenue. The appeal was therefore dismissed. The operative direction was the dismissal of the appeal, with no specific mention of any issue being left undecided.

What were the facts?

The Revenue has filed an appeal against the order dated 18.08.2005 passed by the Income Tax Appellate Tribunal (ITAT). The ITAT, in its order for Assessment Year 1997-96, had allowed the assessee's appeal and remanded the matter back to the Assessing Officer. This remand was to enable the Assessing Officer to pass a fresh order, taking into consideration the decision of the Special Bench of the ITAT in the case of Lalsons Enterprises Vs. DCIT (Delhi) (SB). The dispute pertains to the treatment of net lease rental income of Rs. 40,93,562/- and net interest income of Rs. 8,89,60,523/- for the purpose of calculating the profit for deduction under Section 80HHC of the Income-tax Act.

What were the issues?

1. Whether the Appellate Tribunal has substantially erred in law in directing the Assessing Officer to decide the issue regarding net lease rental income (Rs. 40,93,562/-) and net interest income (Rs. 8,89,60,523/-) for reducing 90% of the same to arrive at profit of the business for deduction u/s 80HHC of the Income-tax? Assessee's Contention: The assessee argued that the ITAT's direction to the Assessing Officer to consider the Special Bench decision in Lalsons Enterprises Vs. DCIT (Delhi) (SB) was correct. The assessee relied on the principle that net lease rental income and net interest income should be considered for calculating business profit for Section 80HHC deduction. Revenue's Contention: The Revenue contended that the ITAT had erred in law by directing the Assessing Officer to reduce 90% of the net lease rental income and net interest income to arrive at the business profit for the purpose of Section 80HHC deduction.

Which sections of the Income-tax Act were involved?

Section 80HHC

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
O/TAXAP/742/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 742 of 2006 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE R.P.DHOLARIA ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ COMMISSIONER OF INCOME TAX Versus SUN PHARMACEUTICAL INDUSTRIES LTD ================================================================ Appearance: MRS MAUNA M BHATT, ADVOCATE for the Appellant MR SN SOPARKAR, SENIOR ADVOCATE for the Respondent MRS SWATI SOPARKAR, ADVOCATE for the Respondent ================================================================ CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and Page 1 of 3 O/TAXAP/742/2006 JUDGMENT HONOURABLE MR.JUSTICE R.P.DHOLARIA Date : 30/11/2013

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1] Feeling aggrieved and dissatisfied with the impugned judgment and order dated 18.08.2005 passed by the learned Income Tax Appellate Tribunal (hereinafter referred to as “the ITAT”) in ITA No.249/Ahd/2001 for A.Y. 1997-96, by which the learned ITAT has “Whether the Appellate Tribunal has substantially erred in law in directing the Assessing Officer to decide the issue regarding net lease rental income (Rs.40,93,562/-) and net interest income (Rs.8,89,60,523/-) for reducing 90% of the same to arrive at profit of the business for deduction u/s 80HHC of the Income-tax?” [2] Heard Mr.Manish R. Bhatt, learned counsel appearing on behalf of the appellant – revenue and Mr.S. N. Soparkar, learned counsel appearing on behalf of the respondent – assessee. [3] At the outset, it is required to be noted that now, the issue O/TAXAP/742/2006 JUDGMENT involved in the present appeal is squarely covered by the decision of the Hon’ble Supreme Court in the case of ACG Associated [2012] 343 ITR 89 (SC). By the aforesaid decision, the Hon’ble [4]

Considering the above facts and circumstances and applying the ratio laid down by the Hon’ble Supreme Court in the case of ACG vijay

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