C I T vs. M/S NAGESH EXCLUSIVE

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ITA/933/2008HC Punjab & HaryanaPHHC01080975200818 July 2013Author: MR. JUSTICE DR. BHARAT BHUSHAN PARSOON,MR. JUSTICE RAJIVE BHALLA2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the question of law raised in the appeal had already been decided against the Revenue and in favour of the Assessee in ITA No.539 of 2008, Commissioner of Income Tax-I, Ludhiana v. Sarin Industrial Corporation, decided on the same date. Therefore, the High Court answered the question of law in terms of the order passed in the aforementioned appeal. The principle established in the cited case, which the present judgment follows, is that exchange rate fluctuations are not to be treated as 'other receipts' for the purpose of Section 80HHC(4C)(baa). Consequently, the Revenue's appeal was dismissed. No issue was expressly left undecided.

What were the facts?

The Revenue, Commissioner of Income Tax-I, Ludhiana, filed an appeal before the High Court challenging an order dated July 31, 2007, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench-B. The appeal pertains to the assessment year(s) not explicitly stated in the judgment. The dispute revolves around the ITAT's decision regarding exchange rate fluctuations. The Revenue sought to appeal the ITAT's finding that these fluctuations were not 'other receipts' and therefore 90% of them could not be reduced from the 'profit of business' under Section 80HHC(4C)(baa) of the Income Tax Act. The appeal was filed with a delay of 37 days, which was condoned by the High Court.

What were the issues?

1. Whether, on the facts and in law, the Hon'ble Income Tax Appellate Tribunal was justified in holding that exchange rate fluctuation were not in the nature of “other receipts” and 90% of such receipts could not be reduced from 'profit of business' under clause (baa) of Explanation below Section 80 HHC(4C) of I.T. Act? The Revenue contended that the ITAT erred in its decision regarding the treatment of exchange rate fluctuations. The Assessee's contentions are not recorded in the judgment. The parties agreed that the question of law had been answered against the Revenue and in favour of the Assessee in a prior, contemporaneously decided appeal (ITA No.539 of 2008, Commissioner of Income Tax-I, Ludhiana v. Sarin Industrial Corporation).

Which sections of the Income-tax Act were involved?

Section 80HHC(4C)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: July 18, 2013. Commissioner of Income Tax-I, Ludhiana ... Appellant v. M/s Nagesh Exclusive ... Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Shri Rajesh Katoch, Advocate, for the appellant. None for the respondent. Rajive Bhalla

, J. (Oral): C.M. No.25961-CII of 2008 Allowed, subject to all just exceptions. Appellant is exempted from filing certified copies of Annexures A-1 and A-2. C.M. No.25962-CII of 2008 Prayer in the present application is to condone delay of 37 days in filing the appeal. Heard.

For the reasons stated in the application and arguments raised by counsel for the appellant, delay in filing the appeal is condoned. ITA No.933 of 2008 The revenue has filed this appeal challenging order dated 31.7.2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench-B, Chandigarh on the following questions of law:- “Whether on the facts and law, the Hon'ble Income Tax Kadyan Vinod Kumar 2013.09.23 17:13 I attest to the accuracy and integrity of this document Chandigarh Appellate Tribunal was justified in holding that exchange rate fluctuation were not in the nature of “other receipts” and 90% of such receipts could not be reduced from 'profit of business' under clause (baa) of Explanation below Section 80 HHC(4C) of I.T. Act?” Counsel for the parties agree that the aforesaid question of law has been answered against the revenue and in favour of the assessee in ITA No.539 of 2008, Commissioner of Income Tax-I, Ludhiana v. Sarin Industrial Corporation, decided vide order of even date. In view of the above, we answer the question of law in terms of orders of even date passed in ITA No.539 of 2008 and dismiss the appeal.

[ Rajive Bhalla ]

Judge

[Dr. Bharat Bhushan Parsoon] July 18, 2013. Judge kadyan Kadyan Vinod Kumar 2013.09.23 17:13 I attest to the accuracy and integrity of this document Chandigarh

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