M/S OSWAL WOOLEN MILLS vs. THE CCOMMISSIONER OF INCOME TAX

ITA/166/2002HC Punjab & HaryanaPHHC01049132200222 May 2013Author: MR. JUSTICE HEMANT GUPTA,MS. JUSTICE RITU BAHRI2 pages
AI SummaryDismissed

What were the facts?

The assessee, Oswal Woollen Mills Limited, is in appeal against an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, for the assessment year 1992-93. The appeal is filed under Section 260-A of the Income Tax Act, 1961. The revenue is represented by the Commissioner of Income Tax (Central) Ludhiana. The core issue revolves around the assessee's eligibility for deduction under Section 80HHC of the Act when the figure of profits of business was negative. The High Court noted that none appeared for the appellant.

What did the High Court hold?

The High Court held that the assessee was not entitled to deduction under Section 80HHC of the Act when the figure of profits of business was negative. The Court relied on the Supreme Court's judgment in IPCA Laboratory Ltd. Vs. Deputy Commissioner of Income Tax (2004) 266 ITR 521. In that judgment, the Supreme Court held that the word 'profit' in Section 80HHC(1) and its sub-sections (3)(a) and (3)(b) means a positive profit, and if there is a loss, no deduction would be available. Therefore, the question of law was answered against the assessee. The operative direction was to answer the question of law against the assessee.

What were the issues?

1. Whether, on a proper interpretation of Section 80HHC of the Income Tax Act, 1961, the ITAT was justified in holding that the appellant was not entitled to deduction when the figure of profits of business was negative? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. Revenue's Contention: The judgment does not record any specific contentions made by the revenue, other than implicitly supporting the ITAT's decision which is being challenged by the assessee.

Which sections of the Income-tax Act were involved?

Section 80HHC,Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

I.T.A. No.166 of 2002 Date of Decision:22.05.2013 CORAM:- HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MS. JUSTICE RITU BAHRI Present:- None for the appellant. Mr. Rajesh Katoch, Advocate, for the respondent. HEMANT GUPTA, J.(Oral) The present appeal under Section 260-A of the Income Tax Act, 1961 (for short, 'the Act') arises out of an order passed by Income Tax Appellate Tribunal, Chandigarh Bench `A', Chandigarh (for short 'the Tribunal') for the assessment year 1992-93. After going through the record, we find that the following substantial question of law arises for consideration of this Court: “Whether on a proper interpretation of the provisions of Section 80HHC of the Act, the Ld. ITAT was, on facts and circumstances in the case of the appellant, justified in holding that appellant, herein, was not entitled to deduction when the figure of profits of business was negative? The issue; whether the assessee is entitled to deduction when figure o

The order continues below.

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