COMMISSIONR OF INCOME TAX-I LUDHIANA vs. M/S GETRAG HI-TECH GEARS (INDIA) PVT LTD.

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 28.7.2011 passed by the Income Tax Appellate Tribunal, Chandigarh Bench “A”, Chandigarh (hereinafter referred to as “the Tribunal) in ITA No. 128/CHD/2011, for the assessment year 2006-07, claiming the following substantial question of law:- (i) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal is justified in law in allowing deduction u/s 10B of the Income Tax Act, 1961 on the following items of income holding that they are directly related to the profits 'derived from' industrial undertaking from export of articles or things:- (a) Sundry creditors written back Rs.4,25,654/- -2- (b) Exchange rate difference Rs.12,29,174/- (c) Sale of empties and Misc. Rs.5,65,188/- scrap. (d) Scrap sale Rs.36,91,553/- whereas the same are not directly related to the profits 'derived from' industrial undertaking from export of articles or things as held by the Assessing Officer in view of the decision of Hon'ble Supreme Court in the case of CIT v. Sterling Food reported at 237 ITR 579? (ii) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal is justified in law in relying upon its own order passed in ITA No. 838/Chandi/2009 in assessee's own case for the Assessment Year 2005-06 holding that income from the above items being profits of business are entitled to benefit of deduction claimed u/s 10B of the Act, whereas the Revenue has filed appeal before the Hon'ble P&H High Court against the said order?

We have heard learned counsel for the parties.

Learned counsel for the revenue submitted that the issue in respect of the same assessee relating to the earlier assessment year 2005-06 was considered by this Court in ITA No. 763 of 2010 (Commissioner of Income Tax-I, Ludhiana v. M/s Getrag Hi-Tech Gears (India) Pvt. Ltd.) decided on March 27, 2012, wherein this Court while setting aside the order passed by the Tribunal had remanded the -3- matter to the Tribunal to decide the same afresh. This Court held as under:- “Accordingly, impugned order dated 29.01.2010 (A-3) is set aside. The matter is remanded back to the Tribunal to decide the matter afresh. However, we make it clear that any observation made in this order shall not be construed as expression of opinion on the merit of the controversy because we have been principally influenced for setting aside the impugned order because the Tribunal has followed the view of Rajasthan High Court, which was expressed in respect of the earlier assessment year and the provisions of Section 10-B of the Act have drastically amended. The amended provision would apply to the case in hand. The parties through their counsel are directed to appear before the Tribunal on Ist May, 2012.”

Learned counsel for the assessee has not disputed the aforementioned fact.

In view of the above, the order dated 28.7.2011 is set aside and the present appeal is decided in the same terms. The appeal stands disposed of accordingly. (AJAY KUMAR MITTAL) JUDGE July 27, 2012 (G.S. SANDHAWALIA) gbs JUDGE