MODGIL FASHION EXPORTS vs. CIT LUDHIANA

ITA/137/2010HC Punjab & HaryanaPHHC01093039201015 May 2012Author: MR. JUSTICE GURMEET SINGH SANDHAWALIA3 pages
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What were the facts?

The assessee, Modgil Fashion Exports, filed an appeal under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Chandigarh Bench, for the assessment year 2004-05. The appeal was filed against the order of the Tribunal which had dealt with claims for deductions under various sections of the Act. The procedural history involves the assessee filing an appeal to the High Court after the Tribunal's decision. The amount in dispute is not explicitly stated.

What did the High Court hold?

The High Court decided the substantial questions of law based on its previous judgments and the Supreme Court's ruling. For the first question (a), the Court held that if a deduction under Section 80IA was made, a deduction under Section 80HHC was not admissible, in view of Section 80IB(13) read with Section 80IA(9) of the Act. This was decided in favour of the revenue and against the assessee, following the decision in CIT vs. Davinder Exports (ITA No. 371 of 2007). For the second question (b), the Court held that the matter stood concluded by its judgment in Kohinoor International vs. CIT (ITA No. 122 of 2011), which followed the Supreme Court's decision in Topman Exports vs. CIT. Accordingly, the matter was remanded back to the Assessing Officer to pass a fresh order in accordance with law and in light of the Supreme Court's judgment in Topman Exports. The principle for the first issue is that deductions under Section 80HHC are not admissible if Section 80IA deductions have been claimed, due to the interplay of Sections 80IA(9) and 80IB(13). The operative direction for the second issue is a remand to the Assessing Officer.

What were the issues?

The High Court had to decide two substantial questions of law: 1. Whether on the true and correct interpretation of the provisions of Section 80HHC read with Section 80IA(9) and Section 80IB(13), the Tribunal erred in restricting the claim of deductions under the Act? (Question of law) 2. Whether on the true and correct interpretation of the provisions of Section 28(iiid) read with Section 80HHC, the 'Profit' or the whole amount of DEPB is to be excluded for computation of the deduction? (Question of mixed law and fact) Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 80HHC,Section 80IA,Section 80IA(9),Section 80IB(13),Section 28(iiid)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH DATE OF DECISION: May 15, 2012 Modgil Fashion Exports .........APPELLANT(S)

VERSUS Commissioner of Income Tax, Ludhiana

......RESPONDENT(S) CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL HON'BLE MR. JUSTICE G.S. SANDHAWALIA Present: Mr. Pankaj Jain, Advocate, for the appellant. Mr. Rajesh Katoch, Advocate, for the respondent. AJAY KUMAR MITTAL, J. (Oral)

1.

The present appeal has been filed under Section 260-A of the Income Tax Act, 1961 (in short 'The Act') against the order passed by the Income Tax Appellate Tribunal, Chandigarh “A” Bench in ITA No. 198/CHD/2009 dated 28.05.2009 for the assessment year 2004-05. 2. The following substantial questions of law were framed for consideration of this Court:- “a. Whether on the true and correct interpretation of the provisions of Section 80HHC r.w. Section 80IA(9) r.w. Section 80IB(13) the Tribunal has erred in restricting the claim of deductions under the Act? b. Whether on the true and correct interpretation of the provisions of Section 28(iiid) r.w. Section 80HHC the ITA No.

The order continues below.

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