M/S RAGHU EXPORTS THR PARVEEN KUMAR vs. COMMISSIONER OF INCOME TAX-1, JALANDHAR

ITA/3/2012HC Punjab & HaryanaPHHC01099382201201 May 2012Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE GURMEET SINGH SANDHAWALIA3 pages
AI SummaryRemanded

What were the facts?

The assessee, M/s Raghu Exports, filed an appeal before the Punjab and Haryana High Court against an order dated December 24, 2010, passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench. The appeal pertained to the assessment year 2003-04. The ITAT's order had dismissed the assessee's appeal, reversing its own earlier order. The dispute revolved around the treatment of income from Duty Drawback (DBK), Duty Entitlement Pass Book (DEPB), and Duty Free Replenishment Certificate (DFRC) for the purpose of deduction under Section 80HHC of the Income Tax Act, 1961. The assessee contended that the ITAT erred in dismissing its appeal by blindly following a Special Bench decision of the Mumbai ITAT and a Bombay High Court judgment, without allowing proper arguments. The revenue did not contest the assessee's submissions.

What did the High Court hold?

The High Court allowed the appeal. It set aside the impugned order of the ITAT dated December 24, 2010. The matter was remanded back to the Assessing Officer. The Assessing Officer was directed to compute the deduction under Section 80HHC of the Act in accordance with law and in light of the judgment of the Hon'ble Supreme Court in the case of M/s Topman Exports. The High Court noted that learned counsel for the revenue did not controvert the assessee's contention that the issue involved was concluded by the judgments in M/s Topman Exports and M/s Turbo Impex. Therefore, the appeal was allowed in the same terms as those judgments. The specific questions of law raised by the assessee regarding natural justice and the ITAT's reasoning were implicitly addressed by the remand, which allows for a fresh computation in light of the Supreme Court's decision.

What were the issues?

1. Whether the ITAT was justified in dismissing the assessee's appeal and reversing its own earlier order by following the judgment of the Special Bench of the Mumbai ITAT in M/s Topman, and the Bombay High Court judgment, without allowing the assessee's counsel to argue and rebut the findings, thus violating principles of law and natural justice? (Question of law and fact, concerning principles of natural justice and procedural fairness). 2. Whether the ITAT was justified in dismissing the appeal by observing that the Punjab and Haryana High Court had agreed with the Bombay High Court's findings, without properly appreciating that the High Court had only agreed in part and had remanded the main issue of the value of DBK, DEPB, and DFRC to the ITAT for fresh decision? (Question of law and fact, concerning interpretation of High Court's earlier order). 3. Whether the ITAT was justified in dismissing the appeal without allowing the assessee's counsel to argue and rebut the findings of the Bombay High Court, erroneously holding that the Punjab and Haryana High Court's agreement with the Bombay High Court left no scope for the ITAT to consider arguments, which is against principles of law and natural justice? (Question of law and fact, concerning principles of natural justice and procedural fairness). 4. Alternatively, whether the ITAT Amritsar was justified in concurring with the Bombay High Court that the entirety of the sale consideration of DEPB falls within the purview of Section 28(iiid) without reducing any face value of DEPB from the total sale consideration for arriving at profits on transfer of DEPB? (Question of law, concerning Section 28(iiid)). 5. Whether the orders of the Tribunal are legally unsustainable, bad in law, and perverse? (Question of law). Assessee's contentions: The assessee relied on the Supreme Court judgment in M/s Topman Exports v. CIT and this Court's judgment in M/s Turbo Impex v. CIT to contend that the substantial questions of law should be answered in their favor. Revenue's contentions: The revenue did not controvert the assessee's contention that the issue was concluded by the aforesaid judgments.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80HHC,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: 01-05-2012 M/s Raghu Exports ...Appellant Versus Commissioner of Income Tax-I, Aayakar Bhawan, Jalandhar

...Respondent CORAM: HON'BLE MR.JUSTICE AJAY KUMAR MITTAL HON'BLE MR. JUSTICE GURMEET SINGH SANDHAWALIA Present: Mr. Rajiv Sharma, Advocate for the appellant. Mr. Vivek Sethi, Advocate for the respondent. Ajay Kumar Mittal,J.

1.

The assessee has preferred this appeal under section 260A of the Income Tax Act, 1961 (in short, “the Act) against the order dated 24.12.2010, Annexure A.6 passed by the Income Tax Appellate Tribunal, Amritsar Bench (for brevity, “the Tribunal”) in ITA No.53(ASR) 2009, for the assessment year 2003-04, claiming following substantial questions of law:- i) Whether ITAT was justified in dismissing the appeal of the appellant and thereby reversing its own earlier order by following the judgment of Special Bench of Mumbai ITAT in the case of M/s Topman by blindly following and confirming the judgment of Hon'ble Bombay High Court without considering or even allowing the counsel to argue and rebut the findings of the

The order continues below.

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