M/S DEVA SINGH SHAM SINGH vs. C I T AND ANR.

ITA/180/2007HC Punjab & HaryanaPHHC01072858200710 February 2011Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What were the facts?

The assessee, M/s Deva Singh Sham Singh, an exporter, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Amritsar. The assessment year in question is 2001-02. The Assessing Officer had assessed the assessee's income at nil. However, the Commissioner of Income Tax invoked jurisdiction under Section 263 of the Act, contending that the deduction under Section 80HHC could not be granted by considering brought forward losses. This view was upheld by the ITAT. The appeal challenges the ITAT's order.

What did the High Court hold?

The Tribunal upheld the view that brought forward losses and unabsorbed depreciation have priority for set-off over the deduction under Section 80HHC. The High Court, in its decision, noted that the assessee's counsel fairly stated that the Tribunal's view was in consonance with the law laid down by the Supreme Court in IPCA Laboratory Ltd. v. Dy. Commissioner of Income Tax, Mumbai and Synco Industries Ltd. v. Assessing Officer, Income Tax, Mumbai. Consequently, the questions raised by the assessee were answered against it. The appeal was dismissed, affirming the ITAT's order that the benefit of Section 80HHC could not be given by taking into account brought forward losses. The principle established is that prior losses and depreciation must be set off before calculating deductions under Section 80HHC.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the deduction under Section 80HHC is allowable against current year export income, considering the facts and circumstances of the case. 2. Whether brought forward losses and unabsorbed depreciation have priority for set-off compared to the deduction under Section 80HHC for the current year. 3. Whether a liberal construction should be applied to the language of Section 80HHC. The assessee argued that a liberal construction should be placed on the statute. The revenue contended that brought forward losses and unabsorbed depreciation have priority over the deduction under Section 80HHC. The assessee's counsel conceded that the Tribunal's view was in consonance with Supreme Court judgments in IPCA Laboratory Ltd. v. Dy. Commissioner of Income Tax, Mumbai and Synco Industries Ltd. v. Assessing Officer, Income Tax, Mumbai.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 80 HHC,Section 263

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision: 10.2.2011 M/s Deva Singh Sham Singh -----Appellant. Vs. Commissioner of Income Tax & another. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Akshay Bhan, Advocate for the appellant. Mr. Sukant Gupta, Standing Counsel for respondents. --- ADARSH KUMAR GOEL, J.

This appeal has been preferred by the assessee under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, Amritsar in I.T.A. No.25(ASR)/2006 for the assessment year 2001-02 raising following substantial questions of law:- “(i) Whether in the facts and circumstances of the case, the learned CIT was justified in arriving at the conclusion that the deduction u/s 80 HHC is not allowable against current year export income? (ii) Whether in the facts and circumstances of the case, brought forward losses and unabsorbed depreciation have priority to be set off as compared to the deduction under Section 80 HHC for the current year?

(iii) Whether in the facts and circumstances of th

The order continues below.

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