COMM. OF INCOME TAX vs. M/S MITTAL OVERSEAS, PANIPAT

ITA/710/2010HC Punjab & HaryanaPHHC01093674201017 December 2010Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryRemanded

What were the facts?

The Revenue, Commissioner of Income-Tax, Karnal, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 27.11.2009 passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench. The appeal pertains to assessment year 2004-05 and challenges the ITAT's decision regarding deduction under Section 80HHC for the assessee, M/s Mittal Overseas. The dispute involves the eligibility of the face value of Duty Entitlement Pass Book (DEPB) for deduction, particularly in light of amendments to Section 80HHC, and whether the entire DEPB amount should be included in business profit computation. The High Court was presented with the substantial questions of law.

What did the High Court hold?

The High Court noted that the revenue's counsel stated the matter was covered in favor of the revenue by the High Court's earlier decision in Commissioner of Income-Tax Vs. M/s F.C.Sondhi & Company (P) Ltd. Consequently, following this precedent, the High Court remanded the matter back to the ITAT for a fresh decision in accordance with the law. The court clarified that if the assessee was aggrieved by the ITAT's subsequent decision, it could approach the High Court. The judgment did not provide a finding on the substantial questions of law themselves, nor did it detail the reasoning of the ITAT or the ratio decidendi for the High Court's decision on the merits. The operative direction was a remand.

What were the issues?

The High Court was asked to decide the following substantial questions of law: 1. Whether the ITAT was justified in allowing deduction under Section 80HHC on the face value of DEPB, considering the proviso (ii), (iii), and (iv) inserted by the Taxation Law (Amendment) Act, 2005, with retrospective effect from 1.4.1998, especially when the turnover exceeds Rs. 10 crores? 2. Whether the ITAT was justified in allowing deduction under Section 80HHC in respect of the entire DEPB amount by incorporating the same in the computation of business profit under Section 28(iiib)? Contentions: Revenue: The revenue argued that the matter is covered in its favor by a previous order of the High Court dated 16.8.2010 in ITA No. 299 of 2010 (Commissioner of Income-Tax Vs. M/s F.C.Sondhi & Company (P) Ltd.). Assessee: No specific contentions for the assessee were recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80HHC,Section 28(iiib)

AI-generated summary — verify with the full judgment below

Income-tax Appeal No.710

of 2010

-1- **** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income-tax Appeal No.710

of 2010

Date of decision: 17.12.2010 Commissioner of Income-Tax, Karnal ...Appellant Versus M/s Mittal Overseas, G.T.Road, Sewah, Panipat ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr. Yogesh Putney, Advocate for the appellant.

**** ADARSH KUMAR GOEL, J (

Oral)

.

1.

This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 against order dated 27.11.2009 passed by the Income Tax Appellate Tribunal, Delhi Bench (G), New Delhi in ITA No.2441/Del/2007, for the assessment year 2004-05, proposing following substantial questions of law:- “1. Whether on the facts and circumstances of the case, the Hon'ble ITAT was justified in allowing deduction u/s 80 HHC on the face value of DEPB in the case where turnover exceeds Rs.10 crores in view of proviso (ii), (iii) and (iv) inserted by the taxation law (Amendment) Act, 2005 with retrospective effect from 1.4.1998?

Income-tax Appeal No.710

of 2010

-2- ****

2.

Whether on

The order continues below.

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