COMMISSIONER OF INCOME TAX vs. M/S AMAR ENTERPRISES

PDF · subscribers
ITA/63/2003HC Punjab & HaryanaPHHC01024585200310 November 2009Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE GURDEV SINGH2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for consideration. The Court noted that the view taken by the ITAT was consistent with the judgment of the Hon'ble Supreme Court in Hero Exports vs. Commissioner of Income Tax (295 ITR 454). Therefore, the High Court found no reason to interfere with the ITAT's order. The operative direction was to dismiss the appeal. No issues were expressly left undecided.

What were the facts?

The Revenue (Commissioner of Income Tax-I, Ludhiana) appealed to the High Court against an order of the Income Tax Appellate Tribunal (ITAT) for assessment years 1992-93, 1993-94, and 1994-95. The appeal challenged the ITAT's upholding of the Commissioner of Income Tax (Appeals) order, which allowed the assessee (M/s Amar Enterprises) a deduction under Section 80HHC. The dispute centered on the calculation of profits for Section 80HHC, specifically whether 10% of export incentives could be deducted in addition to direct and indirect expenses. The Assessing Officer had rejected this apportionment, but the CIT(A) and ITAT allowed it. The High Court had initially ruled against the assessee, but the Supreme Court remanded the matter for fresh consideration, citing its judgment in Hero Exports vs. Commissioner of Income Tax.

What were the issues?

1. Whether, on the facts and circumstances, the ITAT was justified in upholding the CIT(A)'s deletion of an addition of Rs. 3,66,343/- on account of deduction under Section 80HHC, by allowing the deduction of 10% of export incentive in addition to direct and indirect expenses while calculating profits under Section 80HHC(3)(b)? Assessee's contentions: The assessee argued that the calculation of profits for Section 80HHC deduction, as allowed by the CIT(A) and upheld by the ITAT, was correct. They relied on the principle that export incentives are part of the business income and that expenses attributable to earning such incentives should be deducted. Revenue's contentions: The revenue contended that the Assessing Officer's rejection of the assessee's apportionment of 10% of expenses against export incentives was justified. They argued that the benefit of costs not related to export turnover could not be deducted from income derived from export incentives.

Which sections of the Income-tax Act were involved?

Section 80HHC,Section 260A,Section 80HHC(3)(b)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
ITA No. 63 of 2003 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 63 of 2003 (O&M) Date of decision: November 10, 2009 Commissioner of Income Tax-I, Ludhiana ...Appellant Versus M/s Amar Enterprises ...Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE GURDEV SINGH Present: Mr. Rajesh Sethi, Advocate, for the revenue. Mr. Vivek Verma, Advocate, for the assessee.

ORDER

1.

This appeal had been preferred by the revenue under Section 260A of Income Tax Act, 1961 (for short, “the Act”) against the order of Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh, passed in I.T.A. No. 15/Chandi/99 and ITA Nos. 397 & 893/Chandi/97 dated 12.9.2002 for the assessment year 1992-93, 93-94 & 94-95, proposing to raise following substantial question of law:- “(i) Whether on the facts and the circumstances of the case, the Hon'ble Income tax Appellate Tribunal was justified in upholding the order of the Commissioner of Income tax (Appeals) deleting the addition of Rs. 3,66,343/- on account of deduction u/s 80HHC by allowing the deduction of 10% of export incentive in addition to the direct expenses and indirect expenses while calculating profits of the business u/s 80HHC (3) (b)?”

2.

The assessee claimed deduction under Section 80 HHC but the calculation of the assessee was rejected by the Assessing Officer to the extent the assessee had apportioned 10% of expenses against export

ITA No. 63 of 2003 2 incentive. However, CIT (A) and the Tribunal upheld the claim of the assessee.

3.

On further appeal to this Court, it was held that the benefit of cost not related to export turnover could not be deducted from income from export incentives. However, on further appeal, the Hon'ble Supreme Court judgment of the Hon'ble Supreme Court in Hero Exports (Supra), no substantial question of law arises for consideration.

6.

The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE November 10, 2009 (GURDEV SINGH ) prem

JUDGE

More judgments on Section 80HHC

All 1,083 judgments and leading authorities on Section 80HHC →

Recent GST High Court judgments

Search GST case law →