M/S LIBERTY SHOES LTD. vs. CIT KARNAL

PDF · subscribers
ITA/473/2009HC Punjab & HaryanaPHHC01084584200924 August 2009Author: MR. JUSTICE ADARSH KUMAR GOEL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal. The Court noted that the learned counsel for the assessee did not dispute that the matter was covered against the assessee by the judgment of the Hon'ble Supreme Court in CIT V. Sterling Food, (1999) 237 ITR 579, and an order of the High Court dated September 9, 2008, in ITA No. 629 of 2007 (M/s Raj Oversease vs. The Commissioner of Income Tax, Ludhiana.). Based on this concession, the High Court found no grounds to interfere with the ITAT's decision. Therefore, the appeal was dismissed without delving into the merits of the substantial questions of law raised by the assessee. No specific findings were given on each issue, as the dismissal was based on the assessee's acknowledgment that the matter was covered by precedent.

What were the facts?

The assessee, M/s Liberty Shoes Ltd., filed an appeal under Section 260A of the Income Tax Act, 1961, against the order dated June 20, 2008, of the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'B'. The appeal pertains to the assessment year 2001-2002. The assessee is challenging the ITAT's decision regarding the eligibility for deduction under Section 80-IA and Section 80HHC of the Act on profits and gains arising from duty drawback, DEPB, and premium on the sale of import licenses. The High Court condoned the delay in filing the appeal.

What were the issues?

1. Whether the ITAT was justified in holding that the appellant was not entitled to deduction under Section 80-IA in respect of profits and gains arising from duty drawback, DEPB, and premium on the sale of import licenses, as these are intrinsically related to the business profits of the industrial undertaking. 2. Whether the ITAT was justified in denying the claims under Section 80-IA by relying on judgments that are distinguishable on facts. 3. Whether the ITAT was justified in reversing the CIT(A)'s orders by holding that deduction under Section 80HHC is not available on DEPB license and premium on the sale of import licenses, contrary to the Supreme Court's judgment in B. Des Raj V. CIT. 4. Whether the findings of the ITAT are perverse and against the evidence on record, thus unsustainable in law. 5. Whether the ITAT misdirected itself by being influenced by irrelevant factors and applying erroneous criteria while deciding the eligibility for deduction under Section 80-IA. Assessee's contentions: The assessee argued that duty drawback, DEPB, and premium on import licenses are intrinsically related to the business profits of the industrial undertaking and therefore eligible for deduction under Section 80-IA. They also contended that the ITAT's reliance on certain judgments was misplaced and that the denial of deduction under Section 80HHC on DEPB and import license premium was against the Apex Court's ruling in B. Des Raj V. CIT. The assessee also raised grounds of perverse findings and misdirection of law by the ITAT. Revenue's contentions: The judgment records no specific contentions for the revenue, but it notes that the assessee does not dispute that the matter is covered against the assessee by specific judgments.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80IA,Section 80HHC

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

ITA No.473 of 2009 (O&M) Date of decision: 24.8.2009 M/s Liberty Shoes Ltd., through Shri Shammi Bansal CORAM:- HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MRS.JUSTICE DAYA CHAUDHARY PRESENT: Mr.S.K.Mukhi, Advocate for the appellant. **** ADARSH KUMAR GOEL, J. (Oral)

1.

Delay condoned subject to just exceptions.

2.

Heard on merits.

3.

The assessee has preferred this appeal under Section 260A of the Income Tax Act, 1961 (for short, “the Act”), against the orders dated 20.6.2008 of ITAT Delhi , Bench 'B' in I.T.A. No.2251 /DEL/2006 for the assessment year 2001-2002, proposing to raise following substantial questions of law: I.“That whether the ITAT was justified in law in holding that appellant was not entitled to the deduction u/s 80 IA in respect of profits and gains arising on account of duty drawback, DEPB and premium on sale of import license which is intrinsically related/connected to the business profits of [2] the industrial undertaking.” II.“That the income Tax Appellate Tribunal was not justified in denying the claims of the appellant u/s 80-IA of the Income Tax Act, 1961 by blindly relying upon the judgment of this Hon'ble Court in the case of Liberty India and other judgments which are distinguishable on facts itself. III. “That the ITAT is not justified in reversing the orders of CIT(A) by holding that deduction u/s 80HHC of the Income Tax Act, 1961 is not available on DEPB license and premium on sale of import licence to the appellant which is against the latest judgment of the Apex Court in the case of B. Des Raj V. CIT (SC)”. IV.“Whether on the facts and circumstances of the case, the findings of ITAT are perverse and against the evidence on record thus unsustainable in law.” V.“Whether the ITAT has misdirected itself in being influenced by irrelevant [3] factors and applying erroneous criteria while deciding the issue of eligibility for claiming deduction under Section 80 -IA of the Income Tax Act, 1961.”

4.

Learned counsel for the assessee does not dispute that the matter is covered against the assessee by judgment of the Hon'ble Supreme Court in CIT V. Sterling Food, (1999) 237 ITR 579 and order of this Court dated 9.9.2008 in ITA No. 629 of 2007 (M/s Raj Oversease vs. The Commissioner of Income Tax, Ludhiana.).

5.

Accordingly, the appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE (DAYA CHAUDHARY) August 24, 2009

JUDGE raghav Note: Whether this case is to be referred to the Reporter? ........Yes/No

More judgments on Section 80IA

All 1,796 judgments and leading authorities on Section 80IA →

Recent GST High Court judgments

Search GST case law →