M/S LIBERTY SHOES LTD. vs. CIT KARNAL

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ITA/469/2009HC Punjab & HaryanaPHHC01084579200921 August 2009Author: MR. JUSTICE ADARSH KUMAR GOEL,MRS JUSTICE DAYA CHAUDHARY3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal. The learned counsel for the assessee conceded that the matter was covered against the assessee by this Court's order dated September 9, 2008, in ITA No. 629 of 2007 (M/s Raj Oversease Vs. The Commissioner of Income Tax, Ludhiana). Therefore, the High Court did not delve into the merits of the substantial questions of law framed. The operative direction was to dismiss the appeal. No issues were expressly left undecided, as the appeal was disposed of based on the concession.

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 of the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'I', dated November 16, 2007. The appeal pertains to the assessment year 2003-04. The dispute involves the assessee's eligibility for deduction under Section 80IA of the Act in respect of profits and gains arising from DEPB and premium on sale of import licenses, and also deduction under Section 80HHC on duty drawback and sale of replenishment licenses. The High Court of Punjab and Haryana at Chandigarh is hearing the appeal.

What were the issues?

1. Whether the ITAT was justified in holding that the appellant was not entitled to deduction under Section 80IA in respect of profits and gains arising on account of DEPB and premium on sale of import license, which are intrinsically related to the business profits of the industrial undertaking? 2. Whether the ITAT was justified in denying the claims under Section 80IA by relying on judgments distinguishable on facts? 3. Whether the ITAT was justified in reversing the orders of the CIT(A) by holding that deduction under Section 80HHC is not available on duty drawback and sale of replenishment licenses, contrary to the Supreme Court judgment in B. Des Raj Vs. 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 80IA? Assessee's Contentions: The assessee argued that profits from DEPB, premium on sale of import licenses, duty drawback, and sale of replenishment licenses are intrinsically related to the business profits and thus eligible for deduction under Sections 80IA and 80HHC. They contended that the ITAT's reliance on certain judgments was misplaced due to factual distinctions and that the Supreme Court's decision in B. Des Raj Vs. CIT supported their claim for Section 80HHC. The assessee also argued that the ITAT's findings were perverse and based on irrelevant considerations. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80IA,Section 80HHC

AI-generated summary — verify with the full judgment below

(1) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH DATE OF DECISION: 21.8.2009 M/s Liberty Shoes Ltd., through Shri Shammi Bansal ..........Appellant S/o Shri Raj Kumar Bansal, Director, Liberty Puram, G.T., Road, Karnal, Haryana. Versus CIT, Aayakar Bhawan, Karnal ..........Respondent 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.

The assessee has preferred this appeal under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order of Income Tax Appellate Tribunal, Delhi Bench 'I' dated 16.11.2007 passed in ITA No. 3926/DEL/2005 for the assessment year 2003-04, proposing to raise following substantial questions of law:- 1. “That the ITAT was justified in law in holding that appellant was not entitled to the deduction u/s 80IA in respect of profits and gains arising on account of DEPB and Premium on sale of Import License which is intrinsically related/connected to the business profits of the industrial undertaking?

2.

That the Income Tax Appellate Tribunal was justified in denying the claims of the appellant u/s 80IA of the (2) 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.

3.

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 duty drawback and sale of replenishment licenses to the appellant which is against the latest judgment of the Apex Court in the case of B. Des Raj Vs. CIT (SC).”

4.

Whether, on the facts and circumstances of the case, the findings of ITAT are perverse and against the evidences on record thus unsustainable in law.”

5.

Whether the ITAT has misdirected itself in being influenced by irrelevant factors and applying erroneous criteria while deciding the issue of eligibility for claiming deduction under section 80IA of the Income Tax Act, 1961.”

2.

Learned counsel for the assessee does not dispute that the matter is covered against the assessee by 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).

3.

Accordingly, the appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE August 21, 2009

(DAYA CHAUDHARY) pooja JUDGE Note:-Whether this case is to be referred to the Reporter .......Yes/No (3)

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