M/S DUGGAL EXPORTS vs. CIT LUDHIANA

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ITA/307/2009HC Punjab & HaryanaPHHC01084401200917 July 2009Author: MR. JUSTICE ADARSH KUMAR GOEL,MRS JUSTICE DAYA CHAUDHARY3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the assessee's counsel was unable to dispute that the matter was covered against the assessee by earlier judgments of this Court, specifically mentioning the judgment in I.T.A. No.629 of 2007, M/s Raj Overseas v. Commissioner of Income Tax, Karnal, decided on 9.9.2008. Consequently, the appeal was dismissed. The reasoning is based on the precedent established by this Court in similar cases, indicating that the ITAT's decision was in line with established legal principles. The specific findings on each of the five questions of law are not elaborated upon individually, but the overall dismissal implies that the ITAT's decision on the eligibility for deduction under Section 80IB and 80HHC in relation to duty drawback and DEPB was upheld. The ratio decidendi is that if a matter is covered by a binding precedent of the High Court, the appeal will be dismissed on that ground. No issues were expressly left undecided.

What were the facts?

The assessee, M/s Duggal Exports, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 26.11.2008 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The appeal pertains to the assessment year 2004-05. The assessee had claimed deduction under Section 80IB of the Act in respect of export incentives, which was disallowed by the Assessing Officer and upheld by the CIT(A) and the ITAT. The Assessing Officer relied on the Supreme Court judgment in C.I.T. v. Sterling Foods, while the CIT(A) referred to this Court's judgments in Liberty India v. Commissioner of Income Tax and Five Star Rugs v. Commissioner of Income Tax. The amount in dispute is not explicitly stated.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the appellant was entitled to deduction under Section 80IB in respect of profits and gains arising from duty drawback and premium on DEPB, which are intrinsically related to the business profits of the industrial undertaking. 2. Whether the ITAT was justified in denying the claims under Section 80IB by relying on judgments of this Hon'ble Court in Liberty India and other distinguishable judgments. 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 Apex Court judgment in B.Des Raj Vs. CIT. 4. Whether the findings of the ITAT were 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 80IB. Assessee's Contentions: The assessee argued that the duty drawback and DEPB premium are intrinsically related to the business profits and that the ITAT's reliance on Liberty India and other judgments was misplaced as they were distinguishable. The assessee also contended that deduction under Section 80HHC should be available on duty drawback and sale of replenishment licenses, citing the Apex Court judgment in B.Des Raj Vs. CIT. The assessee further argued that the ITAT's findings were perverse and influenced by irrelevant factors. Revenue's Contentions: No specific contentions for the revenue are recorded in the judgment, other than the implicit upholding of the ITAT's decision.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80IB,Section 80HHC

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.307 of 2009 (O&M) Date of decision: 17.7.2009 M/s Duggal Exports. -----Appellant. Vs. C.I.T., Ludhiana. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:- Mr. Rajiv Sharma, Advocate for the appellant. ---

ORDER:

1.

The assessee has preferred this appeal under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against order dated 26.11.2008 of the Income Tax Appellate Tribunal, Chandigarh “SMD” Bench in I.T.A. No.468/CHANDI/2008 for the assessment year 2004-05, proposing to raise following substantial questions of law:- “I. That the ITAT was justified in law in holding that appellant was not entitled to the deduction u/s 80IB in respect of profits and gains arising on account of duty drawback and premium on DEPB which is instrinsically related/connected to the business profits of the industrial undertaking. II. That the Income Tax Appellate Tribunal was justified in denying the claims of the appellant u/s 80IB 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 80IB of the Income Tax Act, 1961.”

2.

The assessee claimed deduction under Section 80IB of the Act in respect of export incentives, which was disallowed by the Assessing Officer, relying upon judgment of the Hon’ble Supreme Court in C.I.T. v. Sterling Foods (1999) 237 ITR 579. The CIT(A) upheld the said order, referring to judgments of this Court in Liberty India v. Commissioner of Income Tax (2007)

293 ITR 520 and Five Star Rugs v. Commissioner of Income Tax (2007) 293 ITR 553. The Tribunal upheld the same.

3.

Learned counsel for the appellant is unable to dispute that the matter is covered against him by earlier judgments of this Court including judgment in I.T.A. No.629 of 2007 M/s Raj Overseas v. Commissioner of Income Tax, Karnal decided on 9.9.2008. 4. Accordingly, this appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE July 17, 2009

( DAYA CHAUDHARY ) ashwani JUDGE 3

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