M/S ACCENT FOR LIVING THROUGH ASHOK RAJ NATH vs. C.I.T., AAYAKAR BHAWAN, KARNAL

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ITA/721/2008HC Punjab & HaryanaPHHC01080741200822 December 2008Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE L.N. MITTAL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the view taken by the Tribunal in disallowing the claim of the assessee in respect of duty drawback was in accordance with the view already taken by the High Court. The Court found itself unable to hold that any substantial question of law arose for consideration. Consequently, the appeal filed by the assessee was dismissed. The reasoning for dismissing the appeal was based on the established precedent of the High Court regarding the disallowance of duty drawback income from Section 80IB deduction. The Court did not delve into the other issues raised by the assessee, as the primary ground for dismissal was the lack of a substantial question of law, stemming from existing High Court pronouncements on similar matters. The ratio decidendi is that if a matter has already been decided by the High Court, and the Tribunal's order aligns with that decision, then no substantial question of law arises for further appeal.

What were the facts?

The assessee, M/s Accent for Living, filed an appeal before the High Court of Punjab and Haryana against an order dated May 9, 2008, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The appeal pertains to Assessment Year 2002-03. The assessee had claimed deductions under Section 80IB of the Income Tax Act, 1961, for income arising from duty drawback, sale of replenishment licenses, and currency fluctuation. These claims were disallowed by the Assessing Officer and subsequently upheld by the ITAT. The assessee also made a similar claim under Section 80HHC, which was also disallowed. The ITAT relied on judgments in CIT v. Sterling Foods and Liberty India v. CIT. The High Court heard the counsel for the appellant.

What were the issues?

1. Whether the ITAT was justified in holding that the appellant was not entitled to deduction under Section 80IB in respect of profits and gains arising from duty drawback, sale of replenishment licenses, and currency fluctuation, 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 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 Supreme Court judgment in B.Des Raj Vs. CIT(SC)? 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 80IB? Assessee's Contentions: The assessee argued that the income from duty drawback, sale of replenishment licenses, and currency fluctuation were intrinsically related to the business profits of the industrial undertaking and thus eligible for deduction under Section 80IB. They also contended that the ITAT's reliance on Liberty India was misplaced as the facts were distinguishable. Furthermore, the assessee argued that deduction under Section 80HHC was available on duty drawback and sale of replenishment licenses, citing the Supreme Court judgment in B.Des Raj Vs. CIT(SC). The assessee also argued that the ITAT's findings were perverse and influenced by irrelevant factors. Revenue's Contentions: The judgment does not record specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 80IB,Section 80HHC,Section 260A

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.721 of 2008 Date of decision: 22.12.2008 M/s Accent for Living. -----Appellant Vs. Commissioner of Income Tax. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N. MITTAL Present:- Mr. Rajiv Sharma, Advocate for Mr. S.K. Mukhi, Advocate for the appellant. -----

ORDER:

This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order dated 9.5.2008 passed by Income Tax Appellate Tribunal, Chandigarh “A” Bench in I.T.A. No.1032 /(DEL) of 2006 for the assessment year 2002-03, proposing to raise following substantial questions of law:- “I. Whether 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, sale of replenishment licences and currency fluctuation which is intrinsically 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 80 HHC 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).” IV. Whether, on the facts and circumstances of the case, the findings of the ITAT are perverse and against the evidences on record thus unsustainable in law.” V. 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 80IB of the Income Tax Act, 1961” The assessee claimed deduction in respect of income from duty drawback under Section 80IB of the Act, on sale of replenishment licence and currency fluctuation. The same was disallowed on the ground that the said income was not income derived from business undertaking. Similar claim for deduction under Section 80 HHC of the Act was also made, which was also disallowed. Reliance was placed on judgment of the Hon’ble Supreme Court in CIT v. Sterling Foods. 237 ITR 579 and judgment of this Court in Liberty India v. CIT (2007) 293 ITR 520. The view of the Assessing Officer was upheld by the Tribunal.

We have heard learned counsel for the appellant.

It is not disputed that the view taken by the Tribunal, disallowing the claim of the assessee in respect of duty drawback is in accordance with the view already taken by this Court.

We are unable to hold that any substantial question of law arises for consideration.

The appeal is dismissed. ( ADARSH KUMAR GOEL ) JUDGE December 22, 2008 ( L. N. MITTAL ) ashwani JUDGE 3

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