TEXTILE WORLD vs. C I T

ITA/482/2007HC Punjab & HaryanaPHHC01073185200716 December 2008Author: MR. JUSTICE L.N. MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What were the facts?

The assessee, Textile World, filed an appeal under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Delhi Bench ‘I’, New Delhi, dated June 6, 2007. The appeal pertains to the assessment year 2003-04. The core of the dispute revolves around the eligibility of duty drawback and Duty Entitlement Pass Book (DEPB) scheme receipts for claim under specific provisions of the Income Tax Act. The High Court of Punjab and Haryana at Chandigarh heard the appeal. The amount in dispute is not explicitly stated.

What did the High Court hold?

The High Court held that the appeal was covered against the assessee by its own prior order dated October 16, 2008, in I.T.A. No. 100 of 2008, Abhitex International v. Commissioner of Income Tax, Karnal. Consequently, the High Court dismissed the appeal. The reasoning behind the dismissal is solely based on the precedent set by the earlier judgment of the same High Court on a similar matter. The specific findings on each of the questions A through E, as framed by the assessee, were not elaborated upon in this order, as the appeal was disposed of on the basis of the binding precedent. The ratio decidendi is that if a matter is covered by a prior judgment of the same court, it will be decided accordingly. No issue was expressly left undecided; the appeal was dismissed outright.

What were the issues?

The Tribunal had to decide the following questions of law: 1. Whether duty drawback received is an amount derived and eligible for claim under Section 28(iiic) of the Income Tax Act, 1961, despite the repeal of the Customs and Central Excise Duties Drawback Rules, 1971? (Question A) 2. Whether Duty Entitlement Pass Book (DEPB) scheme receipts are an amount derived and eligible for claim under Section 28(iiid) of the Income Tax Act, 1961? (Question B) 3. Whether the interpretation of the word 'derived' can be broader than that laid down in CIT Vs. Sterling Foods, 237 (1999) ITR 579 (SC), by referring to judgments like State of West Bengal Vs. Anwar Ali, AIR 1952 (SC) 75 and Katikara Chintamani Dora Vs. Guntreddi Anna Manaidu, 1974 (1) SCC 567? (Question C) 4. Whether the executive action denying the claim of duty drawback, which has a direct nexus and is germane to the business, is sustainable, as per the judgments in Union of India Vs. Rajindra Dyeing and Printing Mills Ltd., 2005(180) ELT 433 (SC) and Sun Industries, 1988 (35) ELT 241 (SC)? (Question D) 5. Whether the duty drawback received by the appellant is derived from an industrial undertaking in its true sense and spirit? (Question E) The assessee contended that duty drawback and DEPB receipts are derived from business and eligible for deduction. The revenue's contentions are not explicitly recorded, but their stance would be against the assessee's claims. The assessee relied on various Supreme Court judgments for a broader interpretation of 'derived' and the nexus of duty drawback to business.

Which sections of the Income-tax Act were involved?

Section 260A,Section 28(iiic),Section 28(iiid)

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.482 of 2007 Date of decision: 16.12.2008 Textile World. -----Appellant Vs. Commissioner of Income Tax, Karnal. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N. MITTAL Present:- Mr. Pankaj Jain, Advocate for the appellant. -----

ORDER:

The assessee has preferred this appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Delhi Bench ‘I’, New Delhi in I.T.A. No.3970/DEL/2005 dated 6.6.2007 for the assessment year 2003-04, proposing to raise following questions of law:- “A. Whether Duty Draw back received is an amount derived and eligible for claim per section 28 (iiic) though the Customs and Central Excise Duties Drawback Rules, 1971 stands repealed? B. Whether the Duty Entitlement Pass Book Scheme received is an amount derived and eligible for claim per section 28 (iiid)? Bengal Vs. Anwar Ali, AIR 1952 (SC

The order continues below.

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