COMMISSIONER OF INCOME TAX vs. AJANTA ELECTRONICS PVT. LTD.

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TAXAP/1398/2005HC GujaratGJHC24034793200511 July 2008Author: HONOURABLE MR. JUSTICE K.A.PUJ,HONOURABLE MR. JUSTICE RAJESH H.SHUKLA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court declined to formulate Question A as it was already concluded by the decision of the Apex Court in CIT v. Lakshmi Machine Works, which held that sales tax and excise duty cannot form part of the total turnover under Section 80HHC(3). The Court also declined to formulate Question B, stating that the Tribunal had only remanded the matter back for fresh consideration in light of the pronouncements of the Hon'ble Apex Court in the cases of Pandian Chemicals Ltd. and Sterling Foods. The Court expressed confidence that the Assessing Officer would decide the issue afresh based on these Supreme Court decisions. The appeal was accordingly dismissed.

What were the facts?

The Revenue filed an appeal against the order of the Income Tax Appellate Tribunal (ITAT), Rajkot Bench, for Assessment Year 1998-99. The appeal challenged two issues: whether sales tax and excise duty could be included in the total turnover for Section 80HHC purposes, and whether the ITAT was correct in remanding the issue of interest income computation for Section 80HHC deduction. The assessee, Ajanta Electronics Pvt. Ltd., contended that the appeal should not be admitted as one issue was already settled by the Supreme Court and the other concerned a remand order.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in holding that sales tax and excise duty cannot be included in working out total turnover for the purpose of Section 80HHC? (Question of law) 2. Whether the Appellate Tribunal is right in law and on facts in remanding the issue relating to computation of deduction under Section 80HHC of the Act with reference to interest income, particularly when the provisions of the said section are clear and unambiguous? (Question of law) Assessee's contentions: The appeal should not be admitted as Question A is concluded by the Supreme Court's decision, and Question B is framed only against a remand order. Revenue's contentions: For Question A, the ITAT's decision that sales tax and excise duty cannot be included in total turnover for Section 80HHC is challenged. For Question B, the Revenue argued that since the issue of interest income computation for Section 80HHC deduction was settled by pronouncements of the Apex Court, it should not have been remanded to the Assessing Officer for fresh decision. The Revenue relied on CIT v. Lakshmi Machine Works (290 ITR 667), Pandian Chemicals Ltd. v. CIT (262 ITR 278), and CIT v. Sterling Foods (237 ITR 579).

Which sections of the Income-tax Act were involved?

Section 80HHC,Section 260A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
TAXAP/1398/2005 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 1398 of 2005 For Approval and Signature:  HONOURABLE MR.JUSTICE K.A.PUJ  HONOURABLE MR.JUSTICE R.H.SHUKLA  ====================================== 1 Whether Reporters of Local Papers may be allowed  to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of  the judgment ? 4 Whether this case involves a substantial question of  law as to the interpretation of the constitution of  India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ====================================== COMMISSIONER OF INCOME TAX ­ Appellant(s) Versus AJANTA ELECTRONICS PVT. LTD. ­ Opponent(s) ====================================== ===================  Appearance : MR MANISH R BHATT for Appellant(s) : 1, MR RK PATEL with MR BD KARIA for Opponent(s) : 1, ====================================== CORAM :  HONOURABLE MR.JUSTICE K.A.PUJ and HONOURABLE MR.JUSTICE R.H.SHUKLA Date : 11/07/2008  TAXAP/1398/2005 2/3

JUDGMENT ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE R.H.SHUKLA) The Revenue has filed this appeal under sec. 260A of the Income­ tax Act, 1961 for the Assessment Year 1998­99 formulating the following two questions of law for determination of this court   arising from the order passed by the Income Tax Appellate Tribunal, Rajkot Bench in ITA No. 598/Rjt/2003 dated 13.6.2005: “A. Whether the Appellate Tribunal is right in law and on facts in holding   that   sales   tax   and   excise   duty   cannot   be   included   in working out total turnover for the purpose of Sec. 80HHC? B. Whether the Appellate Tribunal is right in law and on facts in remanding  the  issue   relating   to  computation   of  deduction  u/s 80HHC of the Act with reference to interest income, particularly when   the   provisions   of   the   said   section   are   clear   and unambiguous?”

2.

Question No. A proposed by the Revenue is squarely covered in light of the decision of the Hon'ble Apex Court in the case of  CIT v. Lakshmi Machine Works reported in 290 ITR 667. The issue has been decided holding that the sales tax and excise duty cannot form part of the total turnover under sec. 80HHC(3).

3.

So   far   as   Question   No.   B   is   concerned,   Learned  Sr.   Standing Counsel Mr. M.R. Bhatt for the Revenue, referring to the judgment in the case of Pandian Chemicals Ltd. v. CIT, reported in 262 ITR 278 and in the case of CIT v. Sterling Foods, reported in 237 ITR 579, submitted that since the issue has been decided and settled by the pronouncement

TAXAP/1398/2005 3/3 JUDGMENT of   Hon'ble   Apex   Court,   it   should   not   have   been   remanded   to   the Assessing Officer for fresh decision by the Tribunal.

4.

Learned advocate Mr. B.D. Karia for the respondent­assessee has submitted that the appeal should not be admitted as the Question A is concluded by the decision of the Hon'ble Apex Court and the Question B is framed only against remand order.

5.

As   the   Tribunal   has   only   remanded   the   matter   back   for consideration of the issue afresh in light of the pronouncement of the Hon'ble Apex Court, we do not deem it expedient to interfere and, therefore, we are not formulating the Question No. B. We are sure that the Assessing Officer shall decide the issue afresh in light of the decision of the Hon'ble Supreme Court in the cases of Pandian Chemicals Ltd. (supra) and Sterling Foods (supra).

6.

We,  accordingly,  decline to  formulate Question No. A as it  is already concluded by the decision of the Apex Court and decline to formulate Question No. B as the issue is remanded back to the  Assessing Officer for fresh consideration in light of the decision of the Hon'ble Supreme Court in the cases of Pandian Chemicals (supra) and Sterling Foods (supra). The appeal stands dismissed accordingly with no order as to costs. (K.A. Puj, J.) (R.H. Shukla, J.) (hn)

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