M/S PARAMOUNT IMPEX THROUGH ITS PARTNER vs. C.I.T. RISHI NAGAR, AAYAKAR BHAWAN, LUDHIANA

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ITA/307/2007HC Punjab & HaryanaPHHC01072999200720 September 2007Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE M.M. KUMAR3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for determination, warranting the admission of the appeal. The Court found that the matter was not res integra, having already decided similar issues in previous appeals, specifically I.T.A. Nos. 278 and 279 of 2007 (M/s Arisudana Spinning Mills Ltd. v. CIT) and I.T.A. No. 301 of 2007 (M/s Jawand Sons v. CIT, Ludhiana). The Tribunal had rightly allowed the revenue's appeal by following the law laid down by the Supreme Court in CIT v. Sterling Foods, (1999) 237 ITR 579, which was deemed fully applicable. Therefore, the High Court found no ground to interfere with the Tribunal's view. The appeal was dismissed as wholly without merit. No issues were expressly left undecided.

What were the facts?

The assessee, M/s Paramount Impex, filed an appeal under Section 260A of the Income-tax Act, 1961, against an order dated May 17, 2007, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh 'A' Bench. The appeal pertains to the assessment year 2003-04. The core of the dispute revolves around the assessee's claim for deduction under Section 80IB of the Act in respect of profits and gains arising from duty drawback. The ITAT had previously allowed the appeal filed by the revenue, setting aside the assessee's claim. The High Court was presented with the substantial questions of law arising from the ITAT's order.

What were the issues?

The High Court was asked to decide the following substantial questions of law: 1. Whether, on the facts and circumstances, the ITAT was justified in law in holding that the appellant was not entitled to deduction under Section 80IB in respect of profits and gains arising from duty drawback, which is intrinsically related/connected to the business profits of the industrial undertaking? 2. Whether, on the facts and in the circumstances, the ITAT was justified in denying the claims under Section 80IB by relying on judgments like Liberty India, which the appellant contended were distinguishable on facts? 3. Whether, on the facts and circumstances, the findings of the ITAT are perverse and against the evidence on record, thus unsustainable in law? 4. Whether the ITAT misdirected itself by being influenced by irrelevant factors and applying erroneous criteria while deciding the eligibility for deduction under Section 80IB? The assessee argued that duty drawback is intrinsically linked to business profits and should be eligible for deduction under Section 80IB. They also contended that the ITAT's reliance on certain judgments was misplaced due to factual distinctions. The revenue's contentions are not explicitly recorded, but the ITAT's decision in favour of the revenue implies they argued against the allowability of the deduction. The High Court noted that the matter was not res integra and relied on previous judgments.

Which sections of the Income-tax Act were involved?

Section 80IB,Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH DATE OF DECISION: 20.9.2007 M/s Paramount Impex …Appellant Versus C.I.T., Ludhiana …Respondent CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present: Mr. S.K. Mukhi, Advocate, for the appellant-assessee. M.M. KUMAR, J.

This is assessee’s appeal under Section 260A of the Income-tax Act, 1961 (for brevity, ‘the Act’), against order dated 17.5.2007, passed by the Income Tax Appellate Tribunal, Chandigarh ‘A’ Bench, Chandigarh (for brevity, ‘the Tribunal), in I.T.A. No. 467/Chandi/2006, in respect of assessment year 2003-04. It is claimed that the following substantial questions of law would arise for determination of this Court:- I.

Whether, on the facts and circumstances of the case, 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 which is intrinsically related/connected to the business profits of the industrial undertaking? II.

Whether on the facts and in the circumstances of the case 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 Court in the case of Liberty India and other judgments which are distinguishable on facts itself? III.

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? IV.

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? After hearing learned counsel for the assessee-appellant and perusing the record, we are of the considered view that no question of law, much less a substantive question of law warranting admission of the appeal would arise, inasmuch as, the matter is not res integra. We have already rejected appeals bearing I.T.A. Nos. 278 and 279 of 2007 in the case of M/s Arisudana Spinning Mills Ltd. v. CIT, decided on 31.7.2007 as well as I.T.A. No. 301 of 2007 in the case of M/s Jawand Sons v. CIT, Ludhiana, decided on 17.9.2007, wherein similar questions of law were raised. The Tribunal has rightly allowed the appeal filed by the revenue by following the law laid down by Hon’ble the Supreme Court in the case of CIT v. Sterling Foods, (1999) 237 ITR 579, which is fully applicable to the instant appeal. Therefore, we do not find any ground to interfere with the view taken by the Tribunal.

In view of the above, this appeal is wholly without merit.

Dismissed. (M.M. KUMAR) JUDGE (AJAY KUMAR MITTAL)

September 20, 2007 JUDGE Pkapoor 3

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