COMMISSIONER OF INCOME TAX vs. ROLCON ENGG. CO.LTD.

ITR/236/1994HC GujaratGJHC24020312199407 December 2005Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI6 pages
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What were the facts?

The Income Tax Appellate Tribunal (ITAT) referred two questions of law to the Gujarat High Court concerning the assessment year 1986-87. The assessee, Rolcon Engg. Co. Ltd., claimed an export development allowance under Section 80HHC of Rs. 94,100. The Assessing Officer reduced this claim to Rs. 12,100 by considering losses from some of the assessee's units. This decision was upheld by the CIT (Appeals). The assessee appealed to the ITAT, which allowed the full claim. The Commissioner of Income-tax (Revenue) challenged the ITAT's order before the High Court.

What did the High Court hold?

The High Court held that the Tribunal had correctly applied the provisions of Section 80HHC of the Act as they were in force for the relevant assessment year. The Tribunal had considered the parameters outlined in Section 80HHC(3)(b), which include profits and gains of business, export turnover, and total turnover, particularly for businesses not exclusively engaged in exports. The Tribunal had found the assessee's working based on these parameters to be correct. The Court noted that the departmental representative had nothing further to submit beyond relying on lower authorities' orders. Regarding the alternative plea for remand, the Court found that the Tribunal had already examined the working and found it correct, thus rendering the alternative plea unacceptable. Consequently, both questions were answered in the affirmative, in favour of the assessee and against the Revenue. The reference was disposed of accordingly.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that, while computing the export development allowance under Section 80HHC, the total sales, export sales, and net profit should be taken into consideration as per para-5 of the Tribunal's order, and the allowance should be computed at Rs. 94,510/- instead of Rs. 12,100/-? (Question of law) 2. Whether the Tribunal is right in holding that in working out the export development allowance under Section 80HHC, the Assessing Officer was not right in taking into consideration the loss of some of the units of the assessee? (Question of law) Assessee's Contentions: The assessee argued that its claim was based on the parameters laid down in Section 80HHC(3)(b) of the Act, and its working was correct. The Tribunal found the assessee's working correct. Revenue's Contentions: The Revenue contended that the Tribunal erred in granting relief and relied on the Supreme Court decision in IPCA Laboratory Ltd. Vs. Deputy Commissioner of Income-tax. When informed that the cited provision was not applicable for the relevant assessment year, the Revenue alternatively argued, based on Section 80HHC(3)(b), that the matter might be remanded for re-computation.

Which sections of the Income-tax Act were involved?

Section 80HHC,Section 256(1),Section 80HHC(3)(b)

AI-generated summary — verify with the full judgment below

ITR/236/1994 1/6 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No.236 of 1994 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MS.JUSTICE H.N.DEVANI ===================================================== 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 - Applicant(s) Versus ROLCON ENGG. CO.LTD. - Respondent(s) ===================================================== Appearance : MR MANISH R BHATT for Applicant(s) : 1, SERVED BY RPAD - (N) for Respondent(s) : 1, ===================================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 07/12/2005 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA)

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