NEXO INDUSTRIES PVT. LTD. vs. COMMISSIONER OF INCOME TAX, LUDHIANA

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ITA/994/2008HC Punjab & HaryanaPHHC01081041200829 April 2014Author: MR. JUSTICE TAPEN SEN,MR. JUSTICE A.S. GARG3 pages
AI SummaryRemanded

What did the High Court hold?

Regarding the first issue concerning Section 80HHC and DEPB, the High Court noted that both parties agreed the issue was covered by the Supreme Court judgment in Topman Exports v. Commissioner of Income Tax (2012). Consequently, the matter was remanded back to the Assessing Officer to decide afresh in accordance with law, following the Topman Exports decision. For the second issue concerning Section 80IB and DEPB, the High Court found that the issue stood concluded against the assessee in view of the Supreme Court judgment in Liberty India v. Commissioner of Income Tax [2009] 317 ITR 218 (SC). The appeal was disposed of in light of these decisions.

What were the facts?

The assessee, Nexo Industries Pvt. Ltd., engaged in manufacturing and exporting fasteners, filed its return for assessment year 2004-05 declaring an income of ` 4,17,22,640/-. The Assessing Officer framed the assessment at ` 5,29,36,755/-. The Commissioner of Income Tax (Appeals) partly allowed the assessee's appeal. Both the assessee and the revenue appealed to the Income Tax Appellate Tribunal (ITAT). The ITAT, by its order dated 3.6.2008, dismissed the assessee's appeal. The assessee then filed an appeal before the High Court of Punjab and Haryana under Section 260A of the Income Tax Act, 1961.

What were the issues?

1. Whether the Tribunal's order is sustainable in declining the claim of DEPB (Duty Exemption Passbook) in light of the provision of Section 80HHC of the Income Tax Act, 1961? The assessee contended that DEPB benefits should be eligible for deduction under Section 80HHC. The revenue's contentions are not recorded. 2. Whether the amount of DEPB is derived from and eligible for claim under Section 80IB of the Income Tax Act, 1961? The assessee sought to claim DEPB benefits under Section 80IB. The revenue's contentions are not recorded. The High Court noted that both questions were substantial questions of law.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80HHC,Section 80IB

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 994 of 2008 (O&M) Date of Decision: 29.4.2014 Nexo Industries Pvt. Ltd. ....Appellant. Versus Commissioner of Income Tax, Ludhiana ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE JASPAL SINGH. PRESENT: Mr. S.K. Mukhi, Advocate for the appellant. Ms. Savita Saxena, Advocate for the respondent. AJAY KUMAR MITTAL, J.

1.

This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against the order dated 3.6.2.2008 passed by the Income Tax Appellate Tribunal, Chandigarh Bench “B”, Chandigarh (hereinafter referred to as “the Tribunal”) in ITA No. 225/CHD/2008 for the assessment year 2004-05, claiming the following substantial questions of law:- I. Whether the Tribunal order is sustainable on the true and correct interpretation of the provision of section 80HHC in declining the claim of DEPB? II. Whether amount of DEPB is derived from and eligible for claim on the true and correct Singh Gurbachan 2014.05.28 11:00 I attest to the accuracy and integrity of this document High Court Chandigarh -2- interpretation of Section 80IB of the Income Tax Act, 1961?

2.

Briefly stated, the facts as narrated in the instant appeal are that the assessee is engaged in the business of manufacturing of fasteners and exporting goods. The assessee filed its return on 1.11.2004 declaring an income of ` 4,17,22,640/-. The case of the assessee was taken up for scrutiny. The assessment was framed vide order dated 28.12.2006 (Annexure A-1) at an amount of ` 5,29,36,755/-. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who vide order dated 11.1.2008 (Annexure A-2) partly allowed the appeal. Against the order dated 11.1.2008 (Annexure A-2), the assessee as well as the revenue filed appeals before the Tribunal. The Tribunal vide order dated 3.6.2008 (Annexure A-3) dismissed the appeal of the assessee. Hence, the present Income Tax Appeal.

3.

We have heard learned counsel for the parties.

4.

Learned counsel for the parties are agreed that question No. (I) is covered by the judgment of the Hon'ble Supreme Court in Topman Exports v. Commissioner of Income Tax, (2012) 67 DTR Judgments

185.

In view of the above, qua question No.(I), the matter is remanded back to the Assessing Officer to decide afresh in accordance with law in view of the judgment of the Hon'ble Supreme Court in Topman Exports's case (supra).

5.

Regarding question No. (II), it was not disputed that the issue stands concluded against the assessee in view of the judgment of the Hon'ble Supreme Court in Liberty India v. Commissioner of Income Tax [2009] 317 ITR 218 (SC). Answered accordingly against the Singh Gurbachan 2014.05.28 11:00 I attest to the accuracy and integrity of this document High Court Chandigarh -3- assessee.

6.

In view of the above, the appeal stands disposed of in the manner indicated above. (AJAY KUMAR MITTAL) JUDGE April 29, 2014

(JASPAL SINGH) gbs JUDGE Singh Gurbachan 2014.05.28 11:00 I attest to the accuracy and integrity of this document High Court Chandigarh

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