C I T vs. M/S SHEENA INDUS.

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No. 917 of 2008 DATE OF DECISION : 23.11.2009 Commissioner of Income-tax .... APPELLANT Versus M/s Sheena Industries, Ujha Road, Panipat ..... RESPONDENT

CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTAL HON'BLE MR. JUSTICE MEHINDER SINGH SULLAR

Present: Mr. K.K. Mehta, Advocate, for the appellant-revenue.

* * * SATISH KUMAR MITTAL , J. The revenue has filed this appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as `the Act'), against the order dated 31.8.2007, passed by the Income Tax Appellate Tribunal, Delhi Bench, `I', New Delhi (hereinafter referred to as `the ITAT') in ITA No. 1228/Del/2006, pertaining to the assessment years 2002-03, raising the following substantial questions of law :- “Whether on the facts and in the circumstances of the case, learned ITAT was right in law in upholding the order of the CIT (A), directing the A.O to allow deduction u/s 80 HHC on export incentives, received by the assessee, as a supporting manufacturer in the same manner, as in the case of direct exporter?”

-2- In the present case, the assessee is a partnership firm deriving income from the manufacturing and sale of textile goods to M/s IKEA Trading (India) Ltd., (an Export/Trading House) as supporting manufacturer. In the assessment framed under Section 143 (3) of the Act, the Assessing Officer did not accept the contention of the assessee for computing deduction allowable to him under Section 80 HHC of the Act as per the provision of Section 80 HHC (1A) read with Section 80 HHC (3A) read with clause (baa) of explanation of Section 80 HHC of the Act, as the respondent is a supporting manufacturer, and allowed deduction of Rs.1,40,49,120/- under Section 80 HHC of the Act, instead of Rs.7,19,78,869/-, as claimed by the assessee. On appeal by the assessee, the Commissioner of Income Tax (Appeals), Karnal, set aside the order of the Assessing Officer and held that the assessee was entitled to the deduction under Section 80 HHC of the Act, as supporting manufacturer in the same manner, as in the case of direct exporter. The said decision of the CIT (A) has been upheld by the ITAT vide order dated 31.8.2007, against which the instant appeal has been filed, raising the aforesaid substantial question of law. After hearing counsel for the appellant, we find that in ITA No. 296 of 2008, filed by the revenue, the similar substantial question of law was raised to the following effect : “Whether on the facts and in the circumstances of the case, the Ld. ITAT was right in law in upholding the -3- order of the CIT (A), directing the Assessing Officer to allow deduction under section 80 HHC to the assessee who is a supporting manufacturer in the same manner, as in the case of direct exporter, treating the supporting manufacturer at par with direct exporter and ignoring the provisions of Section 80 HHC (1A) read with Section 80 HHC (3A) read with clause (baa) of explanation to Section 80 HHC of the Act?” The aforesaid appeal was dismissed by this Court, while relying upon the judgment of the Supreme Court in Commissioner of Income Tax, Thiruvanantapuram v. Baby Marine Exports (2007) 290 ITR 323 (SC), and upheld the claim of the assessee under Section 80 HHC of the Act as a supporting manufacturer at par with the direct exporter. This fact has not been disputed by learned counsel for the appellant. In view of the above, no substantial question of law survives for our determination. Thus, we do not find any merit in this appeal and the same is, hereby, dismissed. ( SATISH KUMAR MITTAL ) JUDGE November 23, 2009 ( MEHINDER SINGH SULLAR ) ndj JUDGE