INDUSTRIAL CABLES (INDIA) LTD.RAJPURA. vs. C.I.T.PATIALA

ITR/145/1989HC Punjab & HaryanaPHHC01022517198927 October 2009Author: MR. JUSTICE GURDEV SINGH,MR. JUSTICE ADARSH KUMAR GOEL3 pages
AI SummaryDismissed

What were the facts?

This case concerns an Income Tax Reference (ITR) filed by Industrial Cables (India) Limited, Rajpura (the assessee) against the Commissioner of Income Tax, Patiala (the revenue). The reference arises from an order dated April 22, 1988, passed by the Income-tax Appellate Tribunal (ITAT), Chandigarh Bench, in cross-appeals and cross-objections pertaining to the assessment year 1979-80. The ITAT's order is under challenge. The High Court of Punjab and Haryana is asked to decide two questions of law referred at the instance of the assessee. The revenue did not present any arguments before the High Court.

What did the High Court hold?

The High Court, in its decision dated October 27, 2009, disposed of the reference by answering both questions in favour of the revenue and against the assessee. The Court relied on the judgment of a Full Bench of the same High Court in Commissioner of Income-Tax Versus Roadmaster Industries of India (P.) Limited, [2009] 315 ITR 66 (P&H). While the specific reasoning of the ITAT on each issue is not detailed in this High Court order, the High Court's decision implies that it concurred with the ITAT's findings that ocean freight was not eligible for weighted deduction under Section 35B(1)(b)(viii) and that the sale of import entitlements was a taxable revenue receipt. The operative direction was to dispose of the reference accordingly, meaning the ITAT's order on these points was upheld.

What were the issues?

The High Court was asked to decide two questions of law: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that no weighted deduction under Section 35B(1)(b)(viii) of the Income Tax Act, 1961, is admissible on account of ocean freight? 2. Whether, on the facts and in the circumstances of the cases, the Tribunal was right in law in holding that the amount of Rs. 31,56,238/- on account of sale of import entitlements represented receipts liable to income-tax and not capital receipt? Assessee's Contentions: The assessee sought to argue that weighted deduction under Section 35B(1)(b)(viii) should be allowed for ocean freight and that the sale of import entitlements constituted a capital receipt, not liable to income tax. Revenue's Contentions: No arguments were recorded for the revenue.

Which sections of the Income-tax Act were involved?

Section 35B

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
ITR No. 145 of 1989 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No. 145 of 1989 (O&M) Date of decision: October 27, 2009 Industrial Cables (India) Limited, Rajpura ...Appellant Versus The Commissioner of Income Tax, Patiala ...Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE GURDEV SINGH Present: Mr. Animesh Sharma, Advocate, for the assessee. None for the revenue.

ORDER At the instance of the assessee, the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh, has referred the following two questions of law arising out of its order dated 22nd April, 1988 in cross appeals being I.T.A. Nos. 222 & 305 and cross objection 39 of 1985 relating to the assessment year 1979-80, for the opinion of this Court:- “1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that no weighted deduction under Section 35B (1) (b) (viii) of the Income Tax Act, 1961 (for short 'the Act') is admissible on account of ocean freight ?

2.

Whether, on the facts and in the circumstances of the cases, the Tribunal was right in law in holding that the amount of Rs. 31,56,238/- on account of sale of i

The order continues below.

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