THE COMMISSIONER OF INCOME TAXVALSAD vs. ECOPLAST LIMITED

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TAXAP/1053/2007HC GujaratGJHC24040938200719 December 2014Author: HONOURABLE MR. JUSTICE KS JHAVERI,HONOURABLE MR. JUSTICE K.J.THAKER4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that both questions of law were to be answered in favour of the assessee and against the Revenue. The Court relied on its previous decisions in Tax Appeal No. 1052 of 2007, which in turn relied on a decision in Tax Appeal No. 884 of 2006 and allied matters for the first question, and a decision in CIT Vs. Priyanka Gems ([2014] 367 ITR 567) for the second question. The reasoning was that these prior judgments had already settled the issues against the Revenue. The appeal was dismissed accordingly, with no order as to costs. The specific findings of the Tribunal on these issues are not detailed, but the High Court affirmed the Tribunal's stance.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Valsad (Revenue) against the judgment and order of the Income Tax Appellate Tribunal (Tribunal). The Tribunal had dismissed the appeal preferred by the Revenue. The High Court admitted the matter and framed substantial questions of law. The assessee is Ecoplast Limited. The assessment years are not explicitly stated but the context implies they are related to the period under consideration for the deduction under Section 80HHC.

What were the issues?

1. Whether, on the facts and in law, the Appellate Tribunal was right in holding that excise duty and sales tax would not be included in the total turnover while calculating the deduction under Section 80HHC of the Income Tax Act? 2. Whether, on the facts and in law, the Appellate Tribunal was right in directing not to exclude the amount of Rs. 1,92,880, representing exchange rate difference relating to export sales of earlier years, from the profits eligible for deduction under Section 80HHC? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: Not recorded in the judgment, beyond framing the questions of law.

Which sections of the Income-tax Act were involved?

Section 80HHC

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
O/TAXAP/1053/2007 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL  NO. 1053 of 2007   FOR APPROVAL AND SIGNATURE:  HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ==================================== 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? ==================================== THE COMMISSIONER OF INCOME TAX VALSAD....Appellant(s) Versus ECOPLAST LIMITED....Opponent(s) ==================================== Appearance: MR SUDHIR M MEHTA, ADVOCATE for the Appellant(s) No. 1 MRS SWATI SOPARKAR, ADVOCATE for the Opponent(s) No. 1 ==================================== CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER   Page 1 of 4 O/TAXAP/1053/2007 JUDGMENT Date : 19/12/2014

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI)

1.

By   way   of   this   appeal,   the   department   has   challenged   the judgment and order of the Tribunal, whereby, the Tribunal has dismissed the appeal preferred by the revenue.  While admitting the matter, this Court has framed following substantial questions of law:

“1. Whether on the facts and circumstances of the case and in law was the Appellate Tribunal right in holding that the excise duty and sales will not be included in the total turnover while calculating the deduction u/s. 80HHC of the Act?

2.

Whether on the facts and circumstances of the case and in law was the Appellate Tribunal right in directing not to exclude the amounts of Rs.1,92,880/­ being exchange rate difference relating to export sales of earlier years from the profits eligible for deduction u/s.80HHC?”

2.

The questions of law raised in this appeal had come up for consideration before this Court in Tax Appeal No. 1052 of 2007. This   Court,   while   deciding   the   said   identical   case   by   order O/TAXAP/1053/2007 JUDGMENT 18/03/2014, relying on a decision of this Court in Tax Appeal [2014]  367  ITR   567  in   Tax   Appeal   No.   1355   of   2005  qua question No. 2, has observed in paragraph Nos. 2 and 3 as under:

“2. It   is   an   agreed   position   that   question   1   is answered against the Revenue by  judgment of this Court rendered on December 03, 2013 in the case of Commissioner   of   Incometax v.   Pogagen   AMP Nagarsheth Powertronics Ltd. and others while dealing with Tax Appeal No.884 of 2006 and allied matters. Similarly,   the   question   2   is  answered   against   the Revenue and in favour of the assessee in a judgment in the case of CIT v. Priyanka Gems, decided on March 12, 2014 while dealing with Tax Appeal No.1355 of 2005. 3. In the result, both the questions are answered against the Revenue. Tax Appeal is dismissed.  There shall be, however, no order as to costs.”

3.

There is no dispute amongst both the learned counsels that the aforesaid decision will apply in the facts of this case also, as the facts and the questions of law raised, are identical and therefore, O/TAXAP/1053/2007 JUDGMENT we are not giving elaborate reasons.

4.

Accordingly, we answer the questions, “Whether on the facts and circumstances of the case and in law was the Appellate Tribunal right in holding that the excise duty and sales will not be included in the total turnover while calculating the deduction u/s. 80HHC of the Act?” and “Whether on the facts and circumstances of the case and in law was the Appellate Tribunal right in directing not to exclude   the   amounts   of   Rs.1,92,880/­   being   exchange   rate difference relating to export sales of earlier years from the profits eligible for deduction u/s.80HHC?”, in favour of the assessee and against   the   department.     The   appeal   stands   dismissed accordingly. [ K. S. Jhaveri, J. ] [ K. J. Thaker, J. ] hiren

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