A.C.I.T. vs. NIRMA LTD.

O/TAXAP/535/2003 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 535 of 2003

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 ? ================================================================ A.C.I.T.....Appellant(s) Versus NIRMA LTD.....Opponent(s) ================================================================ Appearance: MRS MAUNA M BHATT, 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/535/2003 JUDGMENT

Date : 10/10/2014

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned judgment and order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench (hereinafter referred to as ITAT) dated 26.09.2001 in ITA No. 2453/Ahd/95 for the Assessment Year 1991- 92, the Asst. Commissioner of Income Tax has preferred the present Tax Appeal for consideration of the following substantial question of law: (a)Whether, on the facts and circumstances of the case and in law, benefit of deduction u/s. 80HHC can be claimed on the total income before allowing deduction of the unabsorbed losses, unabsorbed investment allowance and the unabsorbed depreciation therefrom? 2. The assessee firm is engaged in the business of manufacturing detergent powder at Mandali. During the year under consideration, the assessee claimed deduction u/s 80HH and 80-I. The Assessing Officer rejected the claim on the ground that the detergent powder was not manufactured under the assessee’s factory but was manufactured by M/s. Patel Detergents on job work basis. On appeal the CIT (Appeals) rejected the disallowance of the Assessing Officer and held that the assessee shall be qualified for relief under sections 80-I and 80-HH of the Act. On appeal before the ITAT by the revenue, by impugned judgment and order, ITAT has upheld the decision of CIT (Appeals). Page 2 of 4

O/TAXAP/535/2003 JUDGMENT 3. Being aggrieved and dissatisfied with the impugned judgment and order passed by the ITAT, the revenue has preferred the present Tax Appeal for consideration of the aforesaid substantial question of law. 4. Mr. Manish Bhatt, learned Senior Counsel appearing with Ms. Mauna Bhatt, learned advocate on behalf of the appellant – Department has submitted that as such the issue involved in the present Tax Appeal is now not res integra in view of the decision of the Honble Supreme Court in the case of Commissioner of Income-Taz vs. Shirke Construction Equipment Ltd. reported in (2007) 291 ITR 380 which squarely covers issue no. 1 on which the appeal was admitted. 5. Mr. Soparkar, learned advocate appears on behalf of the assessee. He is not in a position to dispute the above and is not in a position to show and/or point out any contrary decision. 6. Having heard Shri Bhatt, learned Counsel appearing on behalf of the Department and Mr. Soparkar, learned advocate appearing on behalf of the assessee and the questions posed for consideration by us reproduced hereinabove and considering the decision of the Honble the Supreme Court in the case of Shirke Construction Equipment Ltd(supra), the questions, which are raised in the present appeal is required to be answered in favour of the Department. We are not giving any elaborate reasons for the same as in the case of Shirke Construction Equipment (Supra) it is held by Honble the Supreme Court that in determining business profits for the deduction under section 80HHC the Page 3 of 4

O/TAXAP/535/2003 JUDGMENT unabsorbed business losses of earlier years under section 72 should be set off. 7. In view of the above, the question of law is answered in favour of the revenue – Department and consequently, the impugned judgment and order passed by the ITAT is quashed and set aside. Hence, the present Tax Appeal is allowed in favour of revenue and against the assessee. (K.S.JHAVERI, J.) (K.J.THAKER, J) divya Page 4 of 4