COMMISSIONER OF INCOME TAX vs. RAMESHCHANDRA S. PATEL

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TAXAP/664/2006HC GujaratGJHC24037650200603 December 2013Bench: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE R.P.DHOLARIA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue is squarely covered by the decision of the Hon'ble Supreme Court in the case of Joint Commissioner of Income-tax Vs. Mandideep Eng. And Pkg. Ind. P. Ltd. [2007] 292 ITR 1 (SC). The Supreme Court held that Sections 80HHC and 80IA of the Income Tax Act are independent. Consequently, a newly established industrial undertaking can claim deductions under both Sections 80HHC and 80IA on the gross total income. Applying this ratio, the question framed in the present Tax Appeals was answered against the Revenue. The appeals were dismissed.

What were the facts?

The Revenue has preferred these Tax Appeals against the common judgment and order of the Income Tax Appellate Tribunal (ITAT) dated March 24, 2005. The appeals pertain to Assessment Years 1996-97 and 1998-99, concerning the assessee Rameshchandra S. Patel. The ITAT's decision was against the Revenue. The appeals were admitted by the High Court, which framed a substantial question of law regarding the entitlement of the assessee to a deduction under Section 80IA before reducing the deduction under Section 80HHC.

What were the issues?

1. Whether the appellate tribunal is right in law and on facts in holding that the assessee is entitled to deduction under Section 80IA before reducing the deduction under Section 80HHC? Assessee's Contention: The assessee argued that they are entitled to claim deduction under Section 80IA before the deduction under Section 80HHC is applied. The core of the dispute revolves around the order of applying these deductions. Revenue's Contention: The Revenue contended that the deduction under Section 80HHC should be considered first, impacting the quantum of income available for deduction under Section 80IA. The Revenue did not dispute the applicability of the Supreme Court's decision.

Which sections of the Income-tax Act were involved?

Section 80IA,Section 80HHC

AI-generated summary — verify with the full judgment below

O/TAXAP/664/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 664 of 2006 With TAX APPEAL NO. 665 of 2006

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE R.P.DHOLARIA

====================================== 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 ? ====================================== COMMISSIONER OF INCOME TAX....Appellant(s) Versus RAMESHCHANDRA S. PATEL....Opponent(s) ====================================== Appearance: MS PAURAMI B SHETH, ADVOCATE for the Appellant(s) No. 1 MR SN SOPARKAR, SR. ADVOCATE for the Opponent(s) No. 1 MRS SWATI SOPARKAR, ADVOCATE for the Opponent(s) No. 1 ====================================== CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE R.P.DHOLARIA

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O/TAXAP/664/2006 JUDGMENT Date : 03/12/2013

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1. As common question of law and facts arise in both these appeals and as they arise out of the common impugned judgment and order passed by the ITAT with respect to the same assessee but different Assessment Years, both these appeals are decided and disposed of by this common judgment and order. 2. Being aggrieved and dissatisfied with the impugned common judgment and order passed by the Income Tax Appellate Tribunal (hereinafter referred to as ‘ITAT’) dated 24/03/2005 in ITA Nos. 224 & 225/Ahd/2005 for the Assessment Years 1996-97 & 1998-99, the revenue has preferred the present Tax Appeals. 3. While admitting the present Tax Appeals the following substantial question of law has been raised/framed; “Whether the appellate tribunal is right in law and on facts in holding that the assessee is entitled to deduction under Section 80IA before reducing the deduction under Section 80HHC?” 4. Having heard Ms. Paurami Sheth, learned Counsel appearing on behalf of the appellant-revenue and Shri S.N. Soparkar, learned Counsel appearing on behalf of the opponent-assessee and considering the question framed reproduced hereinabove, it appears that now the aforesaid Page 2 of 3

O/TAXAP/664/2006 JUDGMENT issue is squarely covered by the decision of the Hon’ble Supreme Court in the case of Joint Commissioner of Income-tax Vs. Mandideep Eng. And Pkg. Ind. P. Ltd. reported in [2007] 292 ITR 1 (SC) against the revenue. 4.1. The aforesaid is not disputed by Ms. Sheth, learned Counsel appearing on behalf of the revenue. 5. In the case of Mandideep Eng. And Pkg. Ind. P. Ltd. (Supra) it is held by Hon’ble the Supreme Court that since 80HHC and 80IA of the Income Tax Act are independent and, therefore, deduction can be claimed by a newly established industrial undertaking both under Sections 80HHC and 80IA on the gross total income. Applying the ratio of the law laid down by Hon’ble the Supreme Court in the case of Mandideep Eng. And Pkg. Ind. P. Ltd. (Supra) the question formulated in the present Tax Appeals are answered against the revenue. 6. Hence, the present Tax Appeals deserve to be dismissed and are accordingly dismissed. No costs. (M.R.SHAH, J.) (R.P.DHOLARIA,J.) Siji Page 3 of 3

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