COMMISSIONER OF INCOME TAX-IIISURAT vs. MITUL GEMS

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TAXAP/848/2006HC GujaratGJHC24037834200620 November 2014Bench: HONOURABLE MR. JUSTICE KS JHAVERI,HONOURABLE MR. JUSTICE K.J.THAKER3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Gujarat, considering the submission made by the learned senior advocate for the assessee regarding the small amount involved and low revenue effect, decided that the Revenue ought not to have filed the appeal as per CBDT Instruction. Consequently, the Court answered the framed questions of law in favour of the assessee and against the Revenue. The appeal was dismissed on this procedural ground rather than on the merits of the substantial questions of law. Therefore, the specific findings of the Tribunal on the exchange rate difference and interest on fixed deposits for Section 80-HHC computation were not adjudicated upon by the High Court. No operative directions were issued, and no issues were expressly left undecided.

What were the facts?

The appellant, Commissioner of Income Tax-III, Surat (Revenue), has appealed against the judgment and order dated 25.11.2005 passed by the Income-tax Appellate Tribunal (ITAT), Ahmedabad Bench, Camp at Surat. The appeal pertains to assessment year 2000-01 and challenges the ITAT's decision in ITA No. 1298/Ahd/2003. The High Court of Gujarat admitted the appeal on 7.12.2006, framing substantial questions of law. The opponent is Mitul Gems (Assessee). The amount in dispute and the specific procedural history leading to the ITAT's order are not detailed in the provided text.

What were the issues?

The High Court of Gujarat framed two substantial questions of law for decision: 1. Whether the Appellate Tribunal was justified in holding that exchange rate difference pertaining to exports made in earlier years constitutes 'profits of business' for the purpose of Section 80-HHC of the Income-tax Act, 1961. 2. Whether the Appellate Tribunal was justified in holding that interest received on Fixed Deposits should be netted out for the computation of deduction under Section 80-HHC. The Revenue is the appellant, and Mitul Gems is the opponent. The judgment does not record specific arguments made by either side regarding these issues. However, the learned senior advocate for the opponent (assessee) submitted that the amount involved and the revenue effect are small, and therefore, as per CBDT Instruction, the Revenue ought not to have filed the appeal.

Which sections of the Income-tax Act were involved?

Section 80-HHC

AI-generated summary — verify with the full judgment below

O/TAXAP/848/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 848 of 2006

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 ? ================================================================ COMMISSIONER OF INCOME TAX-IIISURAT....Appellant(s) Versus MITUL GEMS....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 3

O/TAXAP/848/2006 JUDGMENT

Date : 20/11/2014

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of this appeal, the appellant-revenue has challenged the judgment and order dated 25.11.2005 passed by the Income-tax Appellate Tribunal, Ahmedabad Bench, Camp at Surat,h in ITA No. 1298/Ahd/2003 for the assessment year 2000-01. 2. While admitting this appeal on 7.12.2006, this Court has framed the following substantial questions of law: [A] Whether the facts and circumstances of the case and in law the Appellate Tribunal was justified in holding that the exchange rate difference pertaining to exports made in earlier years was ‘profits business within the meaning of Sec. 80-HHC of the Act ? [B] Whether

the

facts

and circumstances of the case, and in law the Appellate Tribunal was justified in holding that the interest received on Fixed Deposits should be netted out for the purpose of computation of deduction u/s. 80HHC ?” Page 2 of 3

O/TAXAP/848/2006 JUDGMENT 3. Heard the learned advocates appearing for the parties and considered the submissions. Mr. Soparkar learned senior advocate states that the amount involved in the present case is small one and there is low revenue effect, and therefore, as per CDBT Instruction, the revenue ought not to have come in appeal, and therefore, this appeal is required to be dismissed. In that view of the matter, the questions are answered in favour of the assessee and against the revenue. This appeal is dismissed accordingly. (K.S.JHAVERI, J.) (K.J.THAKER, J) mandora Page 3 of 3

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