THE COMMISSIONER OF INCOME TAX PATIALA vs. M/S GROZ BACKERT ASIA LTD

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ITA/267/2003HC Punjab & HaryanaPHHC01053812200312 October 2006Bench: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that questions 1 and 3 were not substantial questions of law, referencing its own judgment in ITA No.2 of 2004 (The Commissioner of Income tax, Patiala v. M/s Groz Backert Asia Limited Chandigarh). Regarding question 2, the High Court found that the ITAT's view was in conformity with the law laid down by the court in the assessee's own case in ITA No.136 of 2005 decided on 28.7.2005, and therefore, it was also not a substantial question of law. Consequently, the appeal filed by the revenue was dismissed. No issue was expressly left undecided.

What were the facts?

The Commissioner of Income Tax, Patiala (the revenue) filed an appeal before the High Court of Punjab and Haryana at Chandigarh against an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'A', dated 13.5.2003. The appeal pertained to assessment year 1994-95 and challenged the ITAT's decision on three substantial questions of law. The assessee is M/s Groz Backert Asia Limited, Chandigarh. The ITAT's order was in ITA No.299/Chandi/98. The High Court was considering whether the ITAT's findings on foreign travelling expenditure, valuation of closing stock, and calculation of deduction under Section 80HHC constituted substantial questions of law.

What were the issues?

The High Court was to decide whether the following questions constituted substantial questions of law: 1. Whether the ITAT was correct in holding that expenditure incurred on foreign travelling was a revenue expenditure? 2. Whether the ITAT was correct in holding that the value of finished goods in closing stock would not include Central Excise Duty components? 3. Whether the ITAT was correct in holding that for the purpose of calculating deduction under Section 80HHC, sales tax and excise duty should not be included in the 'total turnover', in view of Explanation (ba) below sub-section (4B) of Section 80HHC of the Income Tax Act, 1961? The revenue argued that these were substantial questions of law. The judgment does not record specific arguments from the assessee regarding these issues, but it refers to prior judgments of the same court in the assessee's own case.

Which sections of the Income-tax Act were involved?

Section 80HHC

AI-generated summary — verify with the full judgment below

ITA No.267 of 2003 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.267 of 2003 Date of decision:12.10.2006 The Commissioner of Income Tax, Patiala

....Appellant versus M/s Groz Backert Asia Limited, Chandigarh ....Respondent CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAJESH BINDAL Present: Dr. N.L.Sharda, Advocate, for the appellant. Ms.Radhika Suri, Advocate, for the respondent.

JUDGMENT: 1. This appeal has been preferred by the revenue against the order of the Income Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh (in short, 'the ITAT') dated 13.5.2003 in ITA No.299/Chandi/98, in respect of assessment year 1994-95, proposing following substantial questions of law:- “1. Whether on the facts and in the circumstances of the case, the ITAT was right in law in holding that the expenditure incurred on foreign travelling was a revenue expenditure? 2. Whether on the facts and in the circumstances of the case, the ITAT was right in law in holding that the value of the finished goods in the closing stock would not include Central Excise Duty components?” 3. Whether on the facts and in the circumstances of the case, the ITAT was right in law in holding that for the purpose of calculation of deduction under section 80HHC sales tax, excise duty etc., should not be included in the “total turnover” in view of Explanation (ba) below sub-section (4B) of section 80HHC of the IT Act, 1961?” 2. As far as questions at Sr.Nos. 1 and 3 are concerned, the same

ITA No.267 of 2003 2 are held not to be substantial questions of law, in view of our judgment rendered today in ITA No.2 of 2004 (The Commissioner of Income tax, Patiala v. M/s Groz Backert Asia Limited Chandigarh). 3. As far as question at Sr.No.2 is concerned, the view expressed therein being in conformity with law laid down by this Court in assessee's own case in ITA No.136 of 2005 decided on 28.7.2005, we do not find the same also to be a substantial question of law. 4. Accordingly, the appeal is dismissed. (Adarsh Kumar Goel) Judge October 12, 2006 (Rajesh Bindal) 'gs' Judge

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