COMMISSIONER OF INCOME TAX-I, LUDHIANA vs. M/S EASTMAN INDUSTRIES

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ITA/322/2008HC Punjab & HaryanaPHHC01080302200829 March 2016Bench: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE JITENDRA CHAUHAN2 pages
AI SummaryDismissed

What did the High Court hold?

The Revenue did not press the appeal. The counsel for the appellant-revenue submitted that in view of CBDT Circular No. 21/2015 dated 10.12.2015 read with Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, the appeal was not being pressed as the tax effect involved was less than ₹20 lacs. The Revenue prayed for liberty to file an application for revival of the appeal if something survived therein. The Court dismissed the appeal as not pressed with liberty as prayed for. It was clarified that the withdrawal of the appeal by the revenue would not be taken as an affirmation of the Tribunal's order on merits. The legal issue claimed by the revenue was left open to be adjudicated in an appropriate case.

What were the facts?

The Revenue, Commissioner of Income Tax-I, Ludhiana, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 31.7.2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (B). The appeal pertained to assessment year 2000-01 and concerned the deletion of certain additions made by the Assessing Officer, which were upheld by the CIT(A). The additions related to premium paid to ECGC, custom duty, and cash incentives. The appeal was filed before the High Court of Punjab and Haryana at Chandigarh.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the Tribunal was justified in upholding the deletion of the addition on account of premium paid to ECGC, as this amount pertained to the period 1.10.1995 to 31.10.1997 and not the year under consideration? 2. Whether the Tribunal was justified in upholding the deletion of the addition on account of custom duty, considering it related to previous years and was penal in nature, thus not allowable in the relevant assessment year in accordance with Section 14A of the Act? 3. Whether the Tribunal was justified in upholding the deletion of the addition on account of disallowance of cash incentives, given that the assessee had already claimed this amount for deduction under Section 80HHC and it could not be allowed in the relevant assessment year under Section 14A of the Act? The Revenue argued that the Tribunal erred in deleting these additions. The Assessee's arguments are not recorded in the provided text. The Revenue relied on CBDT Circular No. 21/2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016.

Which sections of the Income-tax Act were involved?

Section 260A,Section 14A,Section 80HHC

AI-generated summary — verify with the full judgment below

ITA No. 322 of 2008 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 322 of 2008 (O&M) Date of Decision: 29.03.2016 Commissioner of Income Tax-I, Ludhiana .......Appellant Versus M/s Eastman Industries ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Rajesh Katoch, Advocate for the appellant. RAJESH BINDAL,J. This appeal has been filed under Section 260 A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 31.7.2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (B), in ITA No.393/CHD/2006, for the assessment year 2000-01, raising the following substantial questions of law: (i) Whether on the facts and in law, the Hon'ble Income Tax Appellate Tribunal is justified in upholding the decision of CIT (A) deleting the addition on account of premium paid to ECGC as this amount was paid for the period from 1.10.1995 to 31.10.1997 and not for the year under consideration? (ii) Whether on the facts and in law, the Hon'ble Income Tax Appellate Tribunal is justified in upholding the decision of CIT (A) to delete the REEMA SAINI 2016.04.04 13:52 I attest to the accuracy and authenticity of this document High Court, Chandigarh

ITA No. 322 of 2008 (O&M) -2- addition on account of custom duty as this amount relates to the previous years and was also penal in nature. Therefore, this liability cannot be allowed in the relevant assessment year in accordance with the previous of section 14A of I.T. Act? (iii) Whether on the facts and in law, the Hon'ble Income Tax Appellate Tribunal is justified in upholding the decision of CIT (A) to delete the addition on account of disallowance of cash incentives as the assessee has already claimed this amount for deduction u/s 80 HHC and this amount cannot be allowed in the relevant assessment year in accordance with the provisions of section 14 A of I.T. Act? Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, he does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, he prays that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the appeal by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 29.03.2016 JUDGE reema REEMA SAINI 2016.04.04 13:52 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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