COMMISSIONER OF IT vs. M/S AVERY CYCLES INDS. LTD

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ITA/377/2005HC Punjab & HaryanaPHHC01072107200525 April 2016Bench: THE TAXING OFFICER,MR. JUSTICE SATPAL2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as not pressed. The revenue had submitted that due to the low tax effect, as per CBDT circulars, they did not wish to pursue the appeal. The Court granted liberty to the revenue to file an application for revival of the appeal if circumstances warranted. The Court clarified that the withdrawal of the appeal by the revenue would not be considered an affirmation of the Tribunal's order on merits. The legal issue raised by the revenue was explicitly left open to be adjudicated in an appropriate future case. Therefore, no finding was given on the merits of whether CST/Sales Tax and Excise Duty should be excluded from total turnover for Section 80HHC deduction.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Ludhiana-II (appellant/revenue) against an order dated 03.03.2005 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (A). The Tribunal's order was in relation to ITA No. 1040/Chandi/1998 for the assessment year 1995-96. The dispute concerned the computation of deduction under Section 80HHC of the Income Tax Act, 1961. The revenue challenged the Tribunal's decision to allow the exclusion of Central Sales Tax (CST), Sales Tax, and Excise Duty from the total turnover for the purpose of calculating this deduction. The amount in dispute was not explicitly stated but was implied to be below INR 20 lacs based on the revenue's submission.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal was right in law in deleting the Assessing Officer's (AO) action to exclude CST/Sales Tax and Excise Duty from total turnover for the purpose of computing deduction under Section 80HHC? The appellant-revenue contended that in view of CBDT Circular No. 21/2015 dated 10.12.2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 08.03.2016, they did not wish to press the appeal as the tax effect involved was less than INR 20 lacs. They prayed for liberty to file an application for revival of the appeal if something survived therein. The respondent-assessee's contentions were not recorded as the revenue chose not to press the appeal.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80HHC

AI-generated summary — verify with the full judgment below

ITA No. 377 of 2005 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 377 of 2005 (O&M) Date of Decision: 25.04.2016 Commissioner of Income Tax, Ludhiana-II .......Appellant Versus M/s Avery Cycle Industries Ltd. ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Zora Singh Klar, Advocate for the appellant. Mr. Alok Mittal, Advocate for the respondent. 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 3.3.2005 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (A), in ITA No. 1040/Chandi/1998, for the assessment year 1995-96, raising the following substantial question of law: Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was right in law in deleting the A.O. to exclude CST/Sales Tax and Excise Duty from total turnover for the purpose of computing deduction u/s 80HHC? REEMA SAINI 2016.05.03 11:16 I attest to the accuracy and authenticity of this document High Court, Chandigarh

ITA No. 377 of 2005 (O&M) -2- 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) 25.04.2016 JUDGE reema REEMA SAINI 2016.05.03 11:16 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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