COMMISSIONER OF INCOME TAX, LDH. vs. M/S L W S KNITWEARS LTD.

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ITA/517/2006HC Punjab & HaryanaPHHC01075248200603 April 2007Bench: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE M.M. KUMAR2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the questions of whether the goods were actually exported and whether the claim for deduction under Section 80HHC was genuine are pure questions of fact. The Court found that there was ample evidence on record to support the ITAT's conclusion. The Court reasoned that once the goods had left the territorial waters of India, the incidence of export is complete. The fact that the goods may not have reached the country of destination is not a relevant factor for concluding that the claim under Section 80HHC is bogus. The Revenue's counsel did not refer to any legal requirement mandating that export is only complete upon receipt of goods in the destination country. The Court also noted that the Revenue's arguments amounted to a re-appreciation of evidence, which is not permissible in an appeal admitted on a substantial question of law, and the findings of the ITAT were not shown to be perverse. No issue was expressly left undecided.

What were the facts?

The appeal was filed by the Revenue against an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The ITAT's order was in relation to ITA No. 216/Chandi/2005 for the assessment year 1996-97. The assessee is M/s L.W.S. Knitwears Limited, Ludhiana. The dispute concerns the genuineness of the assessee's claim for deduction under Section 80HHC of the Income Tax Act, 1961, based on the export of hosiery goods. The Revenue contended that the goods were not actually exported as they did not reach the destination country.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was correct in holding that the hosiery goods were actually exported and that the claim for deduction under Section 80HHC of the Income Tax Act was genuine and allowable to the assessee/respondent? Assessee's Arguments: Not recorded in the judgment. Revenue's Arguments: The Revenue argued that the goods never reached the country to which they were exported, and therefore, the ITAT should have concluded that the claim for deduction under Section 80HHC was bogus. The Revenue based its assertion on points mentioned in para 4 (i) to (vii) of its appeal (details not provided in the judgment).

Which sections of the Income-tax Act were involved?

Section 80HHC,Section 260-A

AI-generated summary — verify with the full judgment below

I.T.A. No.517 of 2006 1 In the High Court of Punjab and Haryana, Chandigarh. I.T.A..No.517 of 2006 Date of Decision: 3.4.2007 Commissioner of Income Tax-I, Ludhiana.

…Appellant. Versus M/s L.W.S.Knitwears Limited, Ludhiana.

…Respondent. CORAM: HON’BLE MR.JUSTICE M.M.KUMAR HON’BLE MR.JUSTICE RAJESH BINDAL Present: Mr.Sanjiv Bansal, Advocate for the appellant-revenue. JUDGMENT M.M.KUMAR, J. (ORAL)

This is an appeal filed by the revenue under Section 260-A of the Income Tax Act, 1961 against the order of Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh, passed in I.T.A. No.216/Chandi/2005 dated 28.4.2006 in respect of assessment year 1996-97. The revenue has claimed that the following substantial question of law would arise for determination of this Court:- “Whether on the facts and in the circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was correct in holding that the hosiery goods were actually exported and that claim for deduction under Section 80HHC of Income Tax Act was genuine and allowable to the assessee/respondent?”

I.T.A. No.517 of 2006 2

After hearing learned counsel, we find that these are pure questions of fact as to whether the goods were actually exported or the claim for deduction under Section 80HHC of the Act was genuine. It has been argued by learned counsel for the revenue on the basis of assertion made in para 4 (i) to (vii) that the goods never reached the Country to which export was made and, therefore, the Tribunal should have concluded that the claim for deduction under Section 80HHC of the Act was bogus. However, from the perusal of the impugned order passed by the Tribunal, we find that there is ample evidence on record to support the conclusion reached by the Tribunal in the penultimate para. Even otherwise, once the goods had left the territorial water of India the incidence of export is complete and, therefore, on the basis that goods have not reached the Country of destination would not be a factor relevant for concluding that the claim made under Section 80HHC of the Act is bogus. Learned counsel has not referred to any requirement under the law to submit that the export would be complete only when the goods are received in the Country of destination. In any case, it amounts to re-appreciation of the evidence which cannot be done by this Court as the appeal could only be admitted on substantial question of law. The findings recorded by the Tribunal have not been shown to be perverse. Dismissed. (M.M.KUMAR)

Judge April 3, 2007 (RAJESH BINDAL) dkb Judge

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