THE COMMISSIONER OF WEALTH TAX vs. PRITEE LUTHRA

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WTA/8/2001HC DelhiDLHC01028133200110 February 20032 pages
AI SummaryRemanded

What did the High Court hold?

The High Court decided both questions against the revenue and in favour of the assessee. The Court found that the issues were covered by the Supreme Court's decisions in P. R. Prabhakar v. CIT (2006) 284 ITR 548 (SC) and CIT v. Baby Marine Exports (2007) 290 ITR 323 (SC). Consequently, the Tribunal's findings that the entire profits, including commission income, are to be taken into account for determining the quantum of deduction under Section 80HHC, and that commission received on the assignment of export orders is eligible for such deduction, were upheld. The references were answered in line with these Supreme Court pronouncements. No specific operative directions were issued beyond answering the questions.

What were the facts?

These are two references before the Delhi High Court concerning assessment years 1990-1991 and 1991-1992. The references were made by the Commissioner of Income Tax (Petitioner) against M/s International Research Park Lab. Ltd (Respondent). The core of the dispute revolves around the computation of deduction under Section 80HHC of the Income Tax Act, 1961. The Tribunal had previously ruled in favour of the assessee on the specific questions referred. The revenue is challenging these findings. No counsel appeared for the respondent assessee.

What were the issues?

The High Court was asked to decide two questions of law: 1. Whether the Tribunal is correct in holding that for calculating the deduction under Section 80HHC, the entire profits computed under the head "profits and gains of business or profession," including commission income, should be considered? 2. Whether the Tribunal is correct in holding that commission received by the assessee from assigning export orders to another Indian party is includible in the profits eligible for deduction under Section 80HHC? The revenue's contention, implied by the reference of these questions, is that the Tribunal erred in its interpretation of Section 80HHC regarding the inclusion of commission income. The assessee's position, as upheld by the Tribunal, is that such commission income forms part of the eligible profits for deduction. The judgment does not explicitly detail the revenue's arguments beyond the framing of the questions, nor does it record any arguments from the assessee.

Which sections of the Income-tax Act were involved?

Section 80HHC

AI-generated summary — verify with the full judgment below

ITR 8/2001 & 16/2001

Page No. 1 of 2 THE HIGH COURT OF DELHI AT NEW DELHI

Judgment delivered on: 06.01.2010

+ ITR 8/2001 & ITR 16/2001

COMMR. OF INCOME TAX ..... Petitioner

versus

M/S INTERNATILONAL RESEARCH PARK LAB. LTD

..... Respondent

Advocates who appeared in this case:- For the Petitioner

: Ms P. L. Bansal with Mr Paras Chaudhry For the Respondent : None

CORAM: HON'BLE MR JUSTICE BADAR DURREZ AHMED HON'BLE MR JUSTICE SIDDHARTH MRIDUL

1.

Whether Reporters of local papers may be allowed

to see the judgment?

2.

To be referred to the Reporter or not?

3.

Whether the judgment should be reported in Digest?

BADAR DURREZ AHMED, J (ORAL) 1. In these two references for the assessment years 1990-1991 and 1991- 1992, the following questions were referred to us for our decision:- (1) Whether the Tribunal is right in holding that for determining the quantum of deduction in respect of profits derived from export u/s 80HHC, the entire profits computed under the head “profits and gains of business or profession” including the income of the nature of commission is to be taken into account?

(2) Whether the Tribunal is right in holding that commission received by the assessee on assignment of export orders to another party in India will form part of profits eligible for deduction u/s 80HHC?

It is not necessary for us to examine these questions in detail inasmuch as the same are covered in favour of the assessee and against the revenue in

ITR 8/2001 & 16/2001

Page No. 2 of 2 view of the Supreme Court decisions in the cases of P. R. Prabhakar v. CIT : (2006) 284 ITR 548 (SC) and CIT v. Baby Marine Exports : (2007) 290 ITR 323 (SC). Consequently, both the questions referred to us in these references are decided against the revenue and in favour of the assessee, following the Supreme Court decision referred to above. The references stand answered accordingly.

BADAR DURREZ AHMED, J

SIDDHARTH MRIDUL, J JANUARY 06, 2010 SR

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