RANBAXY LABORATORIES LTD. vs. THE COMMISSIONER OF INCOME TAX

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ITA - 571 / 2008HC Delhi11 December 20082 pages
For Petitioner: MR.VINAY VAISH
AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the question raised was virtually identical to one considered in CIT v. Dharampal Prem Chand Limited: ITA 1441/2006, decided on 27.11.2008, in the context of Section 80IB of the Income Tax Act. The language employed in Section 80IA and 80IB, concerning the question of duty drawback and profit on sale of REP licences, was found to be virtually identical. Following its earlier decision in Dharampal Prem Chand, the High Court answered the question in favour of the assessee and against the revenue. The impugned order of the ITAT was set aside to this extent, and the appeal was allowed to this extent. No issue was expressly left undecided.

What were the facts?

The appeal was filed by Ranbaxy Laboratories Ltd. (the assessee) against an order of the Income Tax Appellate Tribunal (ITAT). The respondent was the Commissioner of Income Tax, New Delhi. The assessment year(s) are not explicitly stated in the provided text. The core of the dispute revolves around the denial of deduction under Section 80IA of the Income Tax Act, 1961, on duty drawback and profit on sale of REP licences. The High Court admitted the appeal, framing a substantial question of law.

What were the issues?

1. Whether on the facts and circumstances of the case the Income Tax Appellate Tribunal erred in law in denying deduction under Section 80IA of the Income Tax Act, 1961 on duty drawback and profit on sale of REP licences? Assessee's contention: The assessee argued that the ITAT erred in denying the deduction under Section 80IA on duty drawback and profit on sale of REP licences. The specific arguments and authorities relied upon by the assessee are not detailed in the provided text. Revenue's contention: The revenue contended that the ITAT's decision to deny the deduction was correct. The specific arguments and authorities relied upon by the revenue are not detailed in the provided text.

Which sections of the Income-tax Act were involved?

Section 80IA,Section 80IB

AI-generated summary — verify with the full judgment below

THE HIGH COURT OF DELHI AT NEW DELHI

Judgment delivered on: 11.12.2008

+ ITA 571/2008

RANBAXY LABORATORIES LTD. ... Appellant

- versus –

THE COMMISSIONER OF INCOME TAX NEW DELHI

... Respondent

Advocates who appeared in this case: For the Appellant : Mr Ajay Vohra with Ms Kavita Jha and Mr Sriram Krishna For the Respondent : Ms Rashmi Chopra

CORAM:- HON'BLE MR JUSTICE BADAR DURREZ AHMED HON’BLE MR JUSTICE RAJIV SHAKDHER

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. Admit. 2. The following substantial question of law arises for the consideration of this Court:- (1) Whether on the facts and circumstances of the case the Income Tax Appellate Tribunal erred in law in denying deduction under Section 80IA of the Income Tax Act, 1961 on duty drawback and profit on sale of REP licences? 2008:DHC:3300-DB

3.

We find that this question has been recently considered in the context of Section 80IB of the Income Tax Act in CIT v. Dharampal Prem Chand Limited: ITA 1441/2006 decided on 27.11.2008. We can dispose of this question straightaway. We find that the language employed in Section 80IA and 80IB, in the context of the question raised above, is virtually identical. Following the view that we have taken in Dharampal Prem Chand (supra), the question raised above, is answered in favour of the assessee and against the revenue.

To that extent the impugned order is set aside. The appeal stands allowed to this extent.

BADAR DURREZ AHMED, J

RAJIV SHAKDHER, J December 11, 2008 SR

2008:DHC:3300-DB

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