RANBAXY LABORATORIES LTD.

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ITA/571/2008HC Delhi11 December 20082 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the language employed in Section 80IA and Section 80IB of the Income Tax Act, 1961, in the context of the question raised, is virtually identical. Following its own earlier decision in CIT v. Dharampal Prem Chand Limited (supra), the Court answered the question in favour of the assessee and against the revenue. The impugned order of the ITAT was set aside to the extent of the denial of deduction. The ratio decidendi is that where the language of Section 80IA and 80IB is identical concerning the eligibility of certain income for deduction, the interpretation applied to one section should extend to the other. The appeal was allowed to this extent, with operative directions for the deduction to be granted.

What were the facts?

The assessee, Ranbaxy Laboratories Ltd., filed an appeal before the Delhi High Court against an order passed by the Income Tax Appellate Tribunal (ITAT). The appeal pertains to the assessment year(s) not specified in the judgment. The core issue 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 procedural history indicates that the ITAT had passed an order which is now under challenge. The amount in dispute is not specified.

What were the issues?

The Tribunal had to decide the following substantial question of law: 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? The assessee contended that the deduction under Section 80IA should have been allowed on duty drawback and profit on sale of REP licences. The revenue's contentions are not recorded in the judgment. The assessee relied on the decision in CIT v. Dharampal Prem Chand Limited: ITA 1441/2006 decided on 27.11.2008.

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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