THE COMMR. OF INCOME TAX-III LDH. vs. M/S NAHAR SPINNING MILLS LTD.

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ITA/425/2006HC Punjab & HaryanaPHHC01075145200613 November 2006Bench: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL1 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal preferred by the Revenue had no merit. The Court noted that an identical issue had been decided by the same Court on 22.05.2006 in the case of Commissioner of Income Tax-I, Ludhiana v. M/s Vardhman Polytex Ltd. In that precedent, it was held that Sales Tax and Central Sales Tax cannot be included in the total turnover of the assessee for computing the deduction under Section 80HHC of the Income-tax Act, 1961. Therefore, following its own earlier decision, the High Court dismissed the present appeal filed by the Revenue. No specific amount in dispute was mentioned in the judgment.

What were the facts?

The Revenue, Commissioner of Income Tax-III, Ludhiana, has filed an appeal against the order dated 29.11.2005 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench “A”. The appeal pertains to the assessment year 1997-98 and concerns the computation of deduction under Section 80HHC of the Income-tax Act, 1961. The core of the dispute lies in whether Sales Tax and Central Sales Tax should be excluded from the assessee's total turnover for the purpose of calculating this deduction. The ITAT had previously ruled in favor of the assessee on this matter.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in holding that Sales Tax and Central Sales Tax be excluded from the total turnover of the assessee while computing deduction u/s 80HHC? (Question of law turning on Section 80HHC of the Income-tax Act, 1961). Assessee's Contention: The assessee argued that Sales Tax and Central Sales Tax should be excluded from the total turnover for the purpose of calculating the deduction under Section 80HHC. The ITAT had upheld this view. Revenue's Contention: The Revenue contended that Sales Tax and Central Sales Tax should not be excluded from the total turnover for the computation of deduction under Section 80HHC. The Revenue has appealed the ITAT's decision.

Which sections of the Income-tax Act were involved?

Section 80HHC

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.425 of 2006 Date of decision: 13.11.2006 The Commissioner of Income Tax-III, Ludhaina. ---Appellant Vs. M/s Nahar Spinning Mills Ltd., Ludhiana. ---Respondent. CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE RAJESH BINDAL Present: Mr. S.K. Garg Narwana, Advocate for the revenue. ----- ORDER: This appeal has been preferred by revenue against the order dated 29.11.2005 of Income Tax Appellate Tribunal, Chandigarh Bench “A” in I.T.A. No.759/CHANDI/2000 in respect of the assessment year 1997-98 proposing following substantial question of law:- “Whether on the facts and in the circumstances of the case, the Hon’ble ITAT was right in law in holding that Sales Tax and Central Sales Tax be excluded from the total turnover of the assessee while computing deduction u/s 80HHC?” It has not been disputed that identical issue has been decided by this Court on 22.05.2006 in I.T.A. No.293 of 2004, Commissioner of Income Tax-I, Ludhiana v. M/s Vardhman Polytex Ltd., Chandigarh Road, Ludhiana, wherein it was held that Sales Tax and Central Sales Tax cannot be included in total turnover of the assessee for computing deduction under Section 80HHC of the Income-tax Act, 1961.

In view of above, we do not find any merit in this appeal and the same is dismissed. ( ADARSH KUMAR GOEL ) JUDGE November 13, 2006 ( RAJESH BINDAL ) ashwani JUDGE

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