THE COMMISSIONER OF INCOME TAX vs. M/S. CHOWGULE AND COMPANY LTD.,

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TXA/10/2008HC BombayHCBM05003243200720 August 2015Author: MOHIT S. SHAH, C.J.,HON'BLE SMT. JUSTICE ANUJA PRABHUDESSAI2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, following its own judgment delivered on the same day in other appeals by the Revenue against the same Assessee (Tax Appeals No. 6 and 7 of 2008), and specifically referencing its judgment in Sesa Goa Ltd. V/s. The Commissioner of Income Tax (Tax Appeal No. 53/2006 dated 7/05/2015), decided to remand the matter. The Court held that the Assessing Officer should reconsider the questions of law in light of the aforesaid judgment of the High Court. Therefore, the ITAT's order was not directly affirmed or reversed on merits but was set aside for reconsideration by the Assessing Officer. No specific finding was given on the merits of the exclusions by the ITAT. The operative direction was to remand the matter to the Assessing Officer.

What were the facts?

This Indian ITAT judgment concerns Tax Appeal No. 10 of 2008 filed by the Commissioner of Income Tax (the Revenue) against M/s. Chowgule & Company Ltd. (the Assessee) for the Assessment Year 2001-02. The appeal challenges an order dated 12/07/2007 passed by the Income Tax Appellate Tribunal (ITAT), Panaji Bench. The High Court of Bombay at Goa had admitted the appeal on two substantial questions of law. The procedural history indicates that the matter was taken up for hearing as other appeals by the Revenue against the same Assessee were decided on the same day. The High Court's decision was delivered on 20th August, 2015.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether the ITAT was justified in deleting the exclusion made by the Assessing Officer (AO) in respect of income from "uptopping vessel income, machinery hire income, barge management expenses" for determining profits under Section 80HHC, as these items allegedly lacked a nexus with the assessee's export activity under clause (baa) of the Explanation to Section 80HHC. 2. Whether the ITAT was justified in deleting the exclusion made by the AO in respect of "miscellaneous income, sale of scrap, service charges, grant-in-aid for medical expenses, recovery of fuel, group insurance, deptch money" for determining profits under Section 80HHC, as these items allegedly lacked a nexus with the assessee's export activity under clause (baa) of the Explanation to Section 80HHC. The Revenue contended that these incomes did not have a nexus with the export activity and should be excluded. The Assessee's arguments are not explicitly detailed in the provided text, but their position would be that these incomes should be included in the computation for Section 80HHC benefits.

Which sections of the Income-tax Act were involved?

Section 80HHC,Section 260-A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
1 TXA No.10 of 2008 IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO.10 OF 2008 The Commissioner of Income Tax, Having office at Aayakar Bhavan, Patto-Plaza, Panaji-Goa. …. Appellant V/s M/s. Chowgule & Company Ltd., Having office at Chowgule House, Marmugao-Harbour, Marmugao, Goa. …. Respondent Ms. Asha Desai, Advocate for the Appellant. Mr. Mihir Naniwadekar with Ms. Vinita Palyekar, Advocate for the Respondent. Coram:- MOHIT S. SHAH, C.J. & SMT. ANUJA PRABHUDESSAI, J. Date:- 20th August, 2015

ORAL JUDGMENT : (Per Mohit S. Shah, C.J.)

Not on Board. Upon mentioning, taken up on Board as the other appeals of the Revenue against the same Assessee have been decided today.

2.

This appeal under Section 260-A of the Income Tax Act, 1961 challenges the order dated 12/07/2007 of the Income Tax Appellate Tribunal, Panaji Bench. The relevant Assessment Year is 2001-02. 3. By order dated 3/03/2008, the appeal was admitted on the following substantial questions of law: (A) Whether on the facts and in the circumstances

2 TXA No.10 of 2008 of the case, the ITAT was justified in deleting the exclusion made by the AO in respect of amount received towards uptopping vessel income, machinery hire income, barge management expenses, being not having any nexus with the export activity of the assessee under clause (baa) of Explanation to the purpose of determining profits of the business u/s 80HHC ? (B) Whether on the facts and in the circumstances of the case, the ITAT was justified in deleting the exclusion made by the AO in respect of amount received towards miscellaneous income, sale of scrap, service charges, grant-in-aid for medical expenses, recovery of fuel, group insurance, deptch money, being not having any nexus with the export activity of the assessee under clause (baa) of Explanation for the purpose of determining profits of the business u/s 80HHC ?

4.

By a separate judgment delivered today in Tax Appeals No.6 and 7 of 2008 of this very Assessee, we have remanded the matter to the Assessing Officer to consider the above question in the light of the judgment dated 7/05/2015 of this Court in Sesa Goa Ltd. V/s. The Commissioner of Income Tax in Tax Appeal No.53/2006. Following the said judgment, we remand this matter also to the Assessing Officer for deciding the question in the light of the aforesaid judgment of this Court. Tax Appeal accordingly stands disposed of. SMT. ANUJA PRABHUDESSAI, J. MOHIT S. SHAH, C.J. NH/-

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