V. M. SALGAOCAR AND BROTHER LIMITED (NOW KNOWN AS V. M. SALGAOCAR AND BROTHER PRIVATE LIMITED., vs. COMMISSIONER OF INCOME TAX, PANAJI-GOA

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TXA/18/2011HC BombayHCBM05001761201130 April 2012Author: A. P. LAVANDE,U. V. BAKRE2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal. It noted that the substantial question of law B, concerning whether losses on export of trading goods ought to be reduced from total business profits for Section 80HHC(3)(c)(i) purposes, had been squarely answered in favour of the appellant by a Division Bench of the same Court in a judgment dated 27.3.2012. The Revenue's counsel did not dispute this. Consequently, substantial question B was answered in favour of the appellant. In light of this, the Court deemed it unnecessary to answer substantial questions A and C. The appeal was allowed with no order as to costs. The ratio is that if a substantial question of law has already been decided by a coordinate bench of the High Court, that decision binds the subsequent bench, and the Revenue cannot dispute it.

What were the facts?

The appellant, V. M. Salgaocar and Brother Limited, is challenging an order passed by the Income Tax Appellate Tribunal (ITAT). The assessment years are not explicitly stated. The core of the dispute revolves around the treatment of losses incurred on the export of trading goods for the purpose of calculating deductions under Section 80HHC of the Income Tax Act, 1961. The Assessing Officer had invoked Section 154 to rectify an earlier order, leading to a reduction of export trading losses from total business profits. This action was challenged by the assessee.

What were the issues?

The Tribunal was asked to decide the following substantial questions of law: 1. Whether the Tribunal was correct in law in holding that the Respondent (Revenue) validly exercised jurisdiction under Section 154 of the Act to reduce the loss suffered on export of trading goods from the total profits of the business to arrive at the adjusted profits for the purposes of Section 80HHC(3)(c)(i) of the Act? 2. Whether the Tribunal was correct in law in holding that the loss suffered on export of trading goods ought to be reduced from the total profits of the business to arrive at the adjusted profits for the purposes of Section 80HHC(3)(c)(i) of the Act? 3. Whether, in view of the merger of the Assessment Order with the First Appellate Order, the Assessing Officer had jurisdiction to invoke Section 154 of the Income-tax Act to rectify the Assessment Order? Assessee's Contention: The assessee argued that the main question of law (Question B) was squarely answered against the Revenue by a Division Bench of the High Court in a judgment dated 27.3.2012 in other appeals. Revenue's Contention: The Revenue did not dispute the position stated by the assessee regarding the High Court's prior judgment.

Which sections of the Income-tax Act were involved?

Section 154,Section 80HHC

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 18 OF 2011 V. M. SALGAOCAR AND BROTHER LIMITED (NOW KNOWN AS V. M. SALGAOCAR AND BROTHER PRIVATE LIMITED., ... Appellant Versus COMMISSIONER OF INCOME TAX, PANAJI-GOA ... Respondent Mr. A. F. Diniz, Advocate for the appellant. Ms. A. Dessai, Advocate for the respondent. Coram:- A. P. LAVANDE & U. V. BAKRE, JJ. Date:- 30th April, 2012 P.C. Heard Mr. A. F. Diniz, learned Advocate for the appellant and Ms. A. Dessai, learned Advocate for respondents. 2. The appeal was admitted on the following substantial questions of law:- A. Whether the Tribunal was right in law in holding that the Respondent had validly exercised jurisdiction under Section 154 of the Act to reduce the loss suffered on export of trading goods from the total profits of the business to arrive at the adjusted profits of the business for the purposes of Section 80HHC(3)(c)(i) of the Act? B. Whether the Tribunal was right in law in holding that the loss suffered on export of trading goods ought to be reduced from the total profits of the business to arrive at the adjusted profits of the

business for the purposes of Section 80HHC(3)(c)(i) of the Act? C. Whether in view of the merger of the Assessment Order with the First Appellate Order, the Assessing Officer had any jurisdiction to invoke Section 154 of the Income-tax Act to rectify the Assessement Order? 3. Mr. Diniz, learned Advocate for the appellants submits that the main question of law i.e B arising in appeal is squarely answered against the respondents by the Division Bench of this Court by Judgment dated 27.3.2012 in Income Tax Appeal No. 5/2002, 6/2002 and 7/2002 to which one of us ( A. P. Lavande, J) is a party. 4. Ms. Dessai learned Counsel appearing for the respondent does not dispute this position. 5. In view of the above, the substantial question B is answered in favour of appellant. 6. Having answered substantial question B against the respondent, we do not deem it necessary to answer substantial questions A and C. 7. In view of the above, the appeal is allowed, with no order as to costs. A. P. LAVANDE, J. U. V. BAKRE, J. vn

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