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/19/2011HC BombayHCBM05001765201130 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 appellant's submission regarding substantial question B being answered in their favour by a Division Bench of the same Court on 27.3.2012 in related appeals was not disputed by the Revenue. Consequently, substantial question B was answered in favour of the appellant. Given this finding, the Court deemed it unnecessary to answer substantial questions A and C. The appeal was allowed with no order as to costs. The ratio decidendi is that if a substantial question of law is conclusively decided by a higher bench of the same court in a prior judgment, and the revenue does not contest this, the appeal should be decided in line with that precedent. The operative direction was to allow the appeal.

What were the facts?

The appellant, V. M. Salgaocar and Brother Limited, is appealing a decision by the Income Tax Appellate Tribunal (ITAT). The core of the dispute revolves around the calculation of profits for the purpose of Section 80HHC of the Income Tax Act. Specifically, the issue concerns whether a loss incurred on the export of trading goods should be reduced from the total business profits to arrive at adjusted profits. The Assessing Officer had invoked Section 154 of the Act to rectify an earlier order. The appeal was admitted on substantial questions of law concerning the Tribunal's jurisdiction under Section 154 and the treatment of export trading losses.

What were the issues?

The Tribunal had 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 Income Tax 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). 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). 3. 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 Assessment Order. Assessee's Contention: The appellant argued that substantial question B was squarely answered in their favour by a Division Bench of the Bombay High Court in a judgment dated 27.3.2012 in Income Tax Appeal Nos. 5/2002, 6/2002, and 7/2002. Revenue's Contention: The respondent did not dispute the appellant's submission regarding the precedent cited.

Which sections of the Income-tax Act were involved?

Section 80HHC,Section 154

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 19 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 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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