THE COMMISSIONER OF INCOME TAX vs. M/S FABRITEX EXPORTERS PVT LTD

IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 3RD DAY OF SEPTEMBER 2012 PRESENT THE HON’BLE MR. JUSTICE K SREEDHAR RAO AND THE HON’BLE MR.JUSTICE B MANOHAR ITA NO.568 OF 2008 BETWEEN: 1. THE COMMISSIONER OF INCOME TAX C R BUILDING QUEENS ROAD BANGALORE 2. THE ASST. COMMISSIONER OF INCOME TAX CIRCLE-11(2) C R BUILDING QUEENS ROAD BANGALORE ...APPELLANTS (BY SRI:K V ARAVIND, ADV) AND: M/S FABRITEX EXPORTS (P) LTD. 7TH MILE, HOSUR ROAD KRISHNA REDDY INDUSTRIAL AREA BANGALORE – 560 068. ...RESPONDENT (BY SMT:ANUSHREE JOTS, ADV FOR SREEVATSA ASSTS.)

2 THIS ITA IS FILED UNDER SECTION 260-A OF IT ACT, 1961 ARISING OUT OF THE ORDER DATED 12.12.2007 PASSED IN ITA NO.542/BNG/2006, FOR THE ASSESSMENT YEAR 2002-2003 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT BANGALORE IN ITA NO.542/BNG/2006 DATED 12.12.2007 AND CONFIRM TTHEORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-11(2), BANGALORE IN THE INTEREST OF JUSTICE AND EQUITY. THIS ITA COMING ON FOR HEARING BEFORE THE COURT THIS DAY, K SREEDHAR RAO, J., MADE THE FOLLOWING:- J U D G M E N T The following substantial question of law is framed for consideration: “Whether the Tribunal was correct in holding that the job work income should be treated as part of the business income of the assessee by failing to apply the specific provisions of Explanation (baa) to Section 80HHC which contemplated reduction of 90% job work income from the profits and gains of the business for the purpose of computation deduction under Section 80HHC of the Act?” 2. In view of the decision of this Court in the case of M/s Maini Precision Products Pvt. Ltd. Vs The Joint Commissioner of Income Tax, Spl. Range-I in ITA

3 Nos.52/2009 and 182-185/2009 dated 18.08.2009, the first question of law is answered in favour of the revenue and in respect of the second question, in this appeal, this Court had already held that the same is covered by the judgment of this Court against the revenue in ITA No.1088/2006. Accordingly, this Court held that second question framed does not arise for consideration. Accordingly, appeal is disposed of. The amount of deduction should be 90% to the net income of the job receipt in terms of the judgment of this Court in the case of The Commissioner of Income Tax VS M/s Resonace Laboratories in ITA Nos.793, 794, 795 and 7962006 dated 06.06.2012. Sd/- JUDGE Sd/- JUDGE *bgn/-