M/S METRIX PRECISION COMPONENTS PVT LIMITED vs. THE DEPUTY COMMISSIONER OF INCOME-TAX

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ITA/383/2014HC KarnatakaKAHC01030595201423 September 2020Bench: ALOK ARADHE,H.T. NARENDRA PRASAD4 pages
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What did the High Court hold?

The High Court held that the Tribunal was incorrect in sustaining the denial of deduction under Section 10B. The substantial questions of law were answered in favor of the assessee.

What were the facts?

The assessee, M/s. Metrix Precision Components Pvt. Limited, appealed against the denial of deduction under Section 10B of the Income Tax Act for the Assessment Year 2008-09. The Assessing Officer, CIT(A), and the Tribunal had denied this benefit.

What were the issues?

Whether the Tribunal erred in denying the benefit of deduction under Section 10B due to misinterpretation or misconstruction of the provision and facts, overlooking relevant Supreme Court and Co-ordinate Bench decisions.

Which sections of the Income-tax Act were involved?

Section 10B

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 23RD DAY OF SEPTEMBER 2020

PRESENT

THE HON’BLE MR. JUSTICE ALOK ARADHE

AND

THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD

I.T.A. NO.383 OF 2014 BETWEEN:

M/S. METRIX PRECISION COMPONENTS PVT. LIMITED 46, KSSIDC INDUSTRIAL ESTATE KUMBALGODU, BANGALORE REPRESENTED BY ITS MANAGING DIRECTOR SRI. PRADEEP KASHYAP AGED ABOUT 50 YEARS S/O SRI. GOPINATH M. ... APPELLANT (BY SRI. BALARAM R. RAO, ADV.,)

AND:

THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-12(1), BANGALORE. ... RESPONDENT (BY SRI. K.V. ARAVIND, ADV.,) - - -

THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT, 1961 ARISING OUT OF ORDER DATED 11.04.2014 PASSED IN ITA NO.1598/BANG/2012 FOR THE ASSESSMENT YEAR 2008-09, PRAYING THAT THIS HON’BLE COURT MAY BE PLEASED TO: (I) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. (II) ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 11-04-2014

BEARING ITA NO.1598/BANG/2012 FOR THE ASSESSMENT YEAR 2008-09.

THIS ITA COMING ON FOR FINAL HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:

JUDGMENT

This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment year 2008-09. The appeal was admitted by a bench of this Court vide order dated 20.03.2015 on the following substantial question of law:

(i) Whether the Tribunal is correct in sustaining the order of the Respondent in denying the benefit of deduction u/s 10B of the Act in the computation of taxable total income on the wrong interpretation of as well as on the misreading of the said provisions especially the sub-section (3)?. (ii) Whether the Tribunal is correct in sustaining the order of the Respondent

in denying the benefit of deduction u/s 10B of the Act in the computation of taxable total income on the misconstruction of the facts of the case thereby establishing perversity in the impugned order? (iii) Whether the Appellate Tribunal is correct in confirming the disallowance of the deduction u/s 10B of the Act overlooking the principles laid down by the Supreme Court in the decision reported in 223 ITR 271 and the principles laid down by the Co-ordinate Bench rendered in the case of M/s Granite Mart P Ltd.,?

2.

For the reasons assigned by us in the order passed today in I.T.A.No.384/2014, the substantial questions of law framed by this court are answered in favour of the assessee and against the revenue. The orders passed by the Assessing Officer, Commissioner of Income Tax (Appeals) and the order of the Tribunal insoafar it deprives the assessee of the benefit under Section 10B of the Act are hereby quashed and the

assessee is entitled to the benefit of deduction under Section 10B of the Act.

In the result, the appeal is allowed.

Sd/- JUDGE

Sd/- JUDGE ss

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