THE COMMISSIONER OF INCOME TAX vs. M/S.HOTHUR TRADERS

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ITA/100053/2014HC KarnatakaKAHC02009746201427 November 2019Bench: N.S.SANJAY GOWDA,ALOK ARADHE4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the first substantial question of law regarding the assessee's engagement in manufacturing was covered by a previous judgment and answered it in favour of the assessee. The second question of law regarding the calculation of loss was deemed a question of fact, not law, and therefore not answered.

What were the facts?

The Revenue appealed against an ITAT order that allowed the assessee's claim for a deduction under Section 10B. The appeal raised questions about whether the assessee was engaged in manufacturing and the calculation of allowable losses.

What were the issues?

Whether the assessee was engaged in manufacturing for Section 10B benefits and the correct method for calculating allowable losses.

Which sections of the Income-tax Act were involved?

Section 10B,Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH ATED THIS THE 27TH DAY OF NOVEMBER, 2019 PRESENT THE HON’BLE MR.JUSTICE ALOK ARADHE

AND

THE HON’BLE MR.JUSTICE N.S.SANJAY GOWDA

I.T.A. NO.100053 OF 2014

BETWEEN

1.

THE COMMISSIONER OF INCOME TAX SEDAM ROAD, GULBARGA

2.

THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1, BELLARY. ...APPELLANTS (BY SRI. Y V RAVIRAJ, ADVOCATE)

AND

M/S.HOTHUR TRADERS 100% EOU, PAN: AAEFH 7705H PLOT NO. 5,6,7 & 8 HOTHUR HOUSE, INFATRY ROAD, CANTONMENT, NEAR NANDI SCHOOL, BELLARY. ... RESPONDENT (BY SRI. H R KAMBIYAVAR, ADVOCATE)

THIS ITA IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961 AGAINST THE ORDER PASSED IN ITA NO.1055/BANG/2012 DATED 07.03.2014 ON THE FILE OF THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH, BANGALORE, APPEAL FILED BY THE REVENUE AND C.O.’s BY THE ASSESSEE ARE DISMISSED.

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

JUDGMENT

Mr.Y.V.Raviraj, learned counsel for the Revenue. Mr.H.R.Kambiyavar, learned counsel for the assessee. 2. This appeal under Section 260 of the Income Tax Act (for short the ‘Act’) was admitted by an order dated 04.11.2015 on following substantial questions of law. (i) Whether the Tribunal is right in holding that the assessee was engaged in manufacture or production of an article or thing, and fulfilled the conditions laid down in Sections 10B(2)(ii) and 10B(2)(iii) of the Income Tax Act? (ii) Whether the Tribunal is right in holding that the loss should

3 be allowed at 3% of the total quantity and not on the quantity of wastage, as computed by the Assessing Authority? 3. When the matter was taken up today, learned counsel for the parties jointly submitted that the controversy involved in this appeal is squarely covered by a judgment dated 10.10.2018 passed by the Division Bench of this Court in I.T.A.No.100029/2014. 4. In view of the aforesaid submissions and for the reasons assigned in the aforesaid judgment, substantial question of law No.1 is answered against the Revenue and in favour of the assessee. 5. Sofar as second substantial question of law is concerned after hearing learned counsel for the parties, the aforesaid substantial

4 question of law which has been framed by a bench of this Court is not a question of law, but is a question of fact as it pertains to the weight of loss on total quantity. Therefore, we are not inclined to answer the same. In the result, the appeal is dismissed.

SD/- JUDGE

SD/- JUDGE CLK

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