The Commissioner of Income Tax-II, vs. M/S TCI Finance Limited,

O/TAXAP/740/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 740 of 2006

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE KS JHAVERI

and HONOURABLE MR.JUSTICE K.J.THAKER

================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ COMMISSIONER OF INCOME TAX....Appellant(s) Versus MATANGI INDUSTRIES....Opponent(s) ================================================================ Appearance: MR.VARUN K.PATEL, ADVOCATE for the Appellant(s) No. 1 RULE SERVED for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Page 1 of 4

O/TAXAP/740/2006 JUDGMENT

Date : 10/12/2014

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Though served, none appears for the respondent. 2. By way of this appeal, the appellant has challenged the judgment and order dated 5.7.2005 passed by the Income Tax Appellate Tribunal in ITA No. 1907/Ahd/1999 for AY 1996- 97. 3. While admitting this appeal, this court has framed the following substantial questions of law: [A] Whether on the facts and in the circumstances of the case and in the law, the Appellate Tribunal was right in directing to exclude sales tax and excise duty while computing total turn-over for the purpose of deduction u/s. 80HHC of the IT Act ? [B] Whether the Appellate Tribunal is right in law and on facts in restoring the issue with regard to exclusion of 90% of job charges from the profits of Page 2 of 4

O/TAXAP/740/2006 JUDGMENT business

for

the

purpose

of calculation of deduction u/s. 80HHC of the Act, and also holding that if job charges are to be excluded, only net job charges be excluded ? 4. Heard the learned advocate for the appellant and considered the submissions. Both these questions which are posed for our consideration have already been answered by the Hon’ble Apex Court. The first question of law is answered in the case of Commissioner of Income Tax v. Lakshmi Machine Works, reported in 290 ITR 667 where the similar question had arisen and question no. 2 has been answered in the latest decision by the Hon’ble Apex Court in the case of ACG Associated Capsules Pvt. Ltd. v. Commissioner of Income Tax, reported in 343 ITR 89, therefore, delving into the details of assessment orders, the order of CIT(A) and the Tribunal, the question no. 1 is answered against the revenue and hold that the Tribunal was right in directing to exclude sales tax and excise duty while computing total turn-over for the purpose of deduction u/s. 80HHC of the IT Act. Hence, question no. 1 is answered against the revenue and in favour of the assessee. 5. The question no. 2 is concerned, we hold that the Tribunal was right in law and on Page 3 of 4

O/TAXAP/740/2006 JUDGMENT facts in restoring the issue with regard to exclusion of 90% of job charges from the profits of business for the purpose of calculation of deduction u/s. 80HHC of the Act, and also holding that if job charges are to be excluded, only net job charges be excluded. Having given our considered thought, we do not delve further and dispose of this appeal in light of the settle legal position annunciated hereinabove. The question No. 1 -Whether on the facts and in the circumstances of the case and in the law, the Appellate Tribunal was right in directing to exclude sales tax and excise duty while computing total turn-over for the purpose of deduction u/s. 80HHC of the IT Act, and question No. 2 -Whether the Appellate Tribunal is right in law and on facts in restoring the issue with regard to exclusion of 90% of job charges from the profits of business for the purpose of calculation of deduction u/s. 80HHC of the Act, and also holding that if job charges are to be excluded, only net job charges be excluded, are answered in affirmative. The appeal is dismissed. (K.S.JHAVERI, J.) (K.J.THAKER, J) mandora Page 4 of 4