Abhishek Industries Ltd v. Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. C.M. Nos.20932-33-CII of 2010 &C.M. No.29459-CII of 2009 in/andI.T.A. No.681 of 2009 (O&M) Date of decision: 27.8.2010C.M. No.29459-CII of 2009 in/andI.T.A. No.681 of 2009 (O&M) Date of decision: 27.8.2010 Abhishek Industries Ltd. Vs. Assistant Commissioner of Income Tax. -----Appellant. -----Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Sandeep Goyal, Advocatefor the appellant. for the appellant. Mr. Rajesh Katoch, Standing Counsel forMr. Dinesh Goyal, Standing Counsel for the respondent. --- ADARSH KUMAR GOEL, J. 1. Notice of motion. Mr. Rajesh Katoch, Advocate,present in Court, accepts notice on behalf of Mr. Dinesh Goyal,Standing Counsel for the revenue. 2. Delay condoned. Heard on merits. 3. This appeal has been preferred by the assesseeunder Section 260-A of the Income Tax Act, 1961 (for short, “theAct”) against the order dated 31.3.2009 in I.T.A.No.582/CHANDI /2007 passed by the Income Tax AppellateTribunal, Chandigarh, proposing to raise following substantialquestion of law:- “(i)Whether the appellant-assessee is entitled tothe benefit of Section 80-HHC(3) on the sale ofDEPB?the benefit of Section 80-HHC(3) on the sale ofDEPB? (ii)Whether ion the facts and circumstances of thecase, the Ld. Tribunal is justified in holding thatthe assessee has failed to fulfill the conditionslaid down in third proviso to Section 80-HHC(3)?case, the Ld. Tribunal is justified in holding thatthe assessee has failed to fulfill the conditionslaid down in third proviso to Section 80-HHC(3)?(iii)Whether on the facts and circumstances of thecase, the finding of Ld. Tribunal is perverse tothe extent that assessee has not produced anymaterial on record to show that conditions laiddown in third proviso to Section 80-HHC(3) havebeen fulfilled?case, the finding of Ld. Tribunal is perverse tothe extent that assessee has not produced anymaterial on record to show that conditions laiddown in third proviso to Section 80-HHC(3) havebeen fulfilled? (iv)Whether the Ld. Commissioner was justified ininvoking powers of Section 263 for revision ofthe Assessment order on a debatablequestion?”invoking powers of Section 263 for revision ofthe Assessment order on a debatablequestion?” 4. The Assessing Officer allowed benefit of Section80HHC of the Act in respect of export income but theCommissioner exercising power under Section 263 of the Actheld the assessment order to be erroneous and prejudicial to theinterests of the revenue, to the extent of giving benefit of incomederived from sale of DEPB for purposes of Section 80HHC of theAct. 5. It was held that conditions prescribed under Clause(a) and (b) of the third Proviso to Section 80HHC of the Acthaving not been met, the benefit thereof could not be given. TheTribunal affirmed the said view observing:- 6. 7. “13. In this case we find that the Commissioner isjustified in observing that the Assessing Officer hasnot recorded as to in what manner the conditions inclauses (a) and (b) of the 3[rd] proviso to section 80-HHC(3) are satisfied by the assessee. Therefore, theaction of the Assessing Officer in allowing the benefitunder Section 80-HHC in terms of the afore-statedproviso cannot be said to be appropriate. TheCommissioner in para 11.2 of his order has concludedthat there is no material or evidence led by theassessee to demonstrate as to how the conditionsprescribed in clause (a) and (b) of the proviso aresatisfied. Before us also, on this issue, no materialhas been led which would enable us to infer differentlythan the Commissioner. Hence, we sustain the orderof the Commissioner withdrawing the deduction underSection 80-HHC allowed in respect of 90% of DEPBincome. Hence, the assessee fails on this aspect.” We have heard learned counsel for the parties. We have heard learned counsel for the parties. The proviso in question is as under:- “Provided also that in the case of an assesseehaving export turnover exceeding rupees ten croresduring the previous year, the profits computed underclause (a) or clause (b) or clause (c) of this sub-section or after giving effect to the first proviso, as thecase may be, shall be further increased by theamount which bears to ninety per cent of any sumreferred to in clause (iiid) of section 28, the sameproportion as the export turnover bears to the totalturnover of the business carried on by the assessee, if the assessee has necessary and sufficient evidenceto prove that,— (a)he had an option to choose either the dutydrawback or the Duty Entitlement PassBook Scheme, being the Duty RemissionScheme; anddrawback or the Duty Entitlement PassBook Scheme, being the Duty RemissionScheme; and (b)the rate of drawback credit attributable tothe customs duty was higher than the rateof credit allowable under the DutyEntitlement Pass Book Scheme, being theDuty Remission Scheme.”the customs duty was higher than the rateof credit allowable under the DutyEntitlement Pass Book Scheme, being theDuty Remission Scheme.” 8. There is nothing to show that case of the assesseewas covered by Clause (a) or Clause (b) which is a conditionprecedent for the benefit from DEPB to be taken into accountunder third proviso to Section 80 HHC of the Act. In absencethereof, the Commissioner was justified in interfering underSection 263 of the Act, which view has been rightly upheld by theTribunal. 9. No substantial question of law arises. 10. The appeal is dismissed.10. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE August 27, 2010MITTAL )ashwani ( AJAY KUMAR JUDGE