Adyar Gate Hotel Ltd v. Mr.c.manishankar

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 2.11.2006 CORAM THE HON'BLE MR.JUSTICE P.D.DINAKARANANDTHE HON'BLE MR.JUSTICE P.P.S.JANARTHANA RAJA T.C.(A) No.2257 of 2006 Commissioner of Income TaxChennai. Adyar Gate Hotel Ltd., 132, TTK Road, Chennai-18 ..Appellant/ RespondentVs...Respondent/ Appellant Appeal under Section 260A of the Income Tax Act, 1961 against theorder of the Income Tax Appellate Tribunal, Madras 'A' Bench dated13.1.2006 in ITA Nos.1519/Mds/2002, for the assessment year 1993-1994aganist the order of the Commissioner of Income Tax (Appells -III) Chennai600 034, dated 10/062002 in ITA No Tr.520/2001-02 A-III and ;aganist theorder of the Deputy Commissioner of Income Tax Special Range III Chennai600 034 dated 126/02/1998 in PAn/GIR, 20-A, 1993-94. For Appellant:Mr.J.Narayanasamy, Jr. SC. For IT For respondent :Mr.Habibullah Basha, SC for Mr.C.Manishankar ----- J U D G M E N T (Delivered by P.D.DINAKARAN, J.) The above tax case appeal is directed against the order of theIncome-tax Appellate Tribunal dated 13.1.2006 made in ITANos.1519/Mds/2002 for the assessment year 1993-94 and the followingsubstantial question of law has been raised for consideration: Whether in the facts and circumstances of the case, the Tribunalwas right in holding that expenditure tax, luxury tax and salestax should not be included in the total business receipts of theassessee for the purpose of computation of deduction undersection 80HHD? https://hcservices.ecourts.gov.in/hcservices/ 2. The assessing officer, for the assessment year 1993-94, includedexpenditure tax, luxury tax and sales tax in the business receipts for thepurpose of computation of deduction under section 80HHD of the Income-taxAct, 1961 (hereinafter referred to as 'the Act'), on the ground that sincethe liability to pay these taxes arose on account of the assessee carryingon the business, the receipts would form part of the total turnover. Onappeal by the assessee, the Commissioner of Income-tax (Appeals) confirmedthe order of assessing officer. On further appeal by the assessee, theAppellate Tribunal, held that expenditure tax, luxury tax and sales taxshould not be included in the total business receipts of the assessee.Hence, the present appeal by the Revenue raising the question of lawreferred to above. 3. It is brought to our notice by the learned senior counselappearing for the assessee, which is not disputed by the counsel appearingfor the Revenue, that the issue raised in the question is covered againstthe Revenue in the unreported decision of this Court in the assessee's owncase in T.C.No.233 of 2006 dated 23.2.2006, wherein this Court, afterconsidering the decision of this Court in C.I.T. v. Wheels India Ltd. (275ITR 319) and the decision of Bombay High Court in C.I.T. v. SudarshanChemicals Industries Ltd. (245 ITR 769), held the issue in favour of theassessee. 4. It is seen that in the above two cases, viz., C.I.T. v. WheelsIndia Ltd. (275 ITR 319) and C.I.T. v. Sudarshan Chemicals Industries Ltd.(245 ITR 769), the Courts considered section 80 HHC of the Act relatingto deduction in respect of profits retained for export business and heldthat sales tax and excise duty are not to be included in the totalturnover while computing deduction under section 80HHC of the Act. 5. This Court in the assessee's own case in T.C.No.233 of 2006 dated23.2.2006, while considering section 80 HHD of the Act relating todeduction in respect of earnings in convertible foreign exchange, appliedthe above ratio and held that expenditure tax, luxury tax and sales taxshould not be included in the total business receipts for the purpose ofcomputation of deduction under section 80 HHD of the Act. 5. This Court in the assessee's own case in T.C.No.233 of 2006 dated23.2.2006, while considering section 80 HHD of the Act relating todeduction in respect of earnings in convertible foreign exchange, appliedthe above ratio and held that expenditure tax, luxury tax and sales taxshould not be included in the total business receipts for the purpose ofcomputation of deduction under section 80 HHD of the Act. 6. Following the ratio laid down by this Court in the assessee's owncase in T.C.No.233 of 2006 dated 23.2.2006, we hold that the AppellateTribunal was right in holding that expenditure tax, luxury tax and salestax should not be included in the total business receipts of the assesseefor the purpose of computation of deduction under section 80HHD of the Act. 7. Accordingly, we do not find any question of law, much less asubstantial question of law that arises out of the order of the AppellateTribunal and the tax case appeal stands dismissed. No costs. na. 0 Sd/ Asst. Registrar /true copy/ Sub Asst.Registrar To 1.The Assistant Registrar,Income Tax Appellate Tribunal'A' Bench Besant Nagar, Chennai -90.Income Tax Appellate Tribunal'A' Bench Besant Nagar, Chennai -90. 2.The Commissioner of Income-Tax (Appeals-III), Chennai.34Tax (Appeals-III), Chennai.34 3.The Deputy Commissioner of Income-tax, Spl. Range III,Chennai. 34.of Income-tax, Spl. Range III,Chennai. 34. 4. The Commissioner fo Income Tax, Chennai.34 + One cc to Mr. Pusya Sitaraman Advocate SR 52107 + One CC to Mr. C. Manishankar Advocate SR 51703 TEJ (co) sg 05/12/06 TC (A) No.2257 of 2006 2-11-2006