Assistant Commissioner Of Income Tax Circle Ii, Patna v. Alkem Laboratories Ltd., Exhibition Road, Patna

IN THE HIGH COURT OF JUDICATURE AT PATNAMiscellaneous Appeal No.188 of 2009 ====================================================== 1. Commissioner of Income Tax-1, Patna 2. Assistant Commissioner of Income Tax Circle II, Patna .... .... Appellant/s Versus Alkem Laboratories Ltd., Exhibition Road, Patna .... .... Respondent/s ====================================================== Appearance :For the Appellant/s : Mrs. Archana Sinha, Sr. S.C. Mr. Suman Kumar Mishra, Advocate Mrs. Shilpi Keshri, Advocate For the Respondent/s : Mr. R.K. Rastogi, Advocate. ====================================================== CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA and HONOURABLE JUSTICE SMT. ANJANA MISHRA ORAL ORDER (Per: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA) 11 29-06-2015 Heard learned counsel for the appellants and learned counsel for the respondent. The appeal has been preferred against the order dated 28.08.2008 passed by ITAT, Patna in ITA No. 533/PAT/2007 with respect to assessment year 2004-2005, by which the Tribunal has dismissed the appeal filed by the Department. Learned counsel for the appellant Department has filed reframed substantial questions of law. It is, however, admitted that so far as the question nos. 1 and 4 of the reframed substantial questions are concerned, those very issues were the subject matter before us in M.A. No. 404 of 2008 and by order dated 30.03.2015, the issues have already been decided by this Court against the Revenue. So far as substantial question nos. 2 and 3 as reframed and sought to be pressed are concerned, the said issues were decided against the Revenue by the CIT (Appeal) as also by the Tribunal by relying upon section 80IA(5) read with Section 80IB (13) of the Income Tax Act, which begins with a non obstante clause providing that the quantum of deduction under the said provision shall be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and subsequent years including the assessment year for which the determination is to be made. For the said reason, it was held by the Tribunal relying upon the decision of the Delhi High Court in C.I.T. Vs. Deewan Kraft Systems (P) Ltd.: 160 Taxman 343 that the merging of profits and loss of different units are not permissible and, therefore, the deduction on account of business loss of Rs.2,86,336/- of Amaliya Unit II is not permissible on deduction under Section 80IB. The said proposition appears to be unassailable. So far as the substantial question no. 5 as reframed by the Revenue is concerned, we find that both the CIT (Appeals) and the ITAT have held against the Revenue. The Tribunal has rightly held that the sale of scrap is to be treated as receipt from business on which deduction under Section 80HHC has to be allowed since it is not akin to commission, interest or other charges, relying upon the provisions of Explanation (baa) of Sub-Section (4C) of Section 80HHC of the Act and further relying upon the decision of Madras High Court in C.I.T Vs. Ashok Leyland Ltd.: (2008) 297 ITR 107. Learned counsel for the appellants is unable to show that the said explanation is not applicable in the facts and circumstances of the case with regard to the sale of scrap. Thus, on a consideration of the entire facts and circumstances of the case, we do not find that any substantial question of law arises in the present appeal. It is, accordingly, dismissed. (Ramesh Kumar Datta, J) Jagdish/- (Anjana Mishra, J) U