Commissioner Of Income Tax-I, Ludhiana v. M/S Jacob Export House

ITA No. 620 of 2010 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 620 of 2010 Date of Decision: 19.11.2010 Commissioner of Income Tax-I, Ludhiana ....Appellant. Versus M/s Jacob Export House ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Rajesh Katoch, Advocate for the appellant. ADARSH KUMAR GOEL, J. 1.This appeal has been preferred by the revenue underSection 260A of the Income Tax Act, 1961 against order dated31.8.2009 passed by the Income Tax Appellate Tribunal, ChandigarhBench “A” in ITA No. 346/CHANDI/2008, for the assessment year 2001-02, proposing following substantial questions of law:- “(i)Whether on the facts and circumstances of thecase, the Hon'ble Income Tax AppellateTribunal is justified in law in not holding that90% amount of DEPB was rightly excludedwhile working “Profits of the Business” as perexplanation (baa) to section 80HHC read withclause (iiid) and (iiie) of section 28 of the (ii) (iii) (iv) Income Tax Act, 1961 inserted by TaxationLaws (Amendment) Act, 2005? Whether on the facts and circumstances of thecase, the Hon'ble Income Tax AppellateTribunal is justified in law in not holding that thewhole amount of consideration of DEPB thatthe assessee received is profit, because of thecost of same is Nil to the assessee? Whether on the facts and circumstances of thecase, the Hon'ble Income Tax AppellateTribunal is justified in law in not holding that90% of profit on transfer of export incentives isnot to be increased while computing profits u/s80HHC(3)(a) as the assessee failed to fulfil theconditions as contained in Third or Fourthproviso inserted by the Taxation Laws(Amendment) Act, 2005 as the export turnoverof the assessee company is more than Rs.10crores? Whether on the facts and circumstances of thecase, the ITAT is right in law in not holding thatthe total sale consideration inclusive of facevalue of DEPB and premium amount receivedthereof represents profit chargeable undersections 28(iiid) and 28(iiie) of the Income TaxAct, 1961? (v) Whether on the facts and circumstances of thecase, the ITAT is right in law in not holding thatprofit on transfer of DEPB entitlementrepresents the entire amount inclusive ofpremium of sale of such DEPB? (vi) Whether on the facts and circumstances of thecase, the ITAT is right in law in holding that theword “profit” referred to in sections 28(iiid) and28(iiie) of the Income Tax Act, 1961 means thedifference between the sale price of DEPB andthe face value of DEPB ignoring the fact thatthe entire amount represents the profit in thehands of assessee? (vii) Whether on the facts and circumstances of thecase, the ITAT is right in law in deducting thefare value of DEPH from sale price of DEPB forcalculating profit under sections 28(iiid) and 28(iiie) of the Income Tax Act, 1961 as if the facevalue is the cost incurred by the assessee toacquire the DEPB? (viii) Whether on the facts and circumstances of thecase, the ITAT is right in holding that the wordprofit referred to in sections 28(iiid) and 28(iiie)of the Income Tax Act, 1961 requires anyartificial cost to be interpolated to the extentthat the face value of DEPB/DFRC should be ITA No. 620 of 2010 deducted from the sale proceed for thepurpose of determination of deduction undersection 80HHC of the Income Tax Act, 1961?(ix)Whether on the facts and circumstances of thecase, the ITAT is right in law in notappreciating that deduction u/s 80HHC of theIncome Tax Act, 1961 was rightly computed inaccordance with amendment made by theTaxation Laws (Amendment) Act, 2005 withretrospective effect from 01.04.1998?” 3.Learned counsel for the revenue states the matter iscovered by order of this Court dated 13.9.2010 in ITA No. 424 of 2010(Commissioner of Income Tax v. M/s The Designer).4.Accordingly, the appeal is disposed of in same terms. ITA No. 620 of 2010 deducted from the sale proceed for thepurpose of determination of deduction undersection 80HHC of the Income Tax Act, 1961?(ix)Whether on the facts and circumstances of thecase, the ITAT is right in law in notappreciating that deduction u/s 80HHC of theIncome Tax Act, 1961 was rightly computed inaccordance with amendment made by theTaxation Laws (Amendment) Act, 2005 withretrospective effect from 01.04.1998?” 3.Learned counsel for the revenue states the matter iscovered by order of this Court dated 13.9.2010 in ITA No. 424 of 2010(Commissioner of Income Tax v. M/s The Designer).4.Accordingly, the appeal is disposed of in same terms. (ADARSH KUMAR GOEL) JUDGE November 19, 2010gbs (AJAY KUMAR MITTAL) JUDGE