Commissioner Of Income-Tax-I, Ludhiana v. M/S R.n.gupta & Co. Ltd

Income-tax Appeal No.630 of 2010 **** IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH Income-tax Appeal No.630of 2010 Date of decision: 16.12.2010 Commissioner of Income-Tax-I, Ludhiana ...Appellant Versus M/s R.N.Gupta & Co. Ltd. ...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 (Oral). 1.This order will dispose of ITA Nos.630, 631, 632, 634,635, 636, 637, 638, 640, 644, 647, 648, 649, 650, 653, 656 and 668of 2010. 2.ITA No.630 of 2010 has been preferred by the revenueunder Section 260A of the Income Tax Act, 1961 against order dated31.8.2009 passed by the Income Tax Appellate Tribunal, ChandigarhBench (A), Chandigarh in ITA No.55/CHANDI/2008 dated 31.8.2009,for the assessment year 2004-05, proposing following substantialquestions of law:- “1.Whether on the facts and circumstances of thecase, the Hon'ble Income Tax Appellate Tribunal isjustified in law in not holding that 90% amount ofcase, the Hon'ble Income Tax Appellate Tribunal isjustified in law in not holding that 90% amount of DEPB was rightly excluded while working “profits ofthe Business” as per explanation (baa) to section80HHC read with clause (iiid) and (iiie) of section 28of the Income Tax Act, 1961 inserted by TaxationLaws (Amendment) Act, 2005? Whether on the facts and circumstances of thecase, the Hon'ble Income Tax Appellate Tribunal isjustified in law in not holding that the whole amountof consideration of DEPB that the assesseereceived is profit, because of the cost of same is Nilto the assessee? Whether on the facts and circumstances of thecase, the Hon'ble Income Tax Appellate Tribunal isjustified in law in not holding that 90% of profit ontransfer of export incentives is not to be increasedwhile computing profits u/s 90HHC(3)(a) as theassessee failed to fulfill the conditions as containedin Third or Fourth proviso inserted by the TaxationLaws (Amendment) Act, 2005 as the export turnoverof the assessee company is more than Rs.10crores? 4.Whether on the facts and circumstances of thecase, the ITAT is right in law in not holding that thetotal sale consideration inclusive of face value ofDEPB and premium amount received thereof 8. represents profit chargeable under sections 28(iiid)and 28(iiie) of the Income Tax Act, 1961? Whether on the facts and circumstances of thecase, the ITAT is right in law in not holding thatprofit on transfer of DEPB entitlement representsthe entire amount inclusive of premium of sale ofsuch DEPB? 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) and 28(iiie) of the Income Tax Act, 1961 means thedifference between the sale price of DEPB and theface value of DEPB ignoring the fact that the entireamount represents the profit in the hands ofassessee? Whether on the facts and circumstances of thecase, the ITAT is right in law in deducting the facevalue of DEPB from sale price of DEPB forcalculating profit under sections 28(iiid) and 28 (iiie)of the Income Tax Act, 1961 as if the face value isthe cost incurred by the assessee to acquire theDEPB? 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) and 28(iiie) of the Income Tax Act, 1961 requires any artificialcost to be interpolated to the extent that the facevalue of DEPB/DFRC should be deducted from thesale proceed for the purpose of determination ofdeduction under section 80HHC of the Income TaxAct, 1961? Whether on the facts and circumstances of thecase, the ITAT is right in law in not appreciating thatdeduction u/s 80HHC of the Income Tax Act, 1961 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) and 28(iiie) of the Income Tax Act, 1961 requires any artificialcost to be interpolated to the extent that the facevalue of DEPB/DFRC should be deducted from thesale proceed for the purpose of determination ofdeduction under section 80HHC of the Income TaxAct, 1961? Whether on the facts and circumstances of thecase, the ITAT is right in law in not appreciating thatdeduction u/s 80HHC of the Income Tax Act, 1961 was rightly computed in accordance withamendment made by the Taxation Laws(Amendment) Act, 2005 with retrospective effectfrom 1.4.1998? Whether on the facts and in law, the Hon'bleIncome Tax Appellate Tribunal was justified insetting aside the issue to the file of the AssessingOfficer for re-adjudication with the directions to theAssessing Officer to decide the issue keeping inmind the decision of the Special Bench in the caseof M/s Topman Exports & others whereas theAssessing Officer had correctly reduced the amountof sale of scrap from the 'profits of the business' andfrom total turnover?” 3.Learned counsel for the revenue states that the matter iscovered by order of this Court dated 13.9.2010 in ITA No.424 of Income-tax Appeal No.630of 2010 **** 2010 (Commissioner of Income-Tax Vs. M/s The Designer). 4.Accordingly, these appeals are disposed in same terms. 5.A copy of this order be placed on the file of each connected case. (Adarsh Kumar Goel) Judge December 16,2010Pka (Ajay Kumar Mittal) Judge