Commissioner Of Income Tax, Jaipur-Ii, Jaipur v. M/S Autolite (India) Ltd. D

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 365 / 2005 Commissioner of Income Tax, Jaipur-II, Jaipur. ----Appellant Versus M/S Autolite (India) Ltd. D-459, Road No.9A VKI Area, Jaipur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. R.B. MathurFor Respondent(s) : Mr. Vivek Singhal _____________________________________________________ HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE MAHENDRA MAHESHWARIJudgment Per Hon’ble Jhaveri, Acting CJ.21/03/2017 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal preferred by the department and confirmedthe order of the CIT(A). 2.This Court while admitting the appeal on 02.01.2006 hasframed the following substantial questions of law: “1.Whetherinthefactsandcircumstances of the case the ITAT andCIT(A) were justified in law and have notacted perversely in allowing the deductionsof Rs.77,55,049/- the assessee u/s. 80IAwhen the assessee has failed to prove that ithas established a new unit and even notmaintained separate books of accounts forthe alleged new unit. 2.Whetherinthefactsandcircumstances of the case, without prejudiceto above the ITAT & CIT(A) were justified in law in allowing the total deductions u/s. 80IAwithout reducing the benefit u/s. 80HHCalready granted and the same amount todouble deductions on the same income.” 3.Counsel for the appellant has contended that the issue issquarely covered by the decision of this Court in the case ofCommissioner of Income Tax, Jaipur-II, Jaipur vs. M/s Modern Threads (I) Ltd. in DB Income Tax AppealNo.337/2008 decided on 08.02.2017, wherein this court haspassed the following order: “1. By way of this appeal, the appellant hasassailed the judgment & order of the Tribunalwhereby the Tribunal has dismissed theappeal preferred by the department. assailed the judgment & order of the Tribunalwhereby the Tribunal has dismissed theappeal preferred by the department. 2. This Court while admitting the matterdated 3rd November, 2008, framed thefollowing question of law:- “i) Whether in the facts and circumstances ofthe case the ITAT and CIT(A) were justifiedin law and have not acted perversely inallowing the deductions u/s 801 & 80HHwhen the assessee has not maintainedseparate books of accounts for claimingdeduction which cannot be ascertained? ii) Whether in the facts and circumstances ofthe case, the assessee can be entitled fordeductions u/s 80I on the gross total amountbefore deductions u/s 80HH of the IT Act?”(2 of 4) 3. Counsel for the appellant contended thatin view of the decision of Gujarat High Courtin the case of Transpek Silox Industry Ltd.vs. Deputy Commissioner of Income TaxCircle 4 decided on 25th July, 2016 whereinit has been held as under:- “28. It is true, as pointed out by the counselfor the assessee that in different provisionsthe Legislature has used different languagefor restricting or limiting the claim ofdeductions. The use of language in statutoryprovisions in such complex situations mustbe peculiar to every situation the Legislaturemay seek to meet with. Merely because insome of the provisions certain disallowancesare expressed in different language would not by itself mean that sub-section (9) ofsection 80IA was aimed to have restrictedand limited scope of application. 3. Counsel for the appellant contended thatin view of the decision of Gujarat High Courtin the case of Transpek Silox Industry Ltd.vs. Deputy Commissioner of Income TaxCircle 4 decided on 25th July, 2016 whereinit has been held as under:- “28. It is true, as pointed out by the counselfor the assessee that in different provisionsthe Legislature has used different languagefor restricting or limiting the claim ofdeductions. The use of language in statutoryprovisions in such complex situations mustbe peculiar to every situation the Legislaturemay seek to meet with. Merely because insome of the provisions certain disallowancesare expressed in different language would not by itself mean that sub-section (9) ofsection 80IA was aimed to have restrictedand limited scope of application. 29. The contention that no such matchingprovision was made in section 80HHC of theAct would clearly indicate the Legislativeintent also, in our opinion, is not a validargument. Sub-section (9) of section 80IAwas enacted to have universal application toall deductions under sub-chapter C ofChapter VI. It was neither possible norexpected of the Legislature to makeindividual matching provisions in largenumber of statutory provisions recognizingdeductions under various situations. Suchprovisions are often times made for a limitedperiod, new deductions are introduced fromtime to time and old deductions withdrawn.31. We are unable to follow the line of logicadopted by the Bombay High Court in case ofAssociated Capsules P. Ltd. (supra) thatsection 80IA(9) of the Act in the context ofsection 80HHC would operate not at thestage of computation but at the stage ofallowing the deduction. In plain terms sub-section (9) of section 80IA disentitles anassessee from claiming deduction under anyother provision of sub-chapter C to theextent deduction is already claimed andallowed for certain profit or gain of anundertaking or enterprise under section80IA. Such provision, therefore, would haveto be applied at the very stage to assessee'sclaim for deduction under section 80HHC ofthe Act is considered. While computing suchdeduction the effect of sub-section (9) ofsection 80IA would have to be given. We donot think that in the process we are tinkeringwith the formula for computation of eligibleprofit for deduction under section 80HHC ofthe Act. We have noticed that differentformulaehavebeenprovidedformanufacturing exporter and trader and in (3of 4) case of an assesseewhose exports comprise of both the sources.It is, therefore, at the stage of sub-section(3) of section 80HHC effect of sub-section(9) of section 80IA would apply. It is truethat clause (baa) to explanation to section80HHC defines a term `profits of thebusiness'. While working out the businessprofits as specified therein, in terms of sub-section (9) of section 80IA the profit or gainwhich had already been allowed deduction to the extent mentioned therein would have tobe ignored.” 6. In view of above observations of thisCourt, present appeals are dispose of andthe questions posed for our consideration aredecided in favour of the revenue and againstthe assessee. However, the Assessing Officermay give effect to this order only after thedecision of the Larger Bench of the SupremeCourt in the case referred to it by thedecision reported in [2016] 380 ITR 1 (SC).Accordingly, the issue is decided in favour ofthe revenue and against the assessee,subject to the decision of the Supreme Court.4. The same view was taken by this Court inTax Appeal No. 185/2004 (Vijay Solvex Ltd.vs. Commissioner of Income Tax) reported in[2014] 31 ITR 382 (Raj.), wherein the viewwas taken in favour of the department. the extent mentioned therein would have tobe ignored.” 6. In view of above observations of thisCourt, present appeals are dispose of andthe questions posed for our consideration aredecided in favour of the revenue and againstthe assessee. However, the Assessing Officermay give effect to this order only after thedecision of the Larger Bench of the SupremeCourt in the case referred to it by thedecision reported in [2016] 380 ITR 1 (SC).Accordingly, the issue is decided in favour ofthe revenue and against the assessee,subject to the decision of the Supreme Court.4. The same view was taken by this Court inTax Appeal No. 185/2004 (Vijay Solvex Ltd.vs. Commissioner of Income Tax) reported in[2014] 31 ITR 382 (Raj.), wherein the viewwas taken in favour of the department. 5. However, counsel for the respondentcontended that earlier different view wastaken by this Court reported in 271 ITR 444(Commissioner of Income Tax vs. Rochiram &Sons) and in Tax Appeal No. 110/2006(Commissioner of Income Tax vs. VijaySolvex Ltd.) decided on 17th March, 2015. 6. We have heard both the sides. 7. Taking into consideration two DivisionBench judgments which were confirmed bythe Hon’ble Supreme Court and therefore,the subsequent Division Bench rightlyfollowed the earlier decision. The judgmentwhich has been cited of Vijay Solvex Ltd. vs.Commissioner of Income Tax decided on 6th(4 of 4) January, 2014 hasnot referred the earlier judgment which wasconfirmed by the Hon’ble Supreme Court. 8. In view of the above, it is well settledposition that the earlier view which wasconfirmed by the Hon’ble Supreme Court isrequired to be followed since other DivisionBench has not followed the earlier decisions.9. In that view of the matter, the issue isanswered in favour of the assessee andagainst the department subject to the viewwhich is also referred to Larger Bench as perthe order of the Hon’ble Supreme Courtreported in [2016] 380 ITR 1 (SC).Therefore, parties will be abide by thedecision of the Hon’ble Supreme Court whichis subject to applicability of the provision forthe relevant assessment year. The appealstands disposed off ” 4.However, counsel for the respondent has relied upon thedecision of this Court in the case of Commissioner of IncomeTax vs. Rochiram and Sons Meena Y.R. and ShashikantSharma JJ. [2004] 271 ITR 0444. 5.We have heard counsel for the parties. 6.At present the issue is squarely covered by the decision ofthis Court in the case of Commissioner of Income Tax, Jaipur- II, Jaipur vs. M/s Modern Threads (I) Ltd. in DB Income Tax Appeal No.337/2008 (supra) wherein after consideringthe two Division Bench judgment which were confirmed by theSupreme Court, the Division Bench followed the earlier decision.The matter was referred to the Larger Bench of the SupremeCourt in a case reported in [2016] 380 ITR 1 (SC). 7.In view of the facts and circumstances of the case and theobservations, the issues are decided in favour of the assessee andagainst the department subject to the decision of the SupremeCourt which is pending before the Supreme Court. 8.The appeal stands disposed of. (MAHENDRA MAHESHWARI),J. (K.S. JHAVERI)ACTING C.J. bblm20