Commissioner Of Income Tax-Lll, Ludhiana v. M/S Nanar Spinning Mills Lta., Ludhiana

ITA No. 201 of 2007 =|. IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH IITA No. 201 of 200/7 Date of Decision: 6.3.27014 | Commissioner of Income Tax-lll, Ludhiana ...Appellant Versus M/s Nanar spinning Mills Lta., Ludhiana ... Respondent CORAM:-HON BLE MR. JUSTICE AJAY KUMAR MITTAL.HON BLE MRS. JUSTICE ANITA CHAUDRRY. PRESENT: Mr. Rajesh Katoch, Advocate for the appellant. Mr. Sanjay Bansal, Senior Advocate with.Ms. Rajni Paul, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1.This appeal has been preferred by the revenue undersection 260A of the Income Tax Act, 1961 (in short “the Act’) against theorder dated 15.5.2006 (Annexure A-4) passed by the Income TaxAppellate Tribunal, Chandigarh Bench ‘A’, Chandigarh (hereinafterreferred to as ‘the Tribunal’) in M.A. No. 341/Chandi/2005 arising out ofITA No. 698/Chandi/2000 for the assessment year 1997-98. 2 The appeal was admitted vide order dated May 30, 2007 fordetermination of the following substantial question of law:- “Whether on the facts and circumstances of the case,the Hon'ble ITAT was right In law in directing the AO to treat the receipts of Rs./,99,88,954/- as _ pe explanation (baa) of Section 8OHHC, for computingdeduction u/s SOHHC, inspite of tne fact thatassessee nimself nas deciared it as Income fromOther Sources’, which has been assessed by the AOunder that head.” 3 The assessee derives income from manufacture and exportof cotton yarn woollen hosiery garments and also trades in cotton yarn.Tne assessee Tiled Its return of income for the assessment year 1997-98on 1.12.199/ declaring Income atL14,/9,/5,930/-. Tne Assessing}Officer vide order dated 18.71.2000 (Annexure A-1) framed theassessment at.L18,91,45,241/-. Feeling aggrieved, the assessee Tiledan appeal before the Commissioner of Income lax (Appeals) who videorder dated 9.6.2000 (Annexure A-2) partly allowed the appeal. Notfeeling satisfied, the assessee filed an appeal before the Tribunal. TheTribunal vide order dated 7.10.2005 (Annexure A-3) partly allowed theappeal. However, the claim of the assessee that interest income of=1,99,88,254/- be assessed as business income and computation ofdeduction under Section 80HHC of the Act be made accordingly wasrejected. Against the said order dated 7.10.2005 (Annexure A-3), theassessee filed an application before the Tribunal who vide order dated15.5.2006 (Annexure A-4) allowed the said application holding that theAssessing Officer should exclude 90% of the gross interest from theprofits of the business for computation of deduction under SectionSOHHC of the Act. Hence, the present appeal by the revenue. 4 Learned counsel for the parties are agreed that subsequentto the decision by the Tribunal for the assessment year in question, I.e.1997-98, similar matter came up for consideration before the Tribunal in ITA No. 201 of 2007 the case of the assessee for the assessment year 2003-04 and In thecase of sister concern M/s Nahar Exports Ltd., Ludhiana for theassessment year 2004-05, where the Iribunal following the judgment ofthe Hon ble Apex Court inHero Exports v. Commissioner of IncomeTax (2007) 295 ITR 454nad adjudicated identical issue vide ordersdated January 28, 2008, December 31, 2007, respectively. It was notdisputed that the orders of the Tribunal referred to in para 4 above havebecome Tinal as no further appeals nave been carried against the same.It was, thus, prayed that order of the Tribunal dated 15.5.2006 be setaside and the matter be remitted to the Tribunal to pass fresh orders inaccordance with law. Ordered accordingly. (AJAY KUMAR MITTAL) JUDGE March 6, 2014gbs (ANITA CHAUDHRY) JUDGE