Ita/426/2006 Of The Commr.of Income Tax-Iii Ldh v. M/S Nahar Spinning Mills Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITA No.426 of 2006Date of decision: 2&.7.2014 Commissioner of Income Tax III, Ludhiana Vs, .-...- Appe M/s Nahar Spinning Mills Limited, 373, LAA, Ludhiana ..... Respond CORAM: HON BLE MR. JUSTICK AJAY KUMAR MITTALHON BLE MR. JUSTICE JASPAL SINGH Present: Mr. Sanjay Bansal, Sr. Advocatewith Ms. Rajni Pal, Advocate for the appellant, Mr. Rajesh Katoch, Advocate for the respondent. Ajay Kumar Mittal,J, 1.This order shall dispose of ITA Nos.426 and 428 of 2006 asaccording to the learned counsel for the parties, the substantial question oflaw raised in both the appeals is identical. However, the facts are beingextracted from ITA No.426 of 2006. 2 |ITA No.426 of 2006 has been preferred by the revenue underSection 260A of the Income Tax Act, 1961 (in short, “the Act”) against theorder dated 24.10.2005, Annexure 3 passed by Income Tax AppellateTribunal, Chandigarh Bench, ‘A’(in_ short, “the ‘Tribunal’) iM.A.No.180/Chandi1/2005 arising out of ITA No.1026/Chandi/1998 for th assessment year 1995-96 claiming following substantial question of law:- “Whether on the facts and the circumstances of the case, theHon’ble ITAT was right 1n law in holding that service chargesof dyeing and knitting amounting to-7,38,90,128/- beexcluded from the total turnover of the assessee whilecomputing deduction under section 80HHC? 3]A few facts relevant for the decision of the controversyinvolved as narrated in ITA No.426 of 2006 may be noticed. The respondentis a limited company. It filed its return of income for the assessment year1995-96 showing income of |-14,41,02,270/-. The assessee is amanufacturer and exporter of cotton yarn, woolen hosiery garments and alsotrades in cotton yarn. The assessment was framed by the AssistantCommissioner of Income Tax, Central Circle V, Ludhiana on 17.3.1998,Annexure | at income of.L14,46,36,553/-. Deduction under section SOHHCof the Act was reduced as service charges to the tune of=7,38,90,128/- wereincluded in the total turnover for the computation of deduction underSection 80HHC of the Act. Aggrieved by the order, the assessee filed appealbefore the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide orderdated 24.8.1998, Annexure A.2, the CIT(A) dismissed the appeal. Theassessee filed further appeal before the Tribunal. Vide order dated29.4.2005, Annexure 4, the Tribunal partly allowed the appeal. Feelingagerieved, the assessee filed miscellaneous application before the Tribunal.Vide order 24.10.2005, Annexure 3, the Tribunal modified the order dated29.4.2005 holding that service charges amounting to “a7,38,90,128/- beexcluded from the total turnover for the purpose of computing deductionunder Section 80HHC of the Act. Hence the instant appeals by the revenue.GURBAX SINGHAALearned counsel for the parties aread idemthat the issue herein2014.08.06 13:31I attest to the accuracy andintegrity of this documentHigh Court Chandigarh ITA No.426 of 2006 stands concluded by the decision of this Court dated 6.3.2014 in ITA No.98of 2008 in the case of the assessee (Commissioner of Income Tax I,Ludhiana v M/s Nahar Spinning Mills Limited, Ludhiana)4]In view of the above, the appeals are disposed of in the sameterms as in ITA No.98 of 2008. (Ajay Kumar Mittal)vudge July 28, 2014 .4 g (Jaspal Singh)Judge