Oswal Woollen Mills Limited v. Commissioner Of Income Tax (Central) Ludhiana

IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH I.T.A. No.166 of 2002 Date of Decision:22.05.2013 Oswal Woollen Mills Limited .....Appellant Vs. Commissioner of Income Tax (Central) Ludhiana .....Respondent CORAM:- HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MS. JUSTICE RITU BAHRI Present:-None for the appellant. Mr. Rajesh Katoch, Advocate,for the respondent. HEMANT GUPTA, J.(Oral) The present appeal under Section 260-A of the Income Tax Act, 1961 (for short, 'the Act') arises out of an order passed by Income TaxAppellate Tribunal, Chandigarh Bench `A', Chandigarh (for short 'theTribunal') for the assessment year 1992-93. After going through the record, we find that the followingsubstantial question of law arises for consideration of this Court: “Whether on a proper interpretation of the provisions of Section80HHC of the Act, the Ld. ITAT was, on facts and circumstances inthe case of the appellant, justified in holding that appellant, herein,was not entitled to deduction when the figure of profits of businesswas negative? The issue; whether the assessee is entitled to deduction when figure of profit of business is in negative, has been subject to considerationbefore Hon'ble the Supreme Court in judgment reported as IPCA LaboratoryLtd. Vs. Deputy Commissioner of Income Tax (2004) 266 ITR 521, wherein I.T.A. No.166 of 2002 it was held to the following effect: “We are unable to accept the submission of Mr. Dastur. Undoubtedlysection 80HHC has been incorporated with a view to providingincentive to export houses. Even though a liberal interpretation hasto be given to such a provision the interpretation has to be as per theworking of this section. If the wordings of the section are clear thenbenefits, which are not available under the section, cannot beconferred by ignoring or misinterpreting words in the section. In thiscase we are concerned with the wordings of sub-section (3)(c) ofsection 80HHC. As noted earlier sub-section (3)(a) deals with thecase where the export is only of self manufactured goods. Sub-section 3(b) deals with the case where the export is only of tradinggoods. Thus when the Legislature wanted to take exports from selfmanufactured goods or trading goods separately, it has already soprovided in sub-sections (3)(a) and (3)(b). It would not be deniedthat the word “profit” in section 80HHC(1) and sections 80HHC(3)(a) and (3)(b) means a positive profit. In other words if there is aloss then no deduction would be available under section 80HHC(1)or (3)(a) or loss then no deduction would be available under section80HHC(1) or (3)(a) or (3)(b)......” In view of the said judgment, we do not find that the assessee is entitled to deduction in the facts and circumstances of the case. Consequently, the question of law is answered against the assessee. ( HEMANT GUPTA ) JUDGE May 22, 2013renu/Vimal ( RITU BAHRI ) JUDGE