O/Taxap/722/2007 Judgment v. Madhusudan Industries Ltd Has Held As Under

O/TAXAP/722/2007 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 722 of 2007 With TAX APPEAL NO. 723 of 2007 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ?the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ?to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================THE ASSISTANT COMMISSIONER OF INCOME TAX....Appellant(s)Versus M/S. MADHUSUDAN SILK MILLS PRO. OF MADHUSUDAN INTERNATION....Opponent(s) ================================================================ Appearance: MR SUDHIR M MEHTA, ADVOCATE for the Appellant(s) No. 1RULE SERVED for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERIandHONOURABLE MR.JUSTICE K.J.THAKER Date : 23/12/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned orders passed by the Income Tax Appellate Tribunal, Ahmedabad Bench (hereinafter referred to as ‘the Tribunal’) dated 05.11.2006 in ITA Nos. 3945/Ahd/2003 & 3946/Ahd/2003 for the Assessment Years 2000-01 & 2001-02 respectively, the revenue has preferred the present Tax Appeals. 1.1These appeals were admitted by this Court for consideration of the following substantial question of law: “Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in coming to the conclusion that local sales made by the assessee are required to be excluded from the total turn-over of the assessee for calculating deduction available under Section 80HHC of the Income Tax Act?” 2.The assessee had claimed deduction under section 80HHC of the Act. During the course of assessment proceedings the Assessing Officer held that the assessee had not incorporated tun over of local sales in the profit and loss account as required by the provisions of section 80HHC of the Act and therefore deduction was not as per the provisions of the said section. The Assessing Officer accordingly assessed the income of the assessee by clubbing the total turn over of the two units of the assessee to arrive at deduction under section 80HHC of the Act. 2.1Being aggrieved by the same, the assessee filed appeal before CIT(A). The CIT(A) allowed the appeal. The revenue therefore preferred appeal before the Tribunal. The Tribunal dismissed the appeal and confirmed the findings of the CIT(A). Being aggrieved by the said order, the present appeals are preferred by the revenue. 3. The question of law raised for consideration in the present Tax Appeals is now not res integra in view of the decision of this Court dated 15.11.2006 rendered in Tax Appeal No. 778 of 2006. This Court in the case of very same group of companies viz.Commissioner of Income Tax vs. Madhusudan Industries Ltd has held as under: “Heard Shri Tanvish Bhatt, learned counsel for the appellant. The following substantial question of law is proposed for admission of this appeal. “Whether the Appellate Tribunal was right in law and on facts in allowing the deduction u/s 80HHC of the Income Tax Act, 1961, turn over of the three units and not all the units as held by the Assessing Officer ?” 3. The question of law raised for consideration in the present Tax Appeals is now not res integra in view of the decision of this Court dated 15.11.2006 rendered in Tax Appeal No. 778 of 2006. This Court in the case of very same group of companies viz.Commissioner of Income Tax vs. Madhusudan Industries Ltd has held as under: “Heard Shri Tanvish Bhatt, learned counsel for the appellant. The following substantial question of law is proposed for admission of this appeal. “Whether the Appellate Tribunal was right in law and on facts in allowing the deduction u/s 80HHC of the Income Tax Act, 1961, turn over of the three units and not all the units as held by the Assessing Officer ?” Whether turn over of three units for the purpose of computing deduction u/s 80HHC of the I.I.Act, 1961 was required to be considered or not, the Tribunal has considered the aspects as under : “We have heard the ld. Representatives of the parties and perused the record. The assessee has claimed deduction u/s 80HHC amounting to Rs.56,44,975/- which was claimed regarding Export made from Unit I, II, & III of the Sanitaryware division. It has been noticed that the A.O. has considered the total turnover of all the units of the Sanitaryware division for the purpose of computation of deduction u/s 80HHC including the sales of Vanaspati, Soap, Oil de-oiled cakes etc. of Vanaspati division, sales of glazed, unglazed and broken tiles of the Tiles Division and sales of paper regarding the Trading Division, in the total turnover, while computing deduction u/s. 80HHC of the I.T.Act. From the order of the CIT (A), it has been noticed that the A.O. should have considered only the total turnover of these three units, as done by the A.O. in assessment orders for the A.Ys.1991-92 & 1992-93. It has also been noticed that the A.O. had without discussion this issue in the assessment order and without giving any reason has considered the total turnover of all the units of the various divisions, while computing deduction u/s 80HHC. In view of the decisions cited by ld. AR, we find that the CIT(A) has correctly directed the A.O. to consider only the total turnover of the Units I, II & III of the Sanitaryware division, for the purpose of computing deduction u/s 80HHC. Under the circumstances, we do not find any error in the order of the CIT (A). Therefore, same is confirmed.” The admitted facts are that even in the preceding year, the turnover of the said three units were considered for deduction under Section 80HHC of the I.T.Act. Otherwise also, whether the benefits should be given in respect of the turnover of three units for the purpose of Section 80HHC or not, is basically question of facts. No substantial question of law does arise, nor it has been shown that the finding is perverse. No interference is called for.The appeal stands dismissed at the admission stage.” 4. Having heard learned advocates for the revenue and the question posed for consideration before us reproduced hereinabove and considering the decision cited, the question which is raised in the present appeals is required to be answered in favour of the assessee. We are not giving further elaborate reasons for the same as this Court in the case of the very same assessee has answered the very same question in favour of assessee. 5. In view of the above, the question raised in the present appeals is answered in favour of the assessee and consequently, the impugned judgment and order passed by the ITAT is confirmed. We hold that the Tribunal is right in coming to the conclusion that local sales made by the assessee are required to be excluded from the total turn-over of the assessee for calculating deduction available under Section 80HHC of the Income Tax Act. Hence, the present Tax Appeals are accordingly dismissed. (K.S.JHAVERI, J.) divya (K.J.THAKER, J)