Passed In Ita v. O/Taxap/14/2006 Judgment

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 14 of 2006 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH - sd/-and HONOURABLE MR.JUSTICE R.P.DHOLARIA sd/- =============================================COMMISSIONER OF INCOME TAX....Appellant(s)VersusNACHMO MARKETING PVT. LTD.....Opponent(s) ============================================= Appearance:MR.VARUN K.PATEL, ADVOCATE for the Appellant(s) No. 1MRS SWATI SOPARKAR, ADVOCATE for the Opponent(s) No. 1 ============================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAHandHONOURABLE MR.JUSTICE R.P.DHOLARIADate : 30/11/2013 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0.Leave to replace Annexure B. 2.0.Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal, Ahmedabad (hereinafter referred to as the “ITAT”) dated 29.12.2004 passed in ITA No. 590/AHD/1998 for the AY 1988-89, the revenue has preferred present Tax Appeal to consider the following substantial question of law. “Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT(A) holding that deduction under Section 80HH and 80I was allowable on gross total income including compensation received by the assessee on account of breach of contract?” 3.0.Having heard Shri Varun Patel, learned advocate for the revenue and Shri S.N. Soparkar, learned Senior Advocate for the respondent-assessee and considering the impugned judgment and order passed by the learned ITAT, it appears that the Appellate Tribunal has dismissed the said appeal preferred by the revenue by observing that the issue in controversy is covered by the decision of the Bombay High Court in the case of Nima Specific Trust reported in 248 ITR 29 and the decision of the Madhya Pradesh High Court in the case of J.P. Tobacco Products (P) Ltd vs. CIT M.P reported in (1998) 229 ITR 123. It is required to be noted that as such the issue before the learned Appellate Tribunal was with respect to the deduction under Section 80HH and 80I was allowable on gross total income including compensation received by the assessee on account of breach of contract or not. On considering the decision of the Bombay High Court in the case of Nima Specific Trust (supra) and the decision of the Madhya Pradesh High Court in the case of J.P. Tobacco Products (P) Ltd (supra), it appears that no such issue was there in the aforesaid cases. Under the circumstances, learned Tribunal has materially erred in relying upon those decisions. Apart from that, even there is no discussion at all by the learned Tribunal with respect to the issue involved i.e. Whether the deduction under Section 80HH and 80I was allowable on gross total income including compensation received by the assessee on account of breach of contract or not. Under the circumstances, the impugned judgment and order passed by the learned Tribunal deserves to be quashed and set aside and the matter is to be remitted to the file of the learned ITAT to consider the aforesaid issue afresh in accordance with law and on merits. 4.0.In view of the above, present appeal succeeds. The impugned judgment and order passed by the ITAT dated 29.12.2004 passed in ITA No. 590/AHD/1998 is hereby quashed and set aside and the matter is remitted to the learned Tribunal to decide the issue involved i.e. Whether the deduction under Section 80HH and 80I was allowable on gross total income including compensation received by the assessee on account of breach of contract or not afresh. Appeal is allowed to the aforesaid extent. sd/-(M.R.SHAH, J.) Kaushik sd/-(R.P.DHOLARIA,J.)