The Commissioner Of Income Tax-Ii v. M/S Perfect Forgings

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.849 of 2010 (O&M)Date of decision: 17.2.2011 The Commissioner of Income Tax-II. Vs. M/s Perfect Forgings. -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Denesh Goyal, Standing Counselfor the appellant. --- ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the revenue underSection 260-A of the Income Tax Act, 1961 (for short, “the Act”)against the order of the Income Tax Appellate Tribunal,Chandigarh in I.T.A. No.308/CHANDI/2008 for the assessmentyear 2004-05 proposing to raise following substantial questions of law:- “(i)Whether on the facts and circumstances of the case,the ITAT was right in law in not holding that total saleconsideration inclusive of face value of DEPB and premiumamount received thereof represents profit chargeable undersections 28(iiid) and 28(iiie) of the Income Tax Act, 1961? (ii)Whether on the facts and circumstances of the case,the ITAT was right in law in not holding that profit ontransfer of DEPB entitlement represents the entire amountinclusive of premium of sale of such DEPB? (iii)Whether on the facts and circumstances of the case,the ITAT was right in law in holding that the word “profit”referred to in Sections 28(iiid) and 28(iiie) of the IncomeTax Act, 1961 means the difference between the sale price of DEPB and the face value of DEPB ignoring the fact thatthe entire amount represents the profit in the hands ofassessee? (iv)Whether on the facts and circumstances of the case,the ITAT was right in law in deducting the face value ofDEPB from sale price of DEPB for calculating profit underSections 28(iiid) and 28(iiie) of the Income Tax Act, 1961 asif the face value is the cost incurred by the assessee toacquire the DEPB? (v)Whether on the facts and circumstances of the case,the ITAT was right in holding that the word profit referred toin Sections 28(iiid) and 28(iiie) of the Income Tax Act, 1961requires any artificial cost to be interpolated to the extentthat the face value of DEPB/DFRC should be deductedfrom the sale proceed for the purpose of determination ofdeduction under Section 80HHC of the Income Tax Act,1961? (vi)Whether on the facts and circumstances of the case,the ITAT has failed to appreciate that deduction u/s 80HHCof the Income Tax Act, 1961 was rightly computed inaccordance with amendment made by the Taxation Laws(Amendment) Act, 2005 with retrospective effect from01.04.1998?” 2. Learned counsel for the appellant states that thematter is covered in favour of the revenue by orders of this Courtdated 16.8.2010 in I.T.A. No.301 of 2010 CITv. M/s VictorForgingsand I.T.A. No.299 of 2010CITv. F.C. Sondhi, whereinafter noticing the judgment of the Bombay High Court inCIT v.Kalpataru Colours & Chemicals2010 (42) DTR 193, the matterwas remanded to the Tribunal for fresh decision in accordancewith law. 3. Since we find that the matter is covered by earlierorders of this Court, we dispose of this appeal in same terms.For this purpose, we have not considered it necessary to issue notice to the respondent, but we give liberty to the respondent tomove this Court if they have any grievance against this order. (ADARSH KUMAR GOEL) JUDGE February 17, 2011ashwani ( AJAY KUMAR MITTAL ) JUDGE