The Commissioner Of Income Tax -Iii,Ludhiana v. M/S Nahar Export Ltd

In the High Court for the States of Punjab and Haryana at Chandigarh… ITA No.164 of 2007 Date of decision: 10.3.2008 The Commissioner of Income Tax -III,Ludhiana .. Appellant Versus M/s Nahar Export Ltd. .. Respondent Coram: Hon’ble Mr.Justice Satish Kumar MittalHon'ble Mr.Justice Rakesh Kumar Garg Present:Mr.Vivek Sethi, Advocatefor the appellant-Revenue. Rakesh Kumar Garg,J 1.The Revenue has filed the present Appeal under Section 260A ofthe Income Tax Act, 1961(for short ‘the Act’) against the order of the Income TaxAppellate Tribunal, Chandigarh Bench ‘B’ Chandigarh dated 31.7.2006 passed inITA No.293/CHANDI/2003 for the Assessment Year 2000-01 raising thefollowing proposed substantial question of law: - i)Whether on the facts and circumstances of the case, theHon’ble ITAT was right in law in holding that unabsorbeddepreciation of earlier years is not to be reduced fromthe profits of the business computed for deduction u/s 80HHC? ii)Whether on the facts and the circumstances of the case,the Hon’ble ITAT was right in law in holding that Sales Tax,and Central Sales Tax be excluded from the total turnover ofthe assessee while computing deduction u/s 80 HHC?Iii)Whether on the facts and the circumstances of the case, the Hon’ble ITAT was right in law in holding that ServiceCharges of dyeing and knitting be excluded from the totalturnover of the assessee while computing deduction u/s 80HHC? 2. At the outset, Shri Vivek Sethi, Advocate, learned counsel for theRevenue has very fairly stated that question No.1 as raised by the departmenthas already been decided against the Revenue by the judgment of Hon’bleSupreme Court of India in the case of Commissioner of Income Tax Vs. ShirkeConstruction Equipments Ltd. (2007) 291 I.T.R. 380 (SC), wherein it has beenheld as under:- “Section 80AB of the Income Tax Act, 1961, specifyingthat profits are those as determined for the purpose of the Act,will apply for determining profits from export business for thepurposes of the deduction under Section 80 HHC. In determining business profits for the deduction underSection 80 HHC the unabsorbed business losses of earlieryears under section 72 should be set off.” He has also conceded that the said judgment of the Hon’ble Supreme Court hasbeen further followed by the Hon’ble Madras High Court in the case ofCommissioner of Income Tax-II Vs. Salzer Electronics Ltd. decided on 3.7.2007.Mr.Sethi has further conceded that question No.2 has also been answeredagainst the Revenue and in favour of the assessee by a judgment of this Courtcited as Commissioner of Income Tax Vs. Vardhman Polytex Ltd. (2006) 203CTR (P&H) 397. He has also admitted that question No.3 as raised by theRevenue also stands decided by this Court in ITA No.503 of 2007(NaharSpinning Mills Ltd. Vs. Commissioner of Income Tax) decided on 25.2.2008against the Revenue and in favour of the assessee. In view of the above stand taken by the learned counsel for theRevenue, no substantial question of law survives for determination of this Court.Hence this appeal is dismissed. (RAKESH KUMAR GARG) JUDGE March 10,2008 nk (SATISH KUMAR MITTAL) JUDGE