The Commissioner Of Income Tax, Karnal v. M/S Om Overseas, Shiv Nagar, Panipat

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No.698 of 2010Date of decision: 31.1.2011 The Commissioner of Income Tax, Karnal -----Appellant Vs. M/s Om Overseas, Shiv Nagar, Panipat ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOELHON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Yogesh Putney, Sr.Standing Counsel for the revenue. Adarsh Kumar Goel,J. 1.This order will dispose of ITA Nos.698 and 718 of 2010 as it hasbeen stated by learned counsel for the revenue that both the appeals involvecommon questions. 2. ITA No. 698 of 2010 has been preferred by the revenue underSection 260A of the Income Tax Act, 1961 (for short, ‘the Act’) against the orderof the Income Tax Appellate Tribunal, Delhi bench ‘B’ New Delhi passed in ITANo.2724/Del/2009 dated 29.1.2010 for the assessment year 2002-03, claimingfollowing substantial questions of law:- “i) Whether on the facts and circumstances of the case and inlaw, the learned ITAT was right in holding that the CIT(A) hadduly put all the objections and documents to all the parties fortheir comments, it cannot be said that there was violation ofprovisions contained in Rule 46A of the Income Tax Rules,1962, despite the fact that opportunity was given by the AOunder section 142A(3) of the Income Tax Act, 1961 to theassessee during the course of assessment proceedings and anyevidence if any or objections to the DVO’s report was to besubmitted before the AO which was not done and that the assessee was not eligible to produce new evidence for the firsttime before the CIT(A) and also not appreciating the fact thatthere is no provision for a revised report under section 142A ofthe Income Tax Act, 1961? ii) Whether on the facts and circumstances of the case and inlaw, the learned ITAT was right in law in observing that therewas no violation of Rule 46A of the Income Tax Rules, 1962,despite the fact that none of the conditions prescribed under rule46A were satisfied by the assessee for admission of additionalevidence in as much as there was no occasion where (a) the AOrefused to admit the evidence, (b) or the assessee was preventedby sufficient cause from producing the evidence which wascalled upon to be produced by the AO, (c) or the assessee wasprevented by sufficient cause for producing before the AO anyevidence which is relevant to the ground of appeal, (d) or the AOpassed the assessment order without giving the assesseesufficient opportunity to adduce evidence relevant to any groundof appeal? iii) Without prejudice to the above, whether on the facts and inthe circumstances of the case, the learned ITAT is right inarriving at the conclusion that a sum of Rs.91,30,355/- on‘Humidification Plant’ and Rs.1,20,01,718/- under the head‘Trenches’ considered by the DVO’s subsequent invalid report,be treated as investment and holding that the investment made inthe building account under the head ‘Humidification Plant’ and‘Trenches’ considered for allowing relief to the assessee iscompletely ignoring the provision of section 142A of the IncomeTax Act? iv) Whether in the facts and circumstances of the case and inlaw, the learned ITAT is right in quashing the assessment madeby the AO under section 143(3)/147 of the Income Tax Act,1961, rightly reopened by the AO after obtaining approval fromthe CIT within the stipulated time allowed under section 151(1) of the income Tax Act, 1961 ignoring the proviso below section147 read with explanation (1) there under? v) Whether on the facts and in the circumstances of the case, thelearned ITAT was justified in allowing deduction under section80-HHC on the face value of DEPB in the case where turnoverexceeds Rs.10 crores in view of the proviso (ii), (iii) and (iv)inserted by the Taxation Law (Amendment) Act, 2005 withretrospective effect from 1.4.1998? iv) Whether in the facts and circumstances of the case and inlaw, the learned ITAT is right in quashing the assessment madeby the AO under section 143(3)/147 of the Income Tax Act,1961, rightly reopened by the AO after obtaining approval fromthe CIT within the stipulated time allowed under section 151(1) of the income Tax Act, 1961 ignoring the proviso below section147 read with explanation (1) there under? v) Whether on the facts and in the circumstances of the case, thelearned ITAT was justified in allowing deduction under section80-HHC on the face value of DEPB in the case where turnoverexceeds Rs.10 crores in view of the proviso (ii), (iii) and (iv)inserted by the Taxation Law (Amendment) Act, 2005 withretrospective effect from 1.4.1998? vi) Whether on the facts and in the circumstances of the case, thelearned ITAT was justified in allowing deduction under section80HHC in respect of entire DEPB amount by incorporating thesame in the computation of business profit under section 28(iiib)? vii) Whether on the facts and in the circumstances of the case,the learned ITAT was justified in placing reliance upon thedecision of Income tax Appellate Tribunal, Special Bench,Mumbai in the case of M/s Topman Exports v. ITO (2009) –TOIL 531 ITAT dated 1.8.2009 despite the fact that the decisionof the Mumbai ITAT Special Bench in the case of TopmanExport, supra has been reversed by the decision of the Hon’bleBombay High Court in the case of CIT v. Kalpataru Colours andChemical, 2010 –TOIL- 482 HC-Mum?” 3. It has been fairly stated by learned counsel for the revenue thatquestions (i) to (iv) are covered against the revenue by order passed today in ITANo.692 of 2010 The Commissioner of Income Tax, Karnal v. M/s Om Overseas, Shiv Nagar, Panipat. Accordingly, the said questions cannot be held to besubstantial questions of law. 4.As regards Questions (v) to (vii), it is submitted that the matter iscovered by earlier order of this Court dated 16.8.2010 in ITA No.299 of 2010, CIT v. M/s F.C.Sondhi and Company (P) Limited, remanding these issues forfresh decision to the Tribunal. In view of earlier order of this Court, the matter isremanded to the Tribunal for fresh decision on the issue involved in the saidquestions. If the assessee is aggrieved by this order, it will be at liberty to movethis Court. 5.Both the appeals are disposed of. (Adarsh Kumar Goel) Judge January 31, 2011‘gs’ (Ajay Kumar Mittal) Judge