The Commissioner Of Income-Tax, Karnal v. M/S Spartan Trends Inc. Mahajan House, Lake Road, Panipat

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No. 148 of 2008DATE OF DECISION : 17.07.2008 The Commissioner of Income-tax, Karnal .... APPELLANT Versus M/s Spartan Trends Inc. Mahajan House, Lake Road, Panipat ..... RESPONDENT CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTALHON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH Present:Mr. Sanjeev Kaushik, Advocate, for the appellant-revenue.* * * SATISH KUMAR MITTAL , J. The assessee, who is supporting manufacturer, is derivingincome from manufacturing and export of woolen blankets etc. In its returnof income, the assessee claimed deduction under Section 80 HHC of theIncome Tax Act, 1961 (hereinafter referred to as `the Act') claiming itself atpar with the direct exporter on the basis of a judgment of the Income TaxAppellate Tribunal, Delhi Bench-I, Delhi in Eastern Leather Products (P)Ltd. vs. DCIT, 68 ITD 358 (1998). However, the Assessing Officer did notaccept the contention of the assessee and disallowed the deductions undersection 80 HHC of the Act. On appeal by the assessee, the Commissioner ofIncome Tax (Appeals), while relying upon the aforesaid decision in the caseof Eastern Leather Products (P) Ltd. vs. DCIT, 68 ITD 358 (1998), held thatthe assessee was entitled to the deduction under Section 80 HHC of the Act as a supporting manufacturer in the same manner as in the case of a directexporter. Feeling aggrieved by the said order, the revenue filed an appealbefore the Income Tax Appellate Tribunal, which was dismissed and theclaim of the assessee for deduction under Section 80 HHC of the Act as asupporting manufacturer was upheld. However, on the other issues (whichare not relevant for the purpose of decision of this appeal), the appeal of therevenue was partly allowed. Feeling aggrieved against the aforesaid order of the Tribunal,the revenue has filed the instant appeal under Section 260-A of the Act,against the order dated 31.5.207, passed by the Tribunal in ITA No. 1226(DEL)/2006 dated 31.5.2007 for the assessment year 2002-03, raising thefollowing substantial question of law : “Whether on the facts and in the circumstances of the case, thelearned ITAT was right in law in upholding the order of theCIT (Appeals), directing the Assessing Officer to allowdeduction u/s 80 HHC to the assessee, who is a supportingmanufacturer in the same manner, as in the case of directexporter, treating the supporting manufacturer at par with thedirect exporter and ignoring the provisions of section 80 HHC(1A) read with section 80 HHC (3A) read with clause (baa) ofexplanation to section 80 HHC of the Act?” Mr. Sanjeev Kaushik, learned counsel for the revenue hasargued that the deductions allowable to the assessee under Section 80 HHC ITA No. 148 of 2008 of the Act had already been computed and allowed by the Assessing Officerand the Explanation (baa) to Section 80 HHC of the Act is not applicable inthe case of the assessee and therefore, the Tribunal has erred in law whileupholding the claim of the assessee. We have heard learned counsel for the revenue and perused therecord. However, we are unable to find any force in his submissions. In ITANo. 544 of 2007, decided on 13.5.2008, titled as Commissioner of Incometax, Karnal versus Carpet India, Sector 29, HUDA, Panipat, this Court whilerelying upon the judgment of the Hon'ble Apex Court inCommissioner of Income tax, Thiruvanantapuram v. Baby Marine Exports(2007) 290ITR 323 (SC) has upheld the claim of the assessee under Section 80 HHC asa supporting manufacturer at par with the direct exporter as a similarquestion of law raised by the revenue for the earlier assessment year hasbeen answered against the revenue and in favour of the assessee and theappeal filed by the revenue has been dismissed. Sh. Sanjeev Kaushik,learned counsel for the revenue could not dispute the said proposition oflaw as settled by this Court in ITA No. 544 of 2007. Income tax, Thiruvanantapuram v. Baby Marine Exports(2007) 290ITR 323 (SC) has upheld the claim of the assessee under Section 80 HHC asa supporting manufacturer at par with the direct exporter as a similarquestion of law raised by the revenue for the earlier assessment year hasbeen answered against the revenue and in favour of the assessee and theappeal filed by the revenue has been dismissed. Sh. Sanjeev Kaushik,learned counsel for the revenue could not dispute the said proposition oflaw as settled by this Court in ITA No. 544 of 2007. In view of the above, no substantial question of law survivesfor our determination. We find no merit in the appeal and the same isdismissed. ( SATISH KUMAR MITTAL ) JUDGE July 17, 2008 ( AUGUSTINE GEORGE MASIH )ndj JUDGE