The Commissioner Of Income-Tax, Karnal v. Sushil Kumar Gupta

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No. 429 of 2008DATE OF DECISION : 25.07.2008 The Commissioner of Income-tax, Karnal .... APPELLANT Versus Sushil Kumar Gupta ..... 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 textile products. The assesseefiled its return on 31.10.2001 declaring income of Rs. 1,62,270/- which wassubsequently assessed under Section 143 (3) of the Income Tax Act, 1961(hereinafter referred to as `the Act') at an income of Rs. 2,31,55,740/-. In itsreturn of income, the assessee claimed deduction under Section 80 HHC ofthe Act claiming itself at par with the direct exporter on the basis of ajudgment of the Income Tax Appellate Tribunal, Delhi Bench-I, Delhi inEastern Leather Products (P) Ltd. vs. DCIT, 68 ITD 358 (1998). However,the Assessing Officer did not accept the contention of the assessee anddisallowed the deductions under section 80 HHC of the Act. On appeal by the assessee, the Commissioner of Income Tax (Appeals), while relyingupon the aforesaid decision in the case of Eastern Leather Products (P) Ltd.vs. DCIT, 68 ITD 358 (1998), held that the assessee was entitled to thededuction under Section 80 HHC of the Act as a supporting manufacturer inthe same manner as in the case of a direct exporter. 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 29.8.207, passed by the Tribunal in ITA No. 5171/DEL/2004 for the assessment year 2001-02, raising the followingsubstantial 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 HHCof 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 Mr. Sanjeev Kaushik, learned counsel for the revenue hasargued that the deductions allowable to the assessee under Section 80 HHCof 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, ITA No. 296 of 2008,decided on 7.7.2008, titled as “The Commissioner of Income tax, Karnal v.M/s. Carpet India, Sec. 29, HUDA, Panipat, and ITA No. 148 of 2008, decided on 17.7.2008, titled as “The Commissioner of Income-tax, Karnal v.M/s Spartan Trends Inc. Mahajan House, Lake Road, Panipat. 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 25, 2008 ndj ( AUGUSTINE GEORGE MASIH ) JUDGE