The Commissioner Of Income Tax v. Klockner Desma Machinery (P) Ltd.....opponent(S

O/TAXAP/857/2007 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 857 of 2007 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ?the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ?to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ THE COMMISSIONER OF INCOME TAX....Appellant(s) Versus KLOCKNER DESMA MACHINERY (P) LTD.....Opponent(s) ================================================================ Appearance: MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1MR MANISH J SHAH, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERIand HONOURABLE MR.JUSTICE K.J.THAKER Date : 17/12/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1.By way of this appeal, the Revenue has challenged the judgment and order dated 8.9.2006 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench “C” in ITA No. 4017/Ahd/2003 for AY 2001-02. 2.While admitting this appeal on 12.9.2007, this Court has framed the following substantial questions of law: A)Whether the Appellate Tribunal is right in law and on facts in holding that for the purpose of calculation of total turnover in respect of deduction u/s. 80HHC, the amount of excise duty, sales tax, modvat and CST should be excluded ? B)Whether the Appellate Tribunal is right in law and on facts in holding that duty drawn backs of Rs. 6,01,734/- is income of the industrial undertaking eligible for reduction u/s. 80IA ? 3.The facts of the present case are that the assessee filed its return of income on 29.10.2001 declaring total income of Rs. 22,13,440/-. The O/TAXAP/857/2007 JUDGMENT said return was processed u/s. 143(1) of the IT Act on 20.8.2002. The case was selected for limited scrutiny and a notice u/s. 143(2)(i) of the IT Act was issued on 18.10.2002. A further notice was also been issued on 17.2.2003. The assessee company has furnished the details in response to the said notice. After considering the material on record, the assessment order came to be passed. Against the said order of assessment, the assessee has preferred appeal before the CIT(Appeals) which came to be partly allowed. Against the said order of the CIT(Appeals), the Revenue has preferred appeal before the ITAT which is dismissed. Being aggrieved by the said judgment and order passed by ITAT, the Revenue has preferred the present Tax Appeal before this Court. 4.Heard the learned advocates appearing for the parties and considered the submissions. However, now the issue is squarely covered by the decision of this court in the case of Commissioner of Income-Tax v. Kalpataru Power Transmission co. ltd., reported in [2014] 42 taxmann.com 104 (Gujarat), wherein, in para-7, this Court has observed as under: Hon’ble Supreme Court in the case of Lakshmi Machine Works (supra) and Shiva Tex Yarn Ltd. (supra) as well as recent O/TAXAP/857/2007 JUDGMENT 4.Heard the learned advocates appearing for the parties and considered the submissions. However, now the issue is squarely covered by the decision of this court in the case of Commissioner of Income-Tax v. Kalpataru Power Transmission co. ltd., reported in [2014] 42 taxmann.com 104 (Gujarat), wherein, in para-7, this Court has observed as under: Hon’ble Supreme Court in the case of Lakshmi Machine Works (supra) and Shiva Tex Yarn Ltd. (supra) as well as recent O/TAXAP/857/2007 JUDGMENT decision of this Court in Tax Appeal No. 884 of 206 and other allied appeals, to the facts of the case on hand the question raised in the present Tax Appeal is answered against the revenue and it is held that the learned Tribunal has not committed any error in holding that the components of sales tax and central excise do not form part of sale proceeds for the purpose of Section 80HHC of the Act despite insertion of Section 45 of the Act.” 5.In that view of the matter, it is held that the Appellate Tribunal is right in law and on facts in holding that for the purpose of calculation of total turnover in respect of deduction u/s. 80HHC, the amount of excise duty, sales tax, modvat and CST should be excluded, is answered in favour of the assessee and against the Revenue. The question no. (B) is concluded by the Hon’ble Supreme Court in the case of Liberty India v. Commissioner of Income Tax, reported in [2009] 317 ITR 218 (SC), and therefore, in that view of the matter, the question No. (B), it is held that the Appellate Tribunal was not right in law and on facts in holding that duty drawn backs of Rs. 6,01,734/- is income of the industrial undertaking eligible for reduction u/s. 80IA, is answered in favour of the revenue and against the assessee. The present Tax Appeal is partly allowed. mandora (K.S.JHAVERI, J.) (K.J.THAKER, J)