The Commissioner Of Income Tax v. M/S Anand Concast Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.33 of 2011 (O&M)Date of decision: 27.1.2011 The Commissioner of Income Tax. Vs. M/s Anand Concast Ltd. -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Denesh Goyal, Standing counselfor the Revenue.for the Revenue. --- ADARSH KUMAR GOEL, J. 1.This appeal has been preferred by the revenue underSection 260-A of the Income Tax Act, 1961 (for short, “the Act”)against the order of the Income Tax Appellate Tribunal,Chandigarh dated 25.6.2010 in I.T.A. No.252/CHD/2010 proposing to raise following substantial questions of law:- “(i)Whether on the facts and circumstances of the case, theITAT was right in law in not holding that total saleconsideration inclusive of face value of DEPB andpremium amount received thereof represents profitchargeable under sections 28(iiid) and 28(iiie) of theIncome Tax Act, 1961?ITAT was right in law in not holding that total saleconsideration inclusive of face value of DEPB andpremium amount received thereof represents profitchargeable under sections 28(iiid) and 28(iiie) of theIncome Tax Act, 1961? (ii)Whether on the facts and circumstances of the case, theITAT was right in law in not holding that profit on transferof DEPB entitlement represents the entire amountinclusive of premium of sale of such DEPB?ITAT was right in law in not holding that profit on transferof DEPB entitlement represents the entire amountinclusive of premium of sale of such DEPB? (iii)Whether on the facts and circumstances of the case, theITAT was right in law in holding that the word “profit”referred to in Sections 28(iiid) and 28(iiie) of the IncomeTax Act, 1961 means the difference between the sale priceof DEPB and the face value of DEPB ignoring the fact thatITAT was right in law in holding that the word “profit”referred to in Sections 28(iiid) and 28(iiie) of the IncomeTax Act, 1961 means the difference between the sale priceof DEPB and the face value of DEPB ignoring the fact that the entire amount represents the profit in the hands ofassessee? (iv)Whether on the facts and circumstances of the case, theITAT was right in law in deducting the face value of DEPBfrom sale price of DEPB for calculating profit underSections 28(iiid) and 28(iiie) of the Income Tax Act, 1961as if the face value is the cost incurred by the assessee toacquire the DEPB?ITAT was right in law in deducting the face value of DEPBfrom sale price of DEPB for calculating profit underSections 28(iiid) and 28(iiie) of the Income Tax Act, 1961as if the face value is the cost incurred by the assessee toacquire the DEPB? (v)Whether on the facts and circumstances of the case, theITAT was right in law in holding that the word profitreferred to in Sections 28(iiid) and 28(iiie) of the IncomeTax Act, 1961 requires any artificial cost to be interpolatedto the extent that the face value of DEPB/DFRC should bededucted from the sale proceed for the purpose ofdetermination of deduction under Section 80HHC of theIncome Tax Act, 1961?ITAT was right in law in holding that the word profitreferred to in Sections 28(iiid) and 28(iiie) of the IncomeTax Act, 1961 requires any artificial cost to be interpolatedto the extent that the face value of DEPB/DFRC should bededucted from the sale proceed for the purpose ofdetermination of deduction under Section 80HHC of theIncome Tax Act, 1961? (v)Whether on the facts and circumstances of the case, theITAT was right in law in holding that the word profitreferred to in Sections 28(iiid) and 28(iiie) of the IncomeTax Act, 1961 requires any artificial cost to be interpolatedto the extent that the face value of DEPB/DFRC should bededucted from the sale proceed for the purpose ofdetermination of deduction under Section 80HHC of theIncome Tax Act, 1961?ITAT was right in law in holding that the word profitreferred to in Sections 28(iiid) and 28(iiie) of the IncomeTax Act, 1961 requires any artificial cost to be interpolatedto the extent that the face value of DEPB/DFRC should bededucted from the sale proceed for the purpose ofdetermination of deduction under Section 80HHC of theIncome Tax Act, 1961? (vi)Whether on the facts and circumstances of the case, theITAT has failed to appreciate that deduction u/s 80HHC ofthe Income Tax Act, 1961 was rightly computed inaccordance with amendment made by the Taxation Laws(Amendment) Act, 2005 with retrospective effect from01.04.1998?”ITAT has failed to appreciate that deduction u/s 80HHC ofthe Income Tax Act, 1961 was rightly computed inaccordance with amendment made by the Taxation Laws(Amendment) Act, 2005 with retrospective effect from01.04.1998?” (vii)Whether on the facts and circumstances of the case, theHon’ble Income Tax Appellate Tribunal was legallyjustified in deleting the charging of interest under section234D ignoring the fact that the order charging interest wasmade on05.12.2008 i.e. after 01.06.2003, the date ofinception of provision of section 234D of the Income-taxAct, 1961?Hon’ble Income Tax Appellate Tribunal was legallyjustified in deleting the charging of interest under section234D ignoring the fact that the order charging interest wasmade on05.12.2008 i.e. after 01.06.2003, the date ofinception of provision of section 234D of the Income-taxAct, 1961? (viii)Whether on the facts and in law the Hon’ble ITAT waslegally justified in deleting the charging of interest undersection 234D ignoring the fact that the provisions ofsection 234D are applicable on action taken after01.06.2003 irrespective of the Assessment Year involved?”legally justified in deleting the charging of interest undersection 234D ignoring the fact that the provisions ofsection 234D are applicable on action taken after01.06.2003 irrespective of the Assessment Year involved?” 2. As far as questions (i) to (vi) are concerned, it isstated that the same are covered by earlier order of this Courtdated 16.8.2010 in I.T.A. No.299 of 2010CITv. M/s F.C. Sondhi& Company (P) Ltd., whereby the matter was remanded to theTribunal. Accordingly, subject to the right of the respondent to move the Court if aggrieved, we dispose of the said questions insame terms. 3. As regards questions (vii) and (viii) relating tochargibility of interest under Section 234D of the Act for theassessment year 2001-02, the said provision having beenincorporated only w.e.f. 1.6.2003, the Tribunal was justified inholding that the same could not apply to the year in question.The view so taken is not shown in any manner to be erroneous.No interference is, thus, called for with the view taken by theTribunal on this aspect. The said questions cannot, thus, be heldto be substantial questions of law. The appeal is disposed of. (ADARSH KUMAR GOEL) JUDGE January 27, 2011ashwani ( AJAY KUMAR MITTAL ) JUDGE