The Commissioner Of Income Tax v. M/S The Designer

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.423 of 2010 Date of decision: 13.9.2010 The Commissioner of Income Tax. Vs. M/s The Designer. -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Vivek Sethi, Advocatefor the appellant. for the appellant. --- ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the assesseeunder Section 260-A of the Income Tax Act, 1961 (for short, “theAct”) against the order dated 12.10.2009 of the Income TaxAppellate Tribunal, Amritsar in I.T.A. No.137(ASR)/2009 for theassessment year 2004-05 proposing to raise following substantialquestions of law:- (i)Whether on the facts and circumstances of the case, theITAT was right in not holding that total sale considerationinclusive of face value of DEPB and premium amountreceived thereof represents profit chargeable undersections 28(iiid) and 28(iiie) of the Income Tax Act,1961?ITAT was right in not holding that total sale considerationinclusive of face value of DEPB and premium amountreceived thereof represents profit chargeable undersections 28(iiid) and 28(iiie) of the Income Tax Act,1961? (ii)Whether on the facts and circumstances of the case, theITAT was right in law in not holding that profit on transferITAT was right in law in not holding that profit on transfer of 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 thatthe entire amount represents the profit in the hands ofassessee?ITAT 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 thatthe 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? (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? (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 from1.4.1998?” 2. Learned counsel for the appellant states that the matter iscovered in favour of the revenue by orders of this Court dated16.8.2010 in I.T.A. No.301 of 2010 CIT v. M/s Victor ForgingsandI.T.A. No.299 of 2010CITv. F.C. Sondhi, wherein after noticing the judgment of the Bombay High Court in CITv. KalpataruColours & Chemicals2010 (42) DTR 193, the matter wasremanded to the Tribunal for fresh decision in accordance withlaw. 3. Since we find that the matter is covered by earlierorders of this Court, we dispose of this appeal in same terms.For this purpose, we have not considered it necessary to issuenotice to the respondent, but we give liberty to the respondent tomove this Court if they have any grievance against this order. (ADARSH KUMAR GOEL) JUDGE September 13, 2010ashwani 2. Learned counsel for the appellant states that the matter iscovered in favour of the revenue by orders of this Court dated16.8.2010 in I.T.A. No.301 of 2010 CIT v. M/s Victor ForgingsandI.T.A. No.299 of 2010CITv. F.C. Sondhi, wherein after noticing the judgment of the Bombay High Court in CITv. KalpataruColours & Chemicals2010 (42) DTR 193, the matter wasremanded to the Tribunal for fresh decision in accordance withlaw. 3. Since we find that the matter is covered by earlierorders of this Court, we dispose of this appeal in same terms.For this purpose, we have not considered it necessary to issuenotice to the respondent, but we give liberty to the respondent tomove this Court if they have any grievance against this order. (ADARSH KUMAR GOEL) JUDGE September 13, 2010ashwani ( AJAY KUMAR MITTAL ) JUDGE