The Commissioner Of Incometax, Karnal v. M/S. Carpet India, Sec.29, Huda,Panipat. Panipat, Ay 2003-04

ITA No.296 of 2008 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.296 of 2008 Date of decision: 7.7.2008 The Commissioner of IncomeTax, Karnal ......Appellant Versus M/s. Carpet India, Sec.29, HUDA,Panipat. Panipat, AY 2003-04 ......Respondent CORAM:-HON'BLE MR.JUSTICE SATISH KUMAR MITTALHON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present:Mr. Sanjeev Kaushik, Advocate for the appellant-revenue. * * * Rakesh Kumar Garg, J . 1.The assessee, who is a supporting manufacturer is derivingincome from the manufacturing and sale of textile goods to M/s IKEATrading (India) Ltd. (Export House/Trading House). In the return of income,the assessee is claiming deduction under Section 80HHC of the IncomeTax Act, 1961 (hereinafter referred to as the “Act”) claiming itself at parwith the direct exporter on the basis of a judgement 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 deductionsunder Section 80HHC of the Act to the assessee. 2.On appeal of the assessee, the Commissioner of Income Tax(Appeals) held that the assessee was entitled to the deductions underSection 80HHC of the Act as a supporting manufacturer in the samemanner as in the case of a direct exporter. 3.Feeling aggrieved by the aforementioned order of theCommissioner of Income-Tax (Appeals), the revenue filed an appeal beforethe Tribunal, where claim of the assessee for deduction under Section 80HHC on incentives received by the assessee as a supporting manufacturerwas upheld in favour of the assessee. However, on other issues ( whichare not relevant for the purpose of decision of this appeal), the appeal ofthe revenue was partly allowed. 4.Feeling aggrieved against the aforesaid orders of the Tribunal,the revenue has filed the present appeal under Section 260A of the Actagainst the order dated 30.5.2007 passed by the Income-Tax AppellateTribunal, New Delhi Bench 'I' in ITA No.3964/Del/2005 for the assessmentyear 2003-04 raising the following substantial question of law:- “Whether on the facts and in the circumstances of the case, the Ld.ITAT was right in law in upholding the orderof the CIT(A), directing the Assessing Officer to allowdeduction under Section 80HHC to the assessee who isa supporting manufacturer in the same manner, as in thecase of direct exporter, treating the supportingmanufacturer at par with direct exporter and ignoring theprovisions of Section 80HHC (1A) read with Section80HHC(3A) read with clause (baa) of explanation toSection 80HHC of the Act.” 5.Mr. Sanjeev Kaushik, learned counsel for the revenue hasargued that the deductions allowable to the assessee under Section80HHC of the Act had already been computed and allowed by theAssessing Officer and the Explanation (baa) to Section 80HHC of the Act isnot applicable in the case of the assessee and therefore, the Tribunal haserred in law while upholding the claim of the assessee. 6.We have learned counsel for the revenue and perused therecord. However, we are unable to find any force in his submissions. InITA No.544 of 2007 in the case of the assessee itself, this Court whilerelying upon the judgement of the Hon'ble Apex Court inCommissioner ofIncome Tax, Thiruvanantapuram v. Baby Marine Exports(2007) 290ITR 323 (SC) has upheld the claim of the assessee under Section 80HHCas a 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. 6.We have learned counsel for the revenue and perused therecord. However, we are unable to find any force in his submissions. InITA No.544 of 2007 in the case of the assessee itself, this Court whilerelying upon the judgement of the Hon'ble Apex Court inCommissioner ofIncome Tax, Thiruvanantapuram v. Baby Marine Exports(2007) 290ITR 323 (SC) has upheld the claim of the assessee under Section 80HHCas a 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. 7.In view of the above, no substantial question of law survivesfor our determination. We find no merit in the appeal and the same isdismissed. (RAKESH KUMAR GARG) JUDGE July 7, 2008ps (SATISH KUMAR MITTAL) JUDGE