Karnataka High Court
M/S Metal Closures Pvt Ltd vs The Deputy Commissioner Of Income-Tax on 12 June, 2018
Bench: Vineet Kothari, S.Sujatha
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IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 12th DAY OF JUNE 2018
PRESENT
THE HON'BLE Dr.JUSTICE VINEET KOTHARI
AND
THE HON'BLE Mrs.JUSTICE S.SUJATHA
I.T.A.Nos.24-25/2015
C/W
I.T.A.Nos.22-23/2015, I.T.A.Nos.379-381/2016
I.T.A.Nos.24-25/2015
BETWEEN:
M/S. METAL CLOSURES PVT. LTD.,
REGD. OFFICE No.39/4B
12TH K.M. KANAKAPURA ROAD
BANGALORE-560 062
REPRESENTED BY ITS M.D.
SRI. B. PRASHANTH HEGDE
AGED ABOUT 66 YEARS
S/O SRI. V. RATHNAKAR HEGDE.
...APPELLANT
(By Mr. S. PARTHASARATHI, ADV.,)
AND:
THE DEPUTY COMMISSIONER OF INCOME-TAX
CIRCLE12(1), BANGALORE.
...RESPONDENT
(By Mr. K.V. ARAVIND, ADV.,)
Date of Judgment 12-06-2018 I.T.A.Nos.24-25/2015 & Connected Matters
M/s. Metal Closures Pvt. Ltd., & Anr. Vs.
The Deputy Commissioner of Income-Tax & Anr.
2/8
THESE I.T.A.s ARE FILED UNDER SECTION 260-A OF
INCOME TAX ACT,1961 PRAYING TO FORMULATE THE
SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. ALLOW
THE APPEAL AND SET ASIDE THE COMMON ORDER PASSED BY
THE INCOME TAX APPELLATE TRIBUNAL BEARING ITA
Nos.116/BANG/2012 AND 340/BANG/2013 DATED 28/08/2014
(ANNEXURE-A) & ETC.
I.T.A.Nos.22-23/2015
BETWEEN:
M/S. INTERNATIONAL STONES INDIA PVT. LTD.,
No.55/12, ALANKAR APARTMENT
FLAT No.1, 39TH CROSS, 14TH MAIN
JAYANAGAR, BANGALORE-56001
REP. BY ITS M.D.
SRI. RAKESH SHARMA
AGED ABOUT 57 YEARS
S/O SRI. C.B. SHARMA.
...APPELLANT
(By Mr. S. PARTHASARATHI, ADV.,)
AND:
THE ASST. COMMISSIONER OF INCOME-TAX
CIRCLE11(4), BANGALORE.
...RESPONDENT
(By Mr. K.V. ARAVIND, ADV.,)
THESE I.T.A.s ARE FILED UNDER SECTION 260-A OF
INCOME TAX ACT,1961 PRAYING TO FORMULATE THE
SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. ALLOW
THE APPEAL AND SET ASIDE THE COMMON ORDER PASSED BY
THE ITAT BEARING ITA Nos.888/BANG/2010 AND
1130/BANG/2011 DATED 05/09/2014 (ANNEXURE-A) & ETC.
I.T.A.Nos.379-381/2016
BETWEEN:
M/S. INTERNATIONAL STONES INDIA PVT. LTD.,
No.55/12, ALANKAR APARTMENT
FLAT No.1, 39TH CROSS, 14TH MAIN
Date of Judgment 12-06-2018 I.T.A.Nos.24-25/2015 & Connected Matters
M/s. Metal Closures Pvt. Ltd., & Anr. Vs.
The Deputy Commissioner of Income-Tax & Anr.
3/8
JAYANAGAR, BANGALORE-56001
REP. BY ITS MANAGING DIRECTOR
SRI. RAKESH SHARMA
AGED ABOUT 58 YEARS
S/O SRI. C.B. SHARMA.
...APPELLANT
(By Mr. S. PARTHASARATHI, ADV.,)
AND:
THE DEPUTY COMMISSIONER OF INCOME-TAX
CIRCLE 11(4), No.732, BMTC BUILDING
80 FT ROAD, 6TH BLOCK
KORAMANGALA, BANGALORE-560095.
...RESPONDENT
(By Mr. K.V. ARAVIND, ADV.,)
THESE I.T.A.s ARE FILED UNDER SECTION 260-A OF
INCOME TAX ACT,1961 PRAYING TO FORMULATE THE
SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. ALLOW
THE APPEAL TO THE EXTENT OF NON-CALCULATION OF
DEDUCTIBLE EXPORT PROFIT U/S. 10B IN RESPECT OF
DEEMED EXPORT VIDE COMMON ORDER OF THE INCOME-TAX
APPELLATE TRIBUNAL BEARING ITA Nos.539, 1474 &
1475/BANG/2014 FOR THE ASSESSMENT YEARS 2009-10,
2010-11 AND 2011-12, DT:20/1/2016 (ANNEXURE-A) & ETC.
THESE I.T.A.s COMING ON FOR ORDERS THIS DAY,
Dr.VINEET KOTHARI J, DELIVERED THE FOLLOWING:-
JUDGMENT
Mr. S. Parthasarathi, Adv. for Appellants - Assessees Mr. K.V. Aravind, Adv. for Respondents - Revenue
1. Heard the learned counsels for the parties.
2. In view of our decision rendered today 12.06.2018 in I.T.A.No.564/2016 and other Date of Judgment 12-06-2018 I.T.A.Nos.24-25/2015 & Connected Matters M/s. Metal Closures Pvt. Ltd., & Anr. Vs. The Deputy Commissioner of Income-Tax & Anr. 4/8 connected appeals filed by the Revenue, we are of the opinion that the present appeals filed by the appellants- assessees deserves to be allowed and the substantial questions of law framed below deserves to be answered in favour of the assessees.
3. The following substantial question of law arises for our consideration:-
"Whether in the facts and circumstances of the case, the appellants-assessees are entitled to deduction u/s.10B of the Act, 1961, in respect of the 'Deemed Export' of goods made by it during the period in question through a third party or not?"
4. The circumstances, in which the assessees were required to file the present appeals in this Court was that the ITAT by its impugned orders dated 28.08.2014, 05.09.2004 and 20.01.2016 respectively, vide Annexure-A for A.Y. 2008-09, 2009-10, 2010-11 and 2011-12 respectively, took a Date of Judgment 12-06-2018 I.T.A.Nos.24-25/2015 & Connected Matters M/s. Metal Closures Pvt. Ltd., & Anr. Vs. The Deputy Commissioner of Income-Tax & Anr. 5/8 view against the assessees for "Deemed Exports" to be covered by the definition of 'export' for the purpose of deduction u/s.10B of the Act, following the order passed by the learned Tribunal in the cases of M/s.Tata Elxsi Ltd., and Granite Mart Ltd., in which a view against the appellants-assessees was taken by the learned Tribunal.
5. However, since the Division Bench of this Court in the case of Tata Elxsi reversed the order of the learned Tribunal and held in favour of the assessees that assessees were entitled to deduction u/s.10B of the Act in respect of the "Deemed Export" also and similarly following the said judgment, we have also taken a view in favour of the appellant-assessee M/s.International Stones India Pvt. Ltd., that the appellant-assessee is entitled to the benefit of deduction u/s.10B of the Act, we find that the present appellant- assessee M/s.Metal Closures Pvt. Ltd., who is also Date of Judgment 12-06-2018 I.T.A.Nos.24-25/2015 & Connected Matters M/s. Metal Closures Pvt. Ltd., & Anr. Vs. The Deputy Commissioner of Income-Tax & Anr. 6/8 similarly situated, since the fact of "Deemed Export"
made by it through a third party is not in dispute, also deserves to get the same relief and therefore, the present appeals filed by assessees deserve to be allowed.
6. The relevant portion of the judgment passed in I.T.A.No.564/2016 & Connected matters (The Pr.Commissioner of Income-Tax, CIT(A) & Anr. Vs. M/s. International Stones India Pvt. Ltd.,) decided on 12.06.2018 are quoted below for ready reference:-
"21. As held by the Division Bench of this Court in M/s.Tata Elxsi's case, the purpose of giving these deductions in these special provisions is to encourage exports and fetch foreign currency in terms of Exim Policy propounded and announced by the Union of India. The 'Deemed Export' by the assessee Undertaking even through a third party who has exported such goods to a Foreign country and has fetched Foreign Currency for India, still remains a 'Deemed Export' in the hands of the assessee undertaking also. If the Parliament intended to put any restrictive meaning for curtailing the said deduction, such words could be employed in sub- Date of Judgment 12-06-2018 I.T.A.Nos.24-25/2015 & Connected Matters M/s. Metal Closures Pvt. Ltd., & Anr. Vs. The Deputy Commissioner of Income-Tax & Anr.7/8
section(1) itself, which could have excluded 'Deemed Export' from the ambit and scope of word 'export' employed in sub-section(1) of S.10B of the Act. The Explanation defining 'Export Turnover' in both these provisions does not make any such distinction between the 'Direct Export' and 'Deemed Export'.
22. For a harmonious reading of these provisions of the Act which are undoubtedly beneficial provisions, the word 'export' read with the background of Exim Policy of Union of India would certainly include 'Deemed Export' also within the ambit and scope of the 'Export Turnover' as explained in Explanation-2 of sub-section (9A) of the said S.10B of the Act.
23. Therefore, both the contentions raised by the learned counsel for the appellant-Revenue to restrict the deduction in the hands of the respondent-assessee by excluding the 'Deemed Exports', does not have any merit and the said contention deserves to be rejected and the same is accordingly rejected.
24. The appellant-Revenue before us was unable to establish that both the Respondents- assessees before us and the entity through whom such export was made by the assessee for the period in question, have claimed any double or Date of Judgment 12-06-2018 I.T.A.Nos.24-25/2015 & Connected Matters M/s. Metal Closures Pvt. Ltd., & Anr. Vs. The Deputy Commissioner of Income-Tax & Anr.8/8
repetitive benefit u/s.10B of the Act for the same transaction of export.
25. Therefore, we are clearly of the opinion that the issue raised in the present case by the Revenue is squarely covered by the decision of the Division Bench of this Court in M/s.Tata Elxsi's case (supra) and we respectfully agree with a view expressed by the earlier Division Bench and therefore, we answer the said substantial question of law framed above against the Revenue and in favour of the assessee and the appeals filed by the Revenue deserves to be dismissed and the same are accordingly dismissed. No costs".
7. The appeals filed by the appellants-assessees, therefore are allowed and the aforesaid substantial question of law is answered in favour of the assessees and against the Revenue.
Sd/-
JUDGE Sd/-
JUDGE Srl.