Gujarat High Court
Commissioner Of IncomeTaxI vs Fag Precision Bearings India Ltd. ... on 22 October, 2007
TAXAP/501/2007 1/3 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL No. 501 of 2007
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COMMISSIONER OF INCOMETAXI Appellant(s)
Versus
FAG PRECISION BEARINGS INDIA LTD. Opponent(s)
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Appearance :
MR MANISH R BHATT for Appellant(s) : 1,
None for Opponent(s) : 1,
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CORAM : HONOURABLE THE CHIEF JUSTICE Y.R.MEENA
and
HON'BLE SMT. JUSTICE ABHILASHA KUMARI
Date : 22/10/2007
ORAL ORDER
Heard learned counsel for the appellant.
Following questions are proposed for admission of this Appeal:
"(A) Whether in the facts and circumstances of the case, the Tribunal was justified in holding that the excise duty should not be taken into account for valuation of the closing stock?
(B) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in confirming the order of the CIT(A), deleting the disallowance of Rs.13,41,466/ on the construction of false ceiling?
TAXAP/501/2007 2/3 ORDER (C) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the CIT(A) whereby he had deleted an addition of Rs.2,98,856/, being the Modvat credit availed of on the purchase of capital goods and set off against the excise duty liability on the sale of finished goods without offering the corresponding collection of excise duty as income?
(D) Whether on the facts and in the circumstances of the case, the Appellate Tribunal is justified in holding that the "total turnover" for the purposes of reduction u/s.80HHC will not include Sales Tax and Excise Duty?
(E) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the CIT(A) whereby he negatived the exclusion of 90% of consultancy income of Rs.1,66,48,958/ from the profits of the business under Explanation (baa) to section 80HHC?"
In question (B), the issue raised is whether expenditure on construction of false ceiling can be added as capital expenses. The concurrent findings on this issue are against the Revenue.
In question (C), the issue raised is regarding Modvat credit availed of on the purchase of capital goods and set off against the excise duty liability on the sale of finished goods without offering the corresponding collection of excise duty. Here also, addition was deleted by concurrent findings of CIT (Appeals) and Tribunal.
TAXAP/501/2007 3/3 ORDER Issue raised in question (D) is regarding exclusion of sales tax and excise duty for the purpose of reduction under Section 80HHC. Now this issue is covered by the decision of Their Lordships in the case of CIT v. Lakshmi Machine Works reported in (2007) 290 ITR 667 (SC).
Considering these facts, the Appeal is admitted in terms of the following substantial questions of law:
"(A) Whether in the facts and circumstances of the case, the Tribunal was justified in holding that the excise duty should not be taken into account for valuation of the closing stock?
(B) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the CIT(A) whereby he negatived the exclusion of 90% of consultancy income of Rs.1,66,48,958/ from the profits of the business under Explanation (baa) to section 80HHC?"
Issue notice to the respondent. Paper book be filed within three months.
List the Appeal for final hearing after three months.
(Y.R.MEENA, C.J.) (SMT.ABHILASHA KUMARI, J.) (sunil)