Punjab-Haryana High Court
The Commissioner Of Income-Tax vs Dcit 68 Itd 358 (1998) on 16 September, 2008
Author: Ajay Tewari
Bench: Adarsh Kumar Goel, Ajay Tewari
I.T.A No. 331 of 2008 ::1::
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
I.T.A No. 331 of 2008
Date of decision : September 16, 2008
The Commissioner of Income-tax, Karnal
...... Appellant
through Mr.Sanjeev Kaushik, Advocate
v.
M/S Sheena Industries
...... Respondent
CORAM : HON'BLE MR.JUSTICE ADARSH KUMAR GOEL
HON'BLE MR.JUSTICE AJAY TEWARI
***
1. Whether Reporters of Local Newspapers may be allowed to see the judgment ?
2. To be referred to the Reporters or not ?
3. Whether the judgment should be reported in the Digest ?
*** AJAY TEWARI, J This appeal has been filed under Section 260A of the Income Tax Act, 1961 (for short "the Act") by the revenue proposing the following question of law :-
" Whether on the facts and in the circumstances of the case, the learned ITAT was right in law in upholding the order of the CIT (Appeals), directing the Assessing Officer to allow deduction u/s 80 HHC to the assessee who is a supporting manufacturer in the same manner, as in the case of direct exporter, treating the supporting manufacturer at par with direct exporter and ignoring the provisions of section 80 HHC(1A) read with section 80 HHC (3A) read with clause (baa) of explanation to I.T.A No. 331 of 2008 ::2::
section 80 HHC of the Act."
The respondent-assessee is a partnership firm deriving income from the manufacturing and sale of textile goods to M/S IKEA Trading (India) Ltd (Export House/Trading House) as supporting manufacturer. The assessee filed return declaring total income as nil on 30.10.2001, which was subsequently assessed under Section 143(3) of the Act at an income of Rs.2,55,13,910/- by computing deduction under Section 80HHC as per the provisions of Section 80HHC(1A) read with Section 80 HHC(3A) read with clause (baa) of explanation to Section 80HHC of the Act as the assessee is a supporting manufacturer. The assessee has made total sales amounting to Rs.37,63,87,161/- as a supporting manufacturer to M/S IKEA Trading (India) Ltd. It received total export incentives of Rs.2,95,37,033/-, which included duty draw back of Rs.2,94,33,244/-, Duty Entitlement Pass Book (DEPB) premium of Rs.1,03,789/- and claimed deduction under Section 80HHC of the Act amounting to Rs.5,14,65,193/- out of the total profits of Rs.6,44,08,903/-. The assessee computed the deduction under Section 80HHC of the Act treating itself at par with the direct exporter and relied upon a judgment of the learned ITAT Delhi-Bench `A' in the case of Eastern Leather Products (P) Ltd vs DCIT 68 ITD 358 (1998).
The Assessing Officer did not accept the contentions of the assessee, as the facts narrated by the assessee were different from those as quoted in the case law cited by it, and re-computed the deduction allowable to the assessee under Section 80HHC of the Act as per the provisions of Section 80HHC(1A) read with Section 80HHC(3A) read with clause (baa) of explanation to Section 80HHC of the Act, as the assessee is a supporting manufacturer and allowed deduction of Rs.3,70,48,161/- under Section I.T.A No. 331 of 2008 ::3::
80HHC of the Act instead of Rs.5,14,65,193/- as claimed by the assessee.
In appeal, the Commissioner of Income Tax (A) held that the assessee was entitled to the deduction under Section 80HHC of the Act as a supporting manufacturer in the same manner as in the case of direct exporter.
The learned Tribunal before which the matter was carried by the department in appeal also concurred with the view of the Commissioner and dismissed the appeal.
The matter is not res integra. This Court, vide order 7.7.2008 passed in ITA No.296 of 2008, The Commissioner of Income Tax, Karnal vs M/S Carpet India, Sector 29 HUDA, Panipat, decided the same question against the revenue. The present appeal is, thus, dismissed in view of the decision of this Court rendered in the aforesaid case.
No costs.
( AJAY TEWARI )
JUDGE
( ADARSH KUMAR GOEL )
JUDGE
September 16, 2008
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