Indian Kanoon - Search engine for Indian Law

Gujarat High Court

Principal Commissioner Of Income Tax, ... vs M/S Shree Vijay Laxmi Exports on 27 January, 2020

Author: J.B.Pardiwala

Bench: J.B.Pardiwala, Bhargav D. Karia

         C/TAXAP/19/2020                                           ORDER




          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                           R/TAX APPEAL NO. 19 of 2020

==========================================================
        PRINCIPAL COMMISSIONER OF INCOME TAX, SURAT -1
                             Versus
                M/S SHREE VIJAY LAXMI EXPORTS
==========================================================
Appearance:
MRS KALPANAK RAVAL(1046) for the Appellant(s) No. 1
for the Opponent(s) No. 1
==========================================================

 CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
        and
        HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                               Date : 27/01/2020

                      ORAL ORDER

(PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA)

1. This tax appeal under Section 260A of the Income Tax Act, 1961 [for short 'The Act, 1961'] is at the instance of the revenue and is directed against the order passed by the Income Tax Appellate Tribunal, Surat Bench, Surat dated 24th July, 2019 in the ITA No.815/AHD/2016 for the A.Y 2012­13.

2. The revenue has proposed the following questions of law for the consideration of this Court:­ [i] Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT's order is correct when in fact trading activity in the nature of re­export of imported goods is not in the nature of services which entailed for the benefit of deduction U/s.10AA of the IT Act as trading is not defined as services under the income­tax act?

[ii] Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT's order is correct when in fact the exemption U/s Page 1 of 3 Downloaded on : Mon Jan 27 22:23:43 IST 2020 C/TAXAP/19/2020 ORDER 10AA of the IT Act should be based on total income to be computed as per the provisions of Sec.29 to 43D of the Act, after allowing all eligible deductions whether or claimed suo­moto by the assessee or not?

[iii] Whether, on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is right in upholding the decision of Ld. CIT(A) in deleting the disallowance made by the AO without appreciating that assessee­firm had taken undue benefits of Section 10AA of the Act by not claiming interest on Capital and Remuneration which resulted into increase in exempt profit of the assessee­firm?

[iv] Whether on the facts and circumstances of the case and in law, the decision of the Hon'ble ITAT is perverse in upholding the decision of Ld. CIT(A) in deleting the disallowance made by the AO without ascertaining the facts as narrated by the AO in as much as there was a partnership deed by which the firm was constituted on 27.11.2010 and the same was modified as an afterthought by an amendment in the partnership deed on 18.03.2011 by not providing the payment of interest & remuneration to partners by specially inserting a clause for non­payment?

[v] Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT's order is perverse in ignoring the important facts which clearly indicate the dubious method adopted by the assessee which cannot be allowed in view of the judgment of Hon'ble Supreme Court in the case of Mac Dowell & Company Vs. CIT (154 ITR 148)?

3. The Tribunal while concurring with the findings recorded by the CIT(A) has observed in Paragraph­20 of the impugned order as under:­ "20. We have heard the rival submissions and we find that the issue is squarely covered in favour of the assessee and against the Revenue by the decision of Hon'ble Jurisdictional High Court of Gujarat in the case of PCIT Vs. Alidhara Taxspin Engineers (supra), dated 02.05.2017, accordingly this ground of appeal of the Revenue is dismissed."

4. Thus, the Tribunal relied upon the dictum as laid by this Court in the case of Principal Commissioner of Income­tax Vs. Alidhara Taxspin Engineers & Another, Tax Appeal No.265 of 2017, decided on 02nd May, 2017.

C/TAXAP/19/2020 ORDER

5. The questions of law as proposed by the Revenue in the present appeal stand covered by the dictum as laid in the case of Alidhara Taxspin Engineers [Supra].

6. This Court had the occasion to consider the very same issue recently in the Tax Appeal No.818 of 2019 and allied appeals, decided on 20th January, 2020.

7. In view of the aforesaid, none of the questions of law as proposed by the Revenue could be termed as the substantial questions of law.

8. In the result, this appeal fails and is hereby dismissed.

(J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) aruna Page 3 of 3 Downloaded on : Mon Jan 27 22:23:43 IST 2020