CIT V. CLC CORPORATION

ITA/182/2011

AI Insights

The case involves multiple appeals by the Commissioner of Income Tax against various respondents, primarily concerning the taxability of profits on the sale of DEPB (Duty Entitlement Pass Book) under section 28 of the Income Tax Act. The core legal issue revolves around the correct interpretation of statutory provisions related to the deduction under section 80H of the Act and the applicability of section 80HHC concerning DEPB credits. The Tribunal had previously followed the decision in Topman Exports vs. STO, which was based on a Special Bench ruling that the profit on sale of DEPB should be considered at the time of accrual of income. However, this decision was later overruled by the Bombay High Court, leading to the current appeals where the High Court directed the Tribunal to reconsider the cases in light of the new judgment.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 737911 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 18-02-2011
• Assessment Year: misc
• Other Referred Cases: Topman Export Vs. STO, Commissioner of Income Tax Vs. Kapataru Colours
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: AJAY VOHRA; KAVITA JHA; SOMNATH SHUKIA; PRAKASH KUNNAR; MANISH KUMAR; O P SAPRA; AMIT DAYAL; PANKAJ JAIN; D K GOYAL; VIJAY NAIR; MANISH CHAUDHARY; RAKESH GUPTA; R K AGGARWAL; POONAM AHUJA
• Assessee Lawyers: KAMAL SAWHNEY; ABHISHEK MARATHA; SURUCHI AGGARWAL; ANUPAM TRIPATHI; AMIT SRIVASTAVA
• Keywords: Accrual of income; DEPB; Income Tax; Special Bench; Tax Deduction
• Section: 28; 80HHC; 28 (iiid); 80H

Judgement Text

"m THE HBGH COURT OF DELHB AT iSIEW DELH0 Judgment Reserved on: 10.02.2011 Decision Delivered On: 18.02.2011 (1) ITA 404/2010 COMMISSDONER OF INCOME TAX VERSUS ARJAN IMPEX PVT. LTD. (2) 8TA 708/2010 COIvilvllSSaONER OF INCOIVIE TAX VERSUS SPENTEX INDUSTRIES LTD. (3) ITA 793/2010 COMMISSIONER OF INCOME TAX VERSUS PHBLCO EXPORTS. (4) ITA 927/2010 COMMISSIONER OF INCOME TAX VERSUS PHILCO EXPORTS (5) PTA 1080/2010 COMMISSIONER OF INCOME TAX VERSUS SPENTEX INDUSTRIES LTD. (6) ITA 1886/2010 COMMISSIONER OF INCOME TAX VERSUS NITiN KUMAR SADH ITA No. ITA 404/2010 Si ors.connected matters . APPELLANT .RESPONDENT „ . . APPELLANT . . .RESPONDENT . . .• APPELLANT . . .RESPONDENT . . APPELLANT . .RESPONDENT . . APPELLANT .'.RESPONDENT . APPELLANT .RESPONDENT Page 1 of 5 2^ Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified (7) iTA 1887/2010 COMMISSPONER OF JNCOME TAX VERSUS KAPOOR INDUSTRIES. (8) ITA 1896/2010 COMMISSIONER OF INCOME TAX VERSUS FUL KANT JHA (9) ITA 1899/2010 COMMISSIONER OF INCOME TAX VERSUS PAL ENTERPRISES (10) ITA 1957/2010 COMMISSIONER OF INCOME TAX , VERSUS PRAVEEN INDUSTRIES PVT. LTD. (11) ITA 1958/2010 COMMISSIONER OF INCOME TAX VERSUS ZENELBNI LEATHER WEAR (12) ITA 1959/2010 COMMISSIONER OF INCOME TAX VERSUS RDCHA APPARELS (13) 1960/2010 COMMISSIONER OF INCOME TAX VERSUS KAPOOR INDUSTRIES ITANo. ITA404/2010 & ors.connected matters „ . APPELLANT . .RESPONDENT . . APPELLANT . .RESPONDENT . . . APPELLANT . .RESPONDENT . . APPELLANT . .RESPONDENT . . APPELLANT . .RESPOWDENT , . •. APPELLANT . .RESPONDENT . . . APPELLANT . .RESPONDENT Page 2 of 5 (14) ITA 1980/2010 COIvSMISSaONER OF INCO!V!E TAX VERSUS AHUJA RADBOS (15) ITA 2074/2010 COIVSMISSBONER OF INCONE TAX VERSUS SHOREWALA OVERSEAS (16) ITA 14/2011 COr/SMISSBONER OF IISJCOME TAX VERSUS SANGEETA JAEN (17) ITA 15/2011 COMMISSIONER OF INCOME TAX VERSUS LEATHER TECH (18) ITA 67/2011 COMMISSIONER OF INCOME TAX VERSUS PUROLATOR INDIA LTD. (19) ITA 177/2011 COMMISSIONER OF INCOME TAX VERSUS BALDEV RAJ JAGGI ITA No. ITA 404/2010 & ors.connected matters .RESPONDENT .RESPONDENT .RESPONDENT . APPELLANT .RESPONDENT . APPELLANT .RESPONDENT Page 3 of 5 (20) 8TA 178/2011 COMMiSSiONER OF INCOME TAX VERSUS INDU GUPTA (21) ITA 181/2011 COMMISSJONER OF INCOME TAX VERSUS SANGEETA JAIN (22) ITA 182/2011 COMMISSBONER OF INCOME TAX VERSUS CLC CORPORATION (23) ITA 184/2011 COMMISSIONER OF INCOME TAX VERSUS CLC CORPORATDON (24) ITA 185/2011 COMMISSIONER OF INCOME TAX VERSUS VIKAS KALRA (25) ITA 187/2011 COMMISSIONER OF INCOME TAX VERSUS ANUJ GOEL . . APPELLANT .• . .RESPONDENT . . APPELLANT .RESPONDENT . , APPELLANT .RESPONDENT . . APPELLANT .RESPONDENT . . APPELLANT •. .RESPONDENT . . APPELLANT .RESPONDENT Judgment Reserved on: 10.02.2011 Decision Delivered On: 18.02.2011 (26) ITA 723/2009 COMMISSBONER OF INCOME TAX ITA No. ITA 404/2010 & ors.connected matters „ . APPELLANT Page 4 of 5 •VERSUS PRSYANKA OVERSEAS P. LTD. . . .IRESPOMDENT COUNSEL FOR THE REVENUE: Mr. Kamal Sawhney, Mr. Abhishek Maratha, Ms. Suruchi Aggarwal, Mr. Anupam Tripathi,Sr. Standing Counsel with Mr. Amit Srivastava, Advocate. COUNSEL FOR THE ASSESSEES: Mr. Ajay Vohra, Advocate with Mr. Kavita Jha, •Mr. Somnath Shukia, Mr. Prakash Kunnar and Mr. Manish Kumar, Mr. O.P. Sapra, ,Mr. Amit Dayal, Mr. Pankaj Jain, Mr. D.K. Goyal, Mr. Vijay Nair and Mr. Manish Chaudhary, Dr. Rakesh Gupta, Advocate with Mr. RK. Aggarwal, Ms. Poonam Ahuja, Advocates. CORAM HON'BLE MR. JUSTBCE A.K. SIKR0 HON'BLE MR. JUSTICE M.L. MEHTA 1. Whether Reporters of Local newspapers may be allowed to see the judgment? 2. To be referred to the Reporter or not? 3. Whether the Judgment should be reported in the Digest? A.K. SiKm, I 1. For orders, see ITA 12 of 2011. .K.SIECIRI) JUDGE JUDGE- FEBRUARY 18, 2011, skb fM.L.MEHTA) ^ ITA No. ITA 404/2010 & ors.connected matters Page 5 of 5 IN THE HIGH COURT OF DELHI AT NEW DELHI Judgment Reserved on: 10.02.2011 Decision; Delivered On: 18.02.2011 12/2011 COMMISSIONER,OF INCOME TAX : ; . VERSUS PARAMOyiNlT IMPEX P¥T. LTD,. • (2) ITA. 404/2010 COMMISSIONER OF INCOME TAX VERSUS 'ARJAN IMPEX PVT. , . . APPEP-LANT 708/2010 COMMISSIONER OF INCOME TAX § • SPENTE^_ DNDUSTRIES (4) I'TA 793/2010 , COMMiSSEONER OF INCOME TAX PHILCO EXPORTS. 927/2010 VERSUS VERSUS COMMISSIONER OF INCOME VERSUS PHILCO EXPORTS 1080/2010 COMMISSIONER OF INCOME VERSUS -SPENTEXiNDUStRIES LTD. nrA 1886/2010 • COMMISSIONER OF INCOME TAX ITA No. ITA 12/2011 & ,ors.connected matters IT . .[RESPONDENT .RESPONDENT- APPELLANT .RESPONDENT .RESPONDENT APPELLANT .RESPONDENT APPELLANT Page 1 of 6 • VERSUS KUMAR SARH (8) ITA 18^7/2010 commdssioner of income tax VERSUS KAPOOR DNDUSTRIES„ • (9)-ITA'1896/2010 COMMDSSiONER OF DNCOME VERSUS KANT JHA /> COMMISSIONER OF INCOME TAX VERSUS ENTERPRISES 1957/2010 , COMMISSIONER OF INCOME VERSUS PRAVEEN INDUSTRIES COMMISSIONER OF INCOME TAX VERSUS ZENELINI LEATHER WEAR (13) ITA 1959/2010 CoWmISSIONER OF INCOME VERSUS RICHA APPARELS (14) 1960/2010 ITANo. ITA 12/2011 & ors.connected matters .RESPONDENT . , APPELLAINT „IRESPONDEN' , „ -APPELLANT .RESPONDEE , , APPELLANT .RESPONDENT . . apEpellant .RESPONDENT .RESPONDENT .RESPONDENT Page 2 of 6 COMMDSSIOWER OF INCOME VERSUS iCAPOOR INDUSTRIES 1980/2010 COMMDSSDONER OF INCOME TAX AHOJA RADIOS 2074/2010 VERSUS t COMMISSIONER OF INCOME VERSUS SHOREWALA OVERSEAS .•f COMMISSIONER OF INCOME ' VERSUS SANGEETA 15/2011 .< COMMISSIONER OF INCOME •f VERSUS LEATHER TECH COMMISSIONER OF INCOME VERSUS PUROLATOR [20) BTA 177/2011 COMMISSIONER OF DNCOME BALDEV RAJ JAGGl 178/2011 VERSUS ITANo, ITA 12/2011 & ors.connected matters „ „ APPELLANT „ APPELLANT . ..RESPONDEi , „ APPELLANT „ . .RESPONDENT , „ .RESPONOjENT . . APPELLANT ' . „ .RESPONDENT .RESPONDENT Page 3 of 5 COMMISSSONER OF INCOME ) ••• • UNDO ©OPTA VERSUS (22) BTA 181/2011 COMMISSIONER OF INCOME TAX' VERSUS SANGEETA 182/20'11 COMMISSIONER OF INCOME TAX VERSUS APPELLAWT .RESPONDENT- IT • „RESPOWIOENT . APPELLANT CLC CORPORATDON .'RESPONDENT- if •COMMISSIONER OF INCOME VERSUS CLC CORPORATION- •C25) O'A 185/2011 COMMISSIONER OF INCOME VERSUS VIKAS KALRA / (261 ITA 187/2011 ' . COMM1SS0ONER OF INCOME TAX j VERSUS ANUJ GOEL „ APPELLANT- .RESPONDENT .RESPONDENT : APPELLANT • Judgment Reserved on:. 10.02.2011 Decision Delivered On: 18.02.2011 723/2009 COMMISSIONER OF INCOME „ APPELLANT ITA No. ITA 12/2011 & ors.corinected matters Page 4 of 5 VERSUS .[RESPONDEi flT COUNSEL FOR THE REVENUE: Fir. •Kamal Ms. Suruchi Standing Cc Advocate. COUNSEL FOR THE ASSESSEES: Mr. Ajay Voh Mr. Somnatti Mr. Manisli , Dayal, Mr. Pa Nair and Mr Gupta, Advo Poonann Ahuj whney, Mr. Abhishek Maratha, Q^ggarwal, Mr. Anupam Tripathi,Sr. unsel with Mr. Amit Srivastava, 1. 2. 3., 'ELE 'BLE MR„ JUSTICE M±. MEH Whether Reporters of Locai new to see the judgment? . To be referred to-the Reporter o Whether the Judgment should b a, Advocate with Mr. Kavita Jha, Shukia, Mr. Prakash Kumar and Kumar, Mr. O.P. Sapra, ,Mr. Amit nkaj Jain, Mr. D.K. Goyal, Mr. Vijay Ma'nish Chaudhary, Dr. Rakesh ;ate with Mr. RK. Aggarwal, Ms. a. Advocates. spapers may be allowed r not? 2 reported in the Digest? 1. All these appeals involved common of convenience, we can reproduce the qi these appeals:- question of law. For the sake estions of law framed in one of \"(a)- 'Whether on a correc relevant statutory provisions, law in directing the Asse deduction under section 80H of \"profit\" on sale of DEPB? interpretation of the Tribunal was justified n ssing Officer to allow of the Act in respect (b)Whether on the facts of th was justified ip law in im assessee would be entitled first proviso below sub-Sectio respect of DEPB Credit utilizejd e present case, Tribunal pliedly holding that the :o deduction as per the n 3 of Section 80HHC in by the assessee?\" 2. The orders passed by the Tribun^ because of the reason that the Tribuna was supposed to) the decision of the ITA case of Topman Export Vs. STO [ITA N dated August, 2009.]. .By that judgriient ITA No. ITA 12/2011 & ors.connected matters in all these cases are brief has simply followed (which it Special Bench, Mumbai in the D. 5769/Mum./2006 decided on ; the Special Bench of the Page 5 of 6. // Tribunal has held that the face value of (iiib) at the time of accrual of income, th DEPB is filed with- the conipetent autho profit in sale of DEPB representing the ex over its face value is liable to be consider® sale. 3. The Revenue had filed the appeal ir Bombay against the aforesaid decision of The Bombay High Court has reversed th^ the judgment of the Bombay High Court of Smcome Tax Vs. KaHpataru Colours a 4. Since the Tribunal had-simply follow Topman Exports (supra) which stands •order passed by the Tribunal in all these c to the' Tribunal to decide these appeals account factual position in all these cases. 5. • These appeals stand disposed of on PB is chargeable'.to tax u/s 28 ^t is, when the application for rity pursuant to .exports and ess of sale proceeds of DEPB d u/s 28(iiid) at the time of its 1 the High Court Adjudicate at the Special Bench of the ITAT. decision of the Tribunal and is' reported as Commiissiioner •, 328 1TR451. ved Special Bench decision in over ruled, we set aside the ases and remit the cases back on merits after taking /into above terms. r C?L. • skb , 2 iTA.No. ITA 12/2011 5( ors.connected matters Page 6 of 6 "