COMMISSIONER OF INCOME TAX V. M/S PREET FORGINGS PVT. LTD.

ITA/534/2008

AI Insights

The case involves the Commissioner of Income Tax III Ludhiana as the appellant and M/s Preet Forgings Pvt. Limited as the respondent. The core issue was whether the deduction under Section 80HHC should be calculated without reducing the deduction under Section 80IB from the profits of the business. The Income Tax Appellate Tribunal had previously ruled in favor of the respondent, leading to the revenue's appeal to the High Court. The High Court's decision referenced several precedents, including judgments from the Kerala and Delhi High Courts, which supported the view that deductions under Section 80IB should be considered when calculating deductions under Section 80HHC.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 718784 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 10-10-2012
• Assessment Year: misc
• Other Referred Cases: Asian Exim International v. Commissioner of Income Tax, Jalandhar, Punjab, Olam Exports (India) Limited v. Commissioner of Income Tax, Great Eastern Exports v. Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: PANKAJ JAIN
• Assessee Lawyers: RAJESH KATOCH
• Keywords: Assessment Year 2004-05; Deduction; Income Tax; Section 80HHC; Section 80IB
• Section: 143(3); 80HHC; 80IB; 260A

Judgement Text

"ITA No.534 of 2008 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.534 of 2008 (O&M) Date of decision:10.10.2012 The Commissioner of Income Tax III Ludhiana ...Appellant Versus M/s Preet Forgings Pvt. Limited ...Respondent CORAM: HON'BLE MR.JUSTICE AJAY KUMAR MITTAL HON'BLE MR. JUSTICE GURMEET SINGH SANDHAW ALIA Present: Mr. Rajesh Katoch, Advocate for the appellant. Mr. Pankaj Jain, Advocate for the respondent. Ajay Kumar Mittal,J. 1. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 26.12.2007, Annexure A.3 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh (for brevity “the Tribunal”) in ITA No.986/CHANDI/2007, for the assessment year 2004-05, claiming following substantial question of law:- “Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is justified in allowing deduction under Section 80HHC without reducing the deduction under Section 80IB from the profits of the business?” 2. Briefly, the facts as narrated in the appeal may be noticed. The assessee is a private limited company engaged in the export of manufactured Tractor Linkage parts and spanners and trading of miscellaneous items. It filed its return of Income for the previous year relevant to assessment year 2004-05 showing income of ` 9,81,154/- on 31.10.2004. During the course of assessment proceedings, it was noticed by ITA No.534 of 2008 (O&M) 2 the Assessing Officer that the assessee had claimed deduction under Sections 80HHC and 80IB of the Act at ` 27,07,091/- and ` 29,14,392/- respectively. While computing deduction under Section 80HHC of the Act, the Assessing Officer deducted an amount of ` 3,62,172/- which was allowed as deduction under Section 80IB of the Act from the profits of the business. Assessment was framed under Section 143(3) of the Act at an income of ` 50,05,765/- vide order dated 22.12.2006, Annexure A.1. Aggrieved by the order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 28.9.2007, Annexure A.2, the appeal was partly allowed and a direction was issued to the Assessing officer to allow deduction under Section 80HHC of the Act without reducing the deduction allowed under Section 80IB of the Act from the profits of the business. Not satisfied with the order, the revenue went in appeal before the Tribunal. Vide order dated 26.12.2007, Annexure A.3, the Tribunal dismissed the appeal. Hence the present appeal by the revenue. 3. We have heard learned counsel for the parties and perused the record. 4. The issue arising for consideration in this appeal is whether deduction allowable under Section 80HHC of the Act is to be worked out without reducing the deduction under Section 80IB of the Act from the profits of the business. 5. The matter is no longer res integra. This Court in Asian Exim International v. Commissioner of Income Tax, Jalandhar, Punjab, ITA No.469 of 2010, decided on 18.4.2011, considering similar issue had come to the conclusion that Section 80-IA(9) barred claim for deduction under any other provision of Chapter VI-A if deduction under Section 80I of the ITA No.534 of 2008 (O&M) 3 Act had been allowed. Relying upon the judgments of the Kerala High Court in Olam Exports (India) Limited v. Commissioner of Income Tax, (2010) 34 DTR Judgments 132 and Delhi High Court in Great Eastern Exports v. Commissioner of Income Tax, (2011) 49 DTR Judgments 33, it was held that while calculating deduction under section 80HHC of the Act, the deduction under Section 80IB of the Act was required to be reduced from the profits of the business. 6. In view of the above, the substantial question of law is answered in favour of the revenue and against the assessee. The appeal is allowed. (Ajay Kumar Mittal) Judge October 10, 2012 (Gurmeet Singh Sandhawalia) 'gs' Judge "