COMMISSIONER OF INCOME TAX JALANDHAR-II V. M/S HANSA EXPORT CORPORATION

ITA/402/2010

AI Insights

This case involves an appeal by the Commissioner of Income-tax, Jalandhar-I against M/s Hansa Export Corporation concerning the interpretation of profit calculation on the transfer of DEPB (Duty Entitlement Pass Book) under sections 28(iiid) and 28(iiie) of the Income Tax Act, 1961. The core legal dispute centered on whether the total sale consideration, including the face value and premium of DEPB, should be considered as profit chargeable under the specified sections. The Income Tax Appellate Tribunal had previously ruled on this matter, and the High Court of Punjab and Haryana at Chandigarh decided to dispose of the appeal by aligning with the decision in a similar case, ITA No. 299 of 2010.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 719473 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 27-08-2010
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax v. M/s. F.C. Sondhi
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Assessee Lawyers: VIVEK SETHI
• Keywords: Assessment Year; DEPB; Income Tax; Profit; Sale Consideration
• Section: 80HHC; 260A; 28 (iiid); 28(iiie)

Judgement Text

"ITA No. 402 of 2010 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 402 of 2010 Date of Decision: 27.8.2010 Commissioner of Income-tax, Jalandhar-I ....Appellant. Versus M/s Hansa Export Corporation Basti Nau ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Vivek Sethi, Advocate for the appellant. ADARSH KUMAR GOEL, J. 1. This appeal has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against the order dated 23.10.2009 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as “the Tribunal”) in ITA No. 228 (ASR)/2009 for the assessment year 2004-05, proposing to raise following substantial questions of law:- “I. Whether on the facts and circumstances of the case the ITAT was right in law in not holding that the total sale consideration inclusive of face value of DEPB and premium amount received thereof represents profit chargeable under sections 28(iiid) and 28(iiie) of the ITA No. 402 of 2010 -2- Income Tax Act, 1961? II. Whether on the facts and circumstances of the case the ITAT was right in law in not holding that profit on transfer of DEPB entitlement represents the entire amount inclusive of premium of sale of such DEPB? III. Whether on the facts and circumstances of the case the ITAT was right in law in holding that the word “profit” referred to in section 28(iiid) and 28(iiie) of Income Tax Act, 1961 means the difference between the sale price of DEPB and the face value of DEPB ignoring the fact that the entire amount represents the profit in the hands of assessee? IV. Whether on the facts and circumstances of the case the ITAT was right in law in deducting the face value of DEPB from sale price of DEPB for calculating profit under section 28(iiid) and 28(iiie) of Income Tax Act, 1961 as if the face value is the cost incurred by the assessee to acquire the DEPB? V. Whether on the facts and circumstances of the case the ITAT was right in law in holding that the word profit referred to in sections 28(iiid) and 28(iiie) of the Income Tax Act, 1961 requires any artificial cost to be interpolated to ITA No. 402 of 2010 -3- the extent that the face value of DEPB/DFRC should be deducted from the sale proceed for the purpose of determination of deduction under section 80HHC of the Income Tax Act, 1961? VI. Whether on the facts and circumstances of the case, the ITAT has failed to appreciate that deduction u/s 80HHC of the Income Tax Act, 1961 was rightly computed in accordance with amendment made by the Taxation Law (Amendment) Act, 2005 with retrospective effect from 01.04.1998?” 2. Learned counsel for the revenue states that this Court has disposed of identical matter being ITA No. 299 of 2010 (Commissioner of Income Tax v. M/s. F.C. Sondhi), decided on 16.8.2010. 3. Accordingly, this appeal is disposed of in same terms. (ADARSH KUMAR GOEL) JUDGE August 27, 2010 (AJAY KUMAR MITTAL) gbs JUDGE "