CIT V. LEATHER TECH

ITA/15/2011

AI Insights

The case involves multiple appeals by the Commissioner of Income Tax against various respondents, primarily concerning the interpretation and application of Section 80HHC of the Income Tax Act in relation to the 'Profit' on sale of DEPB (Duty Entitlement Pass Book) credits. The core legal issue revolves around whether the Tribunal was justified in allowing the deduction under Section 80HHC for the profits on the sale of DEPB, which was contested by the Commissioner of Income Tax. The High Court's decision to remit the cases back to the Tribunal was influenced by a change in the legal interpretation following the Bombay High Court's overruling of the Special Bench decision in Topman Exports.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 720446 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 18-02-2011
• Assessment Year: misc
• Other Referred Cases: Topman Exports vs. ITA No. 57, Commissioner of Income Tax vs. Kalpataru Contractors and Chemicals
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: AJAY VOHRA; KAVITA JHA; SOMNATH SHUKLA; PRAKASH KUMAR; 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
• Keywords: DEPB; High Court; Income Tax; Special Bench; Tax Deduction
• Section: 80HHC; 28(iiib); 28 (iiid)

Judgement Text

">. *INTI-IEHIGI-ICOI,.IRTOFDELI-IIAThIEWDEL!-!I + )udgment Reserved on: 10 '02'201I Decision Delivered On: 18.02.20II (1) trA 4O4/2OLO COMMISSIOI{ER OF II{COME TAX . ' . APPELLANT VERSUS I RJAN IMPEX PVT. [-TD. . . .RESPONDE]UT (2) lrA 7OE/2OLO COMMISSIONER OF INCOME TAX . . . APPEI-LANT VERSUS SPENTEX INDI,.ISTRIES LTD. . . .RESPOT{DEhNT ,i (3) ITA 793/20L0 t COMMISSNONER OF II{COME TAX . , . APPEX-LANT VERSUS PHlLco EXPoR,T5. ' ' 'R'ESPoNDENT I, (4) trA e27l2O1\"O COMMISSIONER, OF INCOME TAX ' . APPEI.LANT VERSUS P!.III.CO EXPORTS ,RESPONDEhIT (s) rrA Lo8o/2ox.o COMMISSIONER. OF INCOME TAX . . APPEI-LANT VERSUS SPEI ITEX INDUSTRIES [.TD. . .RESPONIDEhIT' (6) rrA r.886/20L0 COMMISSIONER, OF INCOME TAX . APPELI.ANT VERSUS NITIN KI,'MAR, SADI.I . .RESPONDENIT lrA No. ITA 40412010 & ors.connected matters Page 1 of 5 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 r 6 . (7) ITA 1887/2OLO CCIMM]SSIONER OF INCOME TAX . . APPELLANT VERSUS KAPOOR INDI.'5TRIES. . .RESPONDENT (8) lrA L896/2OLO COMMISSIONER OF INICOME TAX ' . APPELLANT VERSUS FI,JL KANT Jl-lA . . .RESPONDENT (e) ITA L899/20L0 COMMISSIONER OF INCOME TAX . . ' APPELLANT' VERSUS PAL ENTERPRISES . .RESPOhIDENIT (L0) rrA L9s7l2OLO COMMISSIONER. OF INCOME TAX . . APPEI.LANT VERSUS PRAVEEN INIDUSTRIES PVT. LTD. . .RESPONDEIVT (11) rrA L9s8/2OLO COMMISSIONER, OF IIVCOME TAX . . . APPEI.LAIVT VERSUS ZENELINI LEATHER WEAR, . .RESPONDENNT (L2) rrA r.959/20L0 COMMISSIONER OF INICOME TAX . . . APPEI-LANT VERSUS R,ICIIA APPARELS . .RESPONDETUT (13) L960/20L0 COMMISSIONIER OF INCOME TAX . . . APPELI.ANT VERSUS KAPOORIT IDUSTRIES .,.RESPONDEFJT lrA No. ITA 40412010 & ors.connected matters Page 2 of 5 (14) lTA L980/20L0 COMMISSIONER OF INCOME TAX . ' APPELLAI T VERSUS A!-ltf.!A RADIOS .RESPONDENIT ( 15) trA 2O7 4|?OLO COMMISSIONER OF INCOME TAX . . APPEL!-ANT VERSUS SI.IOREWALAOVERSEAS ...RESPONDENIT (L6) ITA L4l20LL COMMISSIONER OF INCOME TAX . . APPEI.LAT{T VERSUS SAI IGEETAJAIN ...RESPONDEIUT (L7) lrA Ls/20L1 COMMISSIOI{ER OF IIVCOME TAX . . APPEI.LANT VERSUS I.EATI-IERTEChI ., 'RESPOIVDENIT (18) lTA 67l20LL COMMISSIONER OF INCOME TAX . . APPELLAIUT VERSUS , PUR,OLATOR INDIA LTD. . . .RESPONDENIT (LgI ITA L77IZOLL COMMISSIOhIER OF INCOME TAX . . APPEI-LAIUT VERSUS EALDEV RAJ .IAGGI . . .RESPOIVDEIUT rA No. ITA 4O4|2OIO & ors.connected matters Page 3 of 5 /) ,/ . (20) lrA L78/20XL COMMISSIONNER, OF IIUCOME TAX . . AFPELI.ANT VERSUS INDUGi,.IPTA .. 'RESPONDEr{T (21) lrA 18L/20LL COMMISSIONER OF INCOME TAX VERSUS SANGEETA JA!N Qzl rrA L82|20LL COMMISSIOTUER OF INCOME TAX VERSUS CLC CORPORATION (231 lrA L84/20LL COMMISSIONER OF INCOME TAX VERSUS CLC CORPORAT'ION (24) lTA n8s/201l COMMISSNONER OF INCOME TAX . VERSUS a vlKAs KALRA (251 trA- L87I?ALL COMMISSIONER OF INICOME TAX VERSUS AN|UJ GOEL .,RESPOIUDENIT Judgment Reserved on: I0.02.2011 Decision Delivered On: 18.O2.207I (26r trL 723nAA9 COMMISSIONER, OF INCOME TAX . . APPELN-ANT rA No. ITA 4O4i2OLO & ors.connected matters Page 4 of 5 . . APPELLANT . . .RESPOIVDENIT . . APPELLAhIT . . .RESPONDEi{T . . APPEI-LANT . . .RESPONDENIT . . APPEI-I.ANT . . .RESPOhIDEhIT . . APPELLANIT .VERSUS PRIYAIUKA OVERSEAS P. I.TD. . . .RESPONDENT 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 FORTHE ASSESSEES:Mr. Ajay Vohra, Advocate with Mr, l(avita Jha, Mr. Somnath Shukla, Mr. Prakash Kumar 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. Rl(. Aggarwal, Ms' Poonam Ahuja, Advocates' CORAM :- hloN'ELE MR. JLISTICE A.K. SIKRI HON',BLE MR. JUST'ICE M.l-. MEhlrA 1. Whether Reporters of Local newspapers may be allowed to see the Judgment? To be referred to the Reporter or not? Whether the Judgment should be reported in the Digest? A,K. SIKRI, I. 1. For orders, see ITA 12 of 20LI. FEtsRUARY ].8, 2O1.L, skb 2. 3. M.L.MEI{TA) rn ruo. ITA 40412010 & ors.connected matters Page 5 of 5 .(' I rl ! I i 'k !N TFIE l-[[G$-t CO[.[RT OF DEI.HI AT NEW DFLF{I (1). ITA x2l20x4 COMMTSSIOruER @F IhICOME T'AX VERSUS PARAMOI..INT IMPEX PVT. I.T'D\" (2) lTA 4o4l20r-q COMMISSIONIER OF IMICOME T'AX VERSUS - AR.'AN| IMPEX PVT. !-T'D. (3) ITA 708/20L0 COIVXMISSIONER, OF INCOME TAX VERSUS SPEN'TEX IN D[,.!STRIE5 LT'D. (4) ITA 793/20]LO . COMMISSIONER. OF INCOME TAX VERSUS Phlil-co EXPoRTS. (5) trA. 927|ZALA ', COMMISSXONIER OF IRICOME ''I|AX VERSUS . Phlln-co EXPORTS (6) rTA 1080/20XO COMMISSIONJER OF INICOME TAX VERSUS SPENTEX ] NI DI.ISTRIES LTD. (7) ITA L886/20].0 COMMISSIONXER OF INCOME TAX nANo. ITA I2|20II & ors.connected matters [t .:r 't I I Judgmint Reserved on: 10.02.20II Decision Delivered On: 18.02,2011 . . . APPELLAhIT . . RESPOIVDE[ IT . . . APPELLANT . RESPONIDENT . . APPELB.ANT . . .RESPOIUDENT . . . APPELI.ANT \" \" .RESPON{DEhIT . . APPEI-LANdT ..RESPONDENT . . APPELLAIVT ..RESPONIDENIT . APPE!-!.AhIT Page 1 of 6 VERSUS n',0 lT'l n! KIJ MAR S/ Dl-i (8) rrA LE87/20LO coMMISStOnilER OF IIUCOME Tl X VERSUS KAPOOR IND!.!STRIE5. (9) rTA 1896/2OLO COMMISSXONER OF INICOME TAX VERSUS F[,.t[- KAIUT' j!-nA l- (no) rrA x899/2010 COMMISSIONER OF INCOME TAX VERSUS PA[. ,E[ ITERPRXSES (1L),lrA X9s7/2OL0 COMMISSIONIER OF IRICOME T'AX VERSUS PRAVEEIU [TVD[.IST'RIE5 PVT. [-TD, (x2) lTA L9s8/201-O COMMISSIONNER OF INXCOME TAX VERSUS ZEI ! EI-[N I I.EATI-ilER WEAR (L3) rTA L9s9/20X0 COMMISSXONER OF INUCOME TAX VERSUS RICh[A APPARE[.5 ( 14) ].960/20L0 lrA No. ITA l2l2OII & ors.connected matters I I Page 2 of 6 )l ..RESPONDEIUT . . APPEI.LANiT ..REsPO] [DENT . . APPELI-ANIT . . .RESPONDENT . . . APPEI.LANT ..RESPOI IDEIUT . . APPET!-AIVT ..RESPOI{DENT . . . APPE[-[-ANT' ..RESPOI{DE]UT . . . APPELLAIUT ..RESPOIVDEIUT C.OMMISSIONIER OF IIUCOME TAX VERSUS KAPOOR It trDi..IsTR[E5 (1'5) XTA X.98O/20n O COMMISSIONIER OF [[ COME TAX VERSUS AFlU.lA RADTOS (16) t'TA 2@7412{IJ1\"O COMMiSS[OhJER OF INC@ME TAX VERSUS 5h[OREWAI-A OVERSEAS (L7) [T'A L4/2011 COMMISSIONIER OF INICOME T'AX VERSUS SAN|GEETA JAnNI (LEl rTAL5/20n1 COMM[ss[ORIER OF IIUCOME TAX VERSUS [.EAT[.{ER T'EC[.I (x9) ITA 67l20x{ COMMISSIONER OF INICOME T'AX . VERSUS P[,.I ROX-ATOR I NX DIA [.TD\" (20) rTA L77l2onr_ COMMISSIOI{ER OF NNCOME TAX i VERSUS BALDEV RAj JAGGI (2n) rrA L78/2011L rrA No. ITA I2|2OL1, & ors.connected matters ')/ . . APPE[-[-AI{T . . .RESPONiDE[ !T . . APPELI.AIUT ..RESPONDENT . . APPEI.LAIVT . . \"RESPOT |DENT . \" APPEI.LAIVT . . .R.ESPORIDEI{T . . APPELLAI IT . . .RESPONNDEhIT . . APPELI.ANT . \" .RESPONIDENT :, AFPELLAIUT . . .RESPONDENT Page 3 of 6 COMMISSNONER OF INICOME TAX VERSUS IND[.' GN'[PTA (22) XTA L8l-/20nL COMIVIISSIONIER OF ]hICOME TAX VERSUS SAnnGEETA JAIrU (23) lrA n82l20nX COMMISSIOIUER, OF INICOME TAX VERSUS cLc coRPoRATlohl (241 !'nA 3.84/20LL COMMISSIONER OF INCOME T'AX c[-c coRPoRAT[on{ VERSUS (2s) rTA L85/20LL COMMISSIOIVER OF ITVCOME T'AX VERSUS VIKAS KAI.RA (26) XTA L87/2011 COMM]sSIORIER OF IIVCOME TAX VERSUS ANttj GoEL Judgme Decisio (27r tTA 7Z3|2AO9 COMMIsSIONER OF II ICOME TAX re ruo. ITA I2l2O1,l & ors.connected matters 9 . . APPELLANIT . . .RESPONiDEhIT ; . . APPEL!-AIUT . . .RESPONDENT . . APPE!-LANT . . .REsPOIUDENT . . APPELLA$ IT . . .RESPOIUDENT . . APPEI-LANT' , . .RESPONDENT' . . APPELLANT ..REsPONIDENilT. nt Reserved on: 10.02.2011 n Delivered On: 18.02.2O1I . . APPEL[-A[ XT I Page 4 of 6 t . . .RESpOnlDEt lT' hney, Mr. Abhishek Maratha, Tripathi;Sr. Srivastava, ggarwal, Mr. Anupam unsel with Mr. Amit a, Advocate with Mr. Kavita Jha, Shukla, Mr. Prakash Kumar and Kumar, Mr. O.P. Sapra, ,Mr. Amit kaj Jain, Mr. D.K. Goyal, Mr. VijaY Manish Chaudhary, Dr. Rakesh ate with Mr. RK. Aggarwal, Ms. , Advocates, papers may be allowed not? reported in the Digest? question of law. For the sake estions of law framed in one of interpretation of the Tribunal was justified n sing Officer to allow C of the Act in respect e brief rhich it i in the ded on of the e5of6 esent case, Tribunal y holding that the eduction as per the cf Section 80HHC in the assessee?\" r all these cases ar( s simply followed (w ecial Bench, Mumbai 769lVum./2006 decir :, the Special Bench Pana VERSUS PR.[YA[ [KA OVER.SEAS P, !-T'D, COUNSEL FOR THE REVENUE: Mr. Kamal Ms.'Suruchi Standing C Advocate. COUNSEL FOR THE ASSESSEES:Mr. Ajay Vo Mr. Somna Mr. Manish Dayal, Mr. P Nair and Mr Gupta, Advo Poonam Ahuj CORAM :- HOnX',tsLE MR. JLST'ICE A,K. 5[ t-toNt'B[-E MR. j[,,!ST',XCE M\"!-. ME 1. Whether Reporters of Local n to see the Judgment? To be referred to the Reporter Whether the Judgment should b A.K. SIKRI, [, 1. All these appeals involved commo of convenience, we can reproduce the q these appeals:- \"(a) Whether on a corre relevant statutory provisions law in directing the Ass deduction under section B0H of \"orofit\" on sale of DEPB? 2. 3, (b)Whether on the facts of thie pre . was justified in law in imflliedly assessee would be entitled to de, first proviso below sub-Sectioln 3 ol ': respect of DEPB Credit utilizep by t 2. The orders passed by the Tribunfl in because of the reason that the Tribunal has was supposed to) the decision of the ITA-[- Spe case of Tapman Expart Vs. tf@ llTA Np. 57r dated 11'h August, 2009.1. By that judglpent, I rA No. ITA 72I2OII& ors.connecteO matters i i I I ---l\"_-- r I Tribunal has held that the face value of D$PB is chargeable to tax u/s 2B (iiib) at the time of accrual of income, tnft is, when the application for DEPB is filed with the competent authlrity pursuant to exports and profit in sale of DEPB representing the \"\"[\"r, of sale proceeds of DEPB over its face value is liable to be considerdd u/s 28(iiid) at the time of its sale. 3. The Revenue had filed the appeal ifl the High Court Adjudicate at Bombay against the aforesaid decision of lthe Special Bench of the ITAT. The Bombay High Court has reversed thf decision of the Tribunal and the judgment of the Bombay High Court lis reported as Carmrnissioner af lncome Tax Vs, Kalpatarw Cotraurs a'pd Chernicals, 328 ITR 457. 4. Since the Tribunal had simply follofed Special Bench decision in I Topman Exports (supra) which stands lover ruled, we set aside the I order passed by the Tribunal in all these cpses and remit the cases back to the Tribunal to decide these appeal$ on merits after talcing into account factual oosition in all these cases.l bove terms. These appeals stand disposed of on 5. .!ri DGE -64-ce-p- (M,L.MEhlrA) jTJDGE FEBR[..IARV n 8, 203.n, skb Page 6 of 6 ors.connected matters re No. ITA I2|2OII & "