M/s Nahar Spinning Mills Ltd., Ludhiana V. DCIT, Ludhiana

MA 341/CHANDI/2005

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5522 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 year(s) 5 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-04-2016
• Assessment Year: 1997-1998
• Appeal Filed On: 05-12-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Business income
• Section: 80HHC

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER M.A. NO. 341/CHD/2005 (IN ITA NO. 628/CHANDI/2000) ASSESSMENT YEAR: 1997-98 M/S NAHAR SPINNING MILL LTD., VS. THE COMMISSIONE R OF INCOME TAX, LUDHIANA LUDHIANA (APPELLANT) (RESPONDENT) APPELLANT BY : SH. NAVDEEP SHARMA, RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 28.04.2017 DATE OF PRONOUNCEMENT : 19.05.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THIS MISC. APPLICATION HAS BEEN RESTORED BY THE HON 'BLE PUNJAB & HARYANA HIGH COURT TO THIS TRIBUNAL FOR DECISION AF RESH VIDE ORDER OF THE HON'BLE HIGH COURT DATED 6.3.2014 PASSED IN ITA NO. 201 OF 2007. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DERIVES INCOME FROM MANUFACTURING AND EXPORT OF COTTON YARN, WOOLLEN HO SIERY GARMENTS AND ALSO TRADES IN COTTON YARN. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 1997-98 ON 1.12.1997 DECLARING INCO ME AT RS. 14,79,75,930/-. THE ASSESSING OFFICER VIDE ORDER DA TED 18.1.2000) FRAMED 2 THE ASSESSMENT AT RS. 18,91,45,241/-. FEELING AGG RIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(APPEALS) WHO VIDE OR DER DATED 9.6.2000 PARTLY ALLOWED THE APPEAL. NOT FEELING SATISFIED, THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ORDER DATED 7.10.2005 PARTLY ALLOWED THE APPEAL. HOWEVER, THE CLAIM OF THE ASSES SEE THAT INTEREST INCOME OF RS. 7,99,88,254/- BE ASSESSED AS BUSINESS INCOME AND COMPUTATION OF DEDUCTION U/S 80HHC OF THE ACT BE MADE ACCORDINGLY WAS REJECTED. AGAINST THE SAID ORDER DATED 7.10.2005, THE ASSESSEE FILED THE PRESENT APPLICATION BEFORE THE TRIBUNAL WHICH VIDE ORDER DATED 15.5.20 06 WAS ALLOWED BY THE TRIBUNAL HOLDING THAT THE ASSESSING OFFICER SHOULD EXCLUDE 90% OF THE GROSS INTEREST FROM THE PROFITS OF THE BUSINESS FO R COMPUTATION OF DEDUCTION U/S 80HHC OF THE ACT. 3. THE REVENUE PREFERRED APPEAL AGAINST THE SAID OR DER DATED 15.5.2006 OF THE TRIBUNAL BEFORE THE HON'BLE HIGH COURT. THE HON'BLE HIGH COURT VIDE ORDER DATED 6.3.2014 (SUPRA) HAS OBSERVED THAT IN THE IDENTICAL MATTER IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 200 3-04 AND ALSO IN THE CASE OF ITS SISTER CONCERN M/S NAHAR EXPORTS LTD., LUDHI ANA FOR ASSESSMENT YEAR 2004-05, WHERE THE TRIBUNAL FOLLOWING THE JUDGEMENT OF THE HON'BLE APEX COURT IN HERO EXPORTS VS. CIT [2007] 295 ITR 454 (S C), HAS ADJUDICATED IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE VIDE ORDE R DATED JANUARY 28, 2005 AND DECEMBER 31, 2007 RESPECTIVELY. IT HAS BEEN FUR THER OBSERVED BY THE HON'BLE HIGH COURT THAT IT IS UNDISPUTED THAT THE O RDERS OF THE TRIBUNAL HAVE BECOME FINAL AS NO FURTHER APPEALS HAVE BEEN C ARRIED AGAINST THE SAME. 3 4. THE LD. DR COULD NOT PRODUCE BEFORE US ANY DECI SION OF THE HIGHER AUTHORITIES CONTRARY TO THE DECISION DATED 28.1.20 08 PASSED BY THE TRIBUNAL IN THE OWN CASE OF ASSESSEE FOR ASSESSMENT YEAR 200 3-04 AND ORDER DATED 31.12.2007 IN THE CASE OF SISTER CONCERN OF THE ASS ESSEE FOR ASSESSMENT YEAR 2004-05. 5. THE ISSUE RAISED IN THE PRESENT MISC. APPLICATIO N, THUS, IS COVERED BY THE ABOVE DECISIONS OF THE TRIBUNAL WHICH HAVE UNDI SPUTEDLY BECOME FINAL. THE ABOVE DECISIONS OF THE TRIBUNAL ARE SQUARELY AP PLICABLE TO THE FACTS OF THE PRESENT CASE. RESPECTFULLY FOLLOWING THE PRECE DENT, WE DIRECT THE ASSESSING OFFICER TO EXCLUDE 90% OF THE GROSS INTER EST INCOME FROM THE ELIGIBLE PROFITS FOR DEDUCTION U/S 80HHC. 6. IN THE RESULT, THIS MISC. APPLICATION OF THE ASS ESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.05.2017 SD/- SD/- ( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19 TH MAY, 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR