M/S. MITSU INDUSTRIES LTD. V. JT. COMMISSIONER OF INCOME TAX(ASSTT.)

TAXAP/1191/2006

AI Insights

The case involves Mitsu Industries Ltd., the appellant, who contested the inclusion of a notional income from export benefits amounting to Rs. 85,52,950 as taxable income for the assessment year 1995-96. The Income Tax Department rejected the deduction claimed by the assessee and added the amount to the total income. This decision was upheld by the CIT(A) and subsequently by the ITAT. The High Court, referencing a similar case involving the same assessee and the Supreme Court's decision in Excel Industries, ruled in favor of the assessee, allowing the appeal and setting aside the ITAT's order.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 753939 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 28-11-2014
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income-tax v. Excel Industries Ltd., reported in 358 ITR 295, Mitsu Industries Limited vs. Asstt. Commissioner of Income Tax rendered in Tax Appeal No. 1879 of 2005 on 13.11.2014
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S UDHIR M EHTA
• Assessee Lawyers: R K PATEL
• Keywords: Assessment Year 1995-96; Export Benefit; Income tax appellate tribunal; Notional income; Taxable income
• Section: 1038/Ahd/2000

Judgement Text

"O/TAXAP/1191/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1191 of 2006 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ M/S. MITSU INDUSTRIES LTD.....Appellant(s) Versus JT. COMMISSIONER OF INCOME TAX(ASSTT.)....Opponent(s) ================================================================ Appearance: MR RK PATEL, ADVOCATE for the Appellant(s) No. 1 MR SUDHIR M MEHTA, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Page 1 of 4 O/TAXAP/1191/2006 JUDGMENT Date : 28/11/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench ‘D’ (hereinafter referred to as ITAT) dated 05.05.2006 in ITA No. 1038/Ahd/2000 for the Assessment Year 1995-96, the assessee has preferred the present Tax Appeal. 2. This appeal was admitted on 30.04.2007 for consideration of the following substantial question of law: “Whether, on the facts and in circumstances of the case, the Tribunal is right in law in concluding that the alleged notional income from export benefit receivable amounting to Rs. 85,52,950/- has incurred as taxable income for the assessment year under consideration?” 2.1 The assessee Company filed its return of income for the assessment year 1995-96. During the year, the asessee had shown export benefit receivable as Rs. 85,52,950/- and claimed deduction. The Assessing Officer rejected the same and added it to the total income. On appeal before the CIT(A), the CIT(A) dismissed the appeal and upheld the addition made by Assessing Officer. 2.2 Being aggrieved by the order of the first appellate authority, the assessee preferred appeal before the ITAT and the Tribunal vide impugned order dated 05.05.2006 dismissed Page 2 of 4 O/TAXAP/1191/2006 JUDGMENT the appeal confirmed the order passed by CIT(A). Being aggrieved by the said order, the present appeal is filed. 3. Mr. R.K. Patel, learned advocate appearing on behalf of the assessee has submitted that as such the issue involved in the present Tax Appeal is now not res integra in view of the decision of the Apex Court in the case of Commissioner of Income-tax v. Excel Industries Ltd., reported in358 ITR 295. This Court also in the case of very same assessee namely Mitsu Industries Limited vs. Asstt. Commissioner of Income Tax rendered in Tax Appeal No. 1879 of 2005 on 13.11.2014 considering the aforesaid decision has held as under: “4. Heard the learned advocates appearing for the respective parties and considered the submissions. The learned advocate appearing for the appellant has contended that the income which was sought to be included without exercising the option of importing the goods by the department. The same issue has come up for consideration before the Full Bench of the Supreme Court in the case of Commissioner of Income-tax v. Excel Industries Ltd., reported in358 ITR 295, which is squarely applied to the present case. In that view of the matter, without giving further elaborating reasons, the present appeal requires to be allowed. The question is answered in favour of the assessee and against the department. This appeal is allowed.” Page 3 of 4 O/TAXAP/1191/2006 JUDGMENT 4. Having heard learned advocates for both the sides and the question posed for consideration by us reproduced hereinabove and considering the decisions cited, the question which is raised in the present appeal is required to be answered in favour of the assessee. We are not giving any elaborate reasons for the same as this Court in the case of very same assessee has answered the very same question in favour of assessee. 5. In view of the above, the present question raised in the present appeal is answered in favour of the assessee and consequently, the impugned judgment and order passed by the ITAT is set aside. Hence, the present Tax Appeal is allowed. (K.S.JHAVERI, J.) (K.J.THAKER, J) divya Page 4 of 4 "