Niranjan Rice Exports Pvt. Ltd. V. Commissioner of Income Tax-I, Jalandhar

ITA/405/2011

AI Insights

The case involves M/s Niranjan Rice Exports Pvt. Ltd., the appellant, contesting an order by the Income Tax Appellate Tribunal, Amritsar, regarding the assessment year 2004-05. The primary legal contention revolves around the treatment of DEPB/DFRC sale proceeds under Section 28 of the Income Tax Act, 1961, specifically concerning their classification and the computation of profits. The appellant challenged the Tribunal's reliance on a Bombay High Court decision, arguing that the Tribunal failed to address the merits of the case as directed by the High Court's remand order. The High Court of Punjab and Haryana, referencing a Supreme Court judgment, found in favor of the appellant, leading to the remand of the case for re-assessment in line with the Supreme Court's decision.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 796272 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 25-07-2012
• Assessment Year: misc
• Other Referred Cases: M/s Kalapatru Colours & Chemicals, M/s Topman Exports v. Commissioner of Income Tax, Mumbai, M/s Turbo Impex v. Commissioner of Income Tax-II, Ludhiana
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: VIVEK SETHI
• Assessee Lawyers: J S BHASIN
• Keywords: Assessment Year; DEPB/DFRC; Income Tax; Remand order; Substantial questions of law
• Section: 28; 80HHC; 260A

Judgement Text

"ITA No. 405 of 2011 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.M. No. 29896-CII of 2011 and ITA No. 405 of 2011 Date of Decision: 25.7.2012 M/s Niranjan Rice Exports Pvt. Ltd. ....Appellant. Versus Commissioner of Income Tax-I, Jalandhar ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE G.S. SANDHAWALIA. PRESENT: Mr. J.S. Bhasin, Advocate for the appellant. Mr. Vivek Sethi, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1. Delay in refiling the appeal is condoned. 2. This order shall dispose of ITA Nos. 405 and 406 of 2011 as identical questions are involved therein. 3. ITA No. 405 of 2011 has been filed by the assessee under Section 260A of the Income Tax Act, 1961 against the order dated 24.12.2010 (Annexure A-5) passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short “the Tribunal”) in ITA No. 52 (ASR)/2009, for the assessment year 2004-05, claiming the following substantial questions of law:- i) Whether the ITAT was justified in summarily ITA No. 405 of 2011 -2- dismissing the assessee's appeal, by following the Hon'ble Bombay High Court's decision in M/s Kalapatru Colours & Chemicals (supra), on a totally wrong premise that this Hon'ble Court, in its remand order dated 16.08.2010, had concurred with Bombay High Court's view, on the core issue that DEPB/DFRC had no incidence of cost capable to work out profits as envisaged in clauses (iiid) and (iiie) of section 28 of Income Tax Act, 1961? ii) Whether the ITAT was justified in not passing an order of its own, on the merits of the issue in dispute, dilating on the relevant provisions of law and the DEPB/DFRC Scheme, after giving proper opportunity of hearing to assessee, when this Hon'ble Court had remanded the matter to the ITAT for fresh decision in accordance with law, thereby rendering its impugned order unsustainable? iii) Whether the ITAT was justified in holding that the entire sale proceeds of DEPF/DFRC were to be construed as profits as envisaged in clause (iiid) & (iiie) of Section 28, there being no face value attributable to DEPB/DFRC to be further reduced from the sale proceeds, to arrive at the Profits on the transfer of DEPB/DFRC? iv) Whether the order of the Tribunal is legally sustainable and bad in law being perverse? ITA No. 405 of 2011 -3- 2. Learned counsel for the assessee relied upon judgment of the Apex Court in M/s Topman Exports v. Commissioner of Income Tax, Mumbai, (2012) 3 SCC 593, which was followed by this Court in the case of M/s Turbo Impex v. Commissioner of Income Tax-II, Ludhiana (ITA No.361 of 2011, decided on 20.3.2012) to contend that the substantial questions of law are required to be answered in terms of the aforesaid judgments. Learned counsel for the revenue did not controvert the contention that the issue involved herein stands concluded by the aforesaid judgments. 3. Accordingly, we allow the appeals in the same terms. The impugned order dated 24.12.2010 (Annexure A.5) passed by the Tribunal is set aside. The matter is remanded back to the Assessing Officer with a direction to compute the deduction under Section 80HHC of the Act in accordance with law and in the light of judgment of the Hon'ble Supreme Court in the case of M/s Topman Exports (supra). (AJAY KUMAR MITTAL) JUDGE July 25, 2012 (G.S. SANDHAWALIA) gbs JUDGE ITA No. 405 of 2011 -4- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.M. No. 29898-CII of 2011 and ITA No. 406 of 2011 Date of Decision: 25.7.2012 M/s Niranjan Rice Exports Pvt. Ltd. ....Appellant. Versus Commissioner of Income Tax-I, Jalandhar ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE G.S. SANDHAWALIA. PRESENT: Mr. J.S. Bhasin, Advocate for the appellant. Mr. Vivek Sethi, Advocate for the respondent. AJAY KUMAR MITTAL, J. Delay in refiling the appeal is condoned. For orders, see ITA No. 405 of 2011 (M/s Niranjan Rice Exports Pvt. Ltd. v.Commissioner of Income Tax-I, Jalandhar). (AJAY KUMAR MITTAL) JUDGE July 25, 2012 (G.S. SANDHAWALIA) gbs JUDGE "