CIT V. M/S TRB EXPORTS P LTD

ITA/548/2010

AI Insights

The case involves the Commissioner of Income Tax-II, Ludhiana as the appellant and M/s T.R.B. Export Pvt. Ltd. as the respondent. The appeal was filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chandigarh Bench, which had addressed issues related to the profit chargeable under sections 28(iiid) and 28(iiie) of the Income Tax Act concerning the sale of DEPB (Duty Entitlement Pass Book) and its premium. The substantial questions of law raised pertained to the interpretation of 'profit' in the context of DEPB transactions and the appropriate calculation for deductions under section 80HHC of the Income Tax Act, 1961. The High Court of Punjab and Haryana at Chandigarh, presided over by Justice Adarsh Kumar Goel and Justice Ajay Kumar Mittal, decided to dispose of the appeal by aligning with the precedent set in a similar case decided earlier in the year.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 720611 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 16-11-2010
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax v. M/s The Designer
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Assessee Lawyers: DENESH GOYAL
• Keywords: Calculation of profit; Deduction under section 80HHC; DEPB; Premium amount; Profit chargeable; Sale Consideration; Transfer of DEPB entitlement
• Section: 80HHC; 260A; 28 (iiid); 28(iiie)

Judgement Text

"ITA No. 548 of 2010 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 548 of 2010 Date of Decision: 16.11.2010 The Commissioner of Income Tax-II, Ludhiana ....Appellant. Versus M/s T.R.B. Export Pvt. Ltd. ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Denesh Goyal, Advocate for the appellant. ADARSH KUMAR GOEL, J. 1. This order will dispose of ITA Nos. 548 and 623 of 2010. 2. ITA No. 548 of 2010 has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 against order dated 19.11.2009 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (B) in ITA No. 857/CHD/2009, for the assessment year 2002-03, proposing 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. 548 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. 548 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?” 3. Learned counsel for the revenue states the matter is covered by order of this Court dated 13.9.2010 in ITA No. 424 of 2010 (Commissioner of Income Tax v. M/s The Designer). 4. Accordingly, these appeals are disposed of in same terms. 6. A copy of this order be placed on the file of the connected case. (ADARSH KUMAR GOEL) JUDGE November 16, 2010 (AJAY KUMAR MITTAL) gbs JUDGE "