TRB Exports Pvt. Limited V. Commissioner of Income Tax-II, Aayakar Bhawan, Ludhiana

ITA/25/2012

AI Insights

The case involves M/s TRB Exports Pvt. Limited, the appellant, contesting an order by the Income Tax Appellate Tribunal which had dismissed their appeal regarding the computation of profits allowable for deduction under Section 80HHC of the Income Tax Act, 1961. The Tribunal's decision was influenced by a judgment from the Special Bench of Mumbai ITAT and the Bombay High Court, which the appellant argued was not applicable to their case as it was not from the jurisdictional High Court. The High Court of Punjab and Haryana, referencing a similar case (M/s Turbo Impex v. Commissioner of Income Tax II, Ludhiana), found in favor of the appellant, aligning with the principles set by the Supreme Court in M/s Topman Exports.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 796286 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 01-05-2012
• Assessment Year: misc
• Other Referred Cases: M/s Topman Exports v. Commissioner of Income tax, Mumbai, CIT v. Kalpataru, Yasha Overseas v. CST & Others
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SAVITA SAXENA
• Assessee Lawyers: RAJIV SHARMA
• Keywords: Deduction under section 80HHC; DEPB credit; Export incentive; FOB value; Computing profits
• Section: 80HHC; 260A; 28 (iiid)

Judgement Text

"ITA No.25 of 2012 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.25 of 2012 Date of decision: 01-05-2012 M/s TRB Exports Pvt. Limited ...Appellant Versus Commissioner of Income Tax-II, Aayakar Bhawan, Ludhiana ...Respondent CORAM: HON'BLE MR.JUSTICE AJAY KUMAR MITTAL HON'BLE MR. JUSTICE GURMEET SINGH SANDHAW ALIA Present: Mr. Rajiv Sharma, Advocate for the appellant. Ms. Savita Saxena, Advocate for the respondent. Ajay Kumar Mittal,J. 1. This order shall dispose of ITA Nos.25 and 26 of 2012 as learned counsel for the parties are agreed that common questions of law and facts are involved in both the appeals. 2. The assessee has preferred ITA No.25 of 2012 under section 260A of the Income Tax Act, 1961 (in short, “the Act) against the order dated 30.9.2011, Annexure A.6 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (for brevity, “the Tribunal”) in ITA No.813/Chd/2011 for the assessment year 2001-02, claiming following substantial questions of law:- i) Whether ITAT was justified in dismissing the appeal of the appellant and thereby reversing its own earlier order by following the judgment of Special Bench of Mumbai ITAT in the case of M/s Topman by blindly following and confirming the judgment of Hon'ble Bombay High Court by holding that DEPB credit being an export incentive received by the assessee in proportion to the FOB value of its export has no face value and the amount received in ITA No.25 of 2012 2 entirety on its transfer is to be considered while computing the profits allowable for deduction under Section 80HHC of the Act? ii) Whether ITAT was justified in dismissing the appeal of the appellant by following the judgment of Hon'ble Bombay High Court in CIT v. Kalpataru whereas the decision in CIT v. Kalpataru being of non jurisdictional High Court was not applicable/binding on the Chandigarh not being judgment of the jurisdictional High Court? iii)Whether ITAT was justified in dismissing the appeal of the appellant without considering that DEPB has a cost in view of the ratio laid down by the Apex Court in Yasha Overseas v. CST & Others? iv)Alternatively, whether the ITA T Chandigarh was justified in concurring with the findings of Hon'ble Bombay High Court that the entirety of the sale consideration of DEPB falls within the purview of section 28(iiid) there being no face value of DEPB to be reduced from the total sale consideration for arriving at the profits on the transfer of DEPB? v) Whether the orders of the Tribunal are legally unsustainable and bad in law and perverse? 3. Notice of motion. Ms. Savita Saxena, Standing counsel for the revenue-respondent, who is present in the Court, accepts notice. 4. In view of consensus between the parties, the appeals are taken up for final disposal today itself. 5. Learned counsel for the parties are agreed that the present appeals are squarely covered by judgment of 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) wherein a bunch of appeals in the light of the principles enunciated by the Apex court in the case of M/s Topman Exports v. Commissioner of Income tax, Mumbai, (2012) 3 SCC 593 have been allowed. ITA No.25 of 2012 3 6. Accordingly, the present appeals are also allowed in terms of the judgment of the Apex court in the case of M/s Topman Exports (supra). The impugned order passed by the Tribunal dated 30.9.2011, Annexure A.6 in both the cases 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 Apex Court in the case of M/s Topman Exports (supra). (Ajay Kumar Mittal) Judge May 01, 2012 (Gurmeet Singh Sandhawalia) 'gs' Judge "