ITA No. 271 of 2010 (O&M) 1 IN HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 271 of 2010 (O&M) Date of decision: 2.5.2017 Nexo Industries Private Limited Appellant Vs. Commissioner of Income Tax, Ludhiana ..Respondent CORAM: HON BLE MR. JUSTICE AJAY KUMAR MITTAL HON BLE MR. JUSTICE RAMENDRA JAIN Present: Mr. S.K. Mukhi, Advocate with Mr. Jaswinder Singh, Advocate for appellant-assessee. Mr. Z.S. Klar, Senior Standing counsel for respondent- revenue. Ajay Kumar Mittal,J. 1. appellant-assessee has filed instant appeal under Section 260A of Income Tax Act, 1961 (in short, Act ) against order dated 29.5.2009, Annexure A.1, passed by Income Tax Appellate Tribunal, Chandigarh Bench B , Chandigarh (in short, Tribunal ) in ITA No.231/CHD/2008 (Departmental Appeal), for assessment year 2004-05, claiming following substantial questions of law:- (i) Whether on facts and in circumstances of case, Tribunal was justified in disallowing claim for deduction under Section 80IB in respect of export rebate/refund of ` 1,09,26,642/- which is nothing but integral and inseparable part of business profits derived from exports of manufactured goods and assessed to 1 of 4 ::: Downloaded on - 23-05-2017 10:11:28 ::: ITA No. 271 of 2010 (O&M) 2 Income Tax as part of business profits under Section 28 in hands of appellant? (ii) Whether on facts and in circumstances of case, Tribunal was justified in rejecting correct claim of appellant and correct decision of Commissioner of Appeals distinguishing clearly facts of present case from those of decision in Liberty India Vs. CIT (2007) 207 CTR 243(P&H) without examining correct factual and legal position? (iii) Whether on facts and in circumstances of case, Tribunal was justified in coming to conclusion that income derived from export of goods manufactured is not eligible for deduction under Section 80IB of Income Tax Act? (iv) Whether on facts and in circumstances of case, Tribunal was justified in recording erroneous findings in para 4 of its order, against appellant when factual position of present case has been clearly stated by appellant before Assessing Officer as well as Commissioner of Appeals who has rightly accepted that export rebate/refund was nothing but profits of business and allowed deduction admissible in respect thereof as evident from both orders of lower authorities which had not been correctly seen by Tribunal? (v) Whether on facts and in circumstances of case, Tribunal was justified in equating duty drawback decided in Liberty India s case with refund/rebate of Excise Duty on exports made of goods manufactured to treat same as not being business profits and as if it is export incentive unrelated to business? (vi) Whether on facts and in circumstances of case, claim of appellant under Section 80IB in respect of profits derived from Industrial Undertaking 2 of 4 ::: Downloaded on - 23-05-2017 10:11:29 ::: ITA No. 271 of 2010 (O&M) 3 by including export rebate/refund therein ought not to have been allowed in full, as claimed by appellant. 2. few facts relevant for decision of controversy involved as narrated in appeal may be noticed. appellant-assessee filed its return of income for assessment year 2004-05 showing total income of ` 6,12,61,027/- from which deductions of ` 1000/- under Section 80G, ` 1,22,76,375/- under Section 80IB and ` 72,61,014/- under Section 80HHC of Act were claimed. Assessing Officer allowed only ` 53,40,434/- as deduction under Section 80HHC of Act and remaining amount was disallowed by him. Out of deduction under Section 80IB of Act, only ` 29,82,838/- was allowed by him and balance of claim was disallowed. Commissioner of Income Tax (Appeals) [CIT(A)] allowed claim under Section 80IB of Act while upholding disallowance under Section 80HHC of Act. Aggrieved by order, revenue filed appeal before Tribunal. Vide order dated 29.05.2009, Annexure A.1, appeal of revenue was partly allowed. Hence instant appeal by appellant-assessee. 3. We have heard learned counsel for parties. 4. issue that arises in this appeal as was urged by learned counsel for appellant-assessee is whether deduction under Section 80IB of Act could be declined in respect of excise duty rebate/refund. 5. Tribunal while adjudicating appeal of assessee had noted that assessee had consented that issue was covered by decision against it in Liberty India s Vs. CIT, (2007) 207 CTR 243(P&H). This fact was, however, disputed by learned counsel for assessee. It was claimed that Excise Duty paid at time of purchase 3 of 4 ::: Downloaded on - 23-05-2017 10:11:29 ::: ITA No. 271 of 2010 (O&M) 4 of raw material was refunded to assessee as after manufacture of goods, goods were exported out of India. It was claimed that Excise Duty refund was in adjustment of Excise Duty paid. It was contra entry. Since issue had been decided on basis of concession given in Liberty India s case (supra), it was argued that in various decisions relief under Section 80IB of Act could not be declined on Excise Duty refund and thus, matter requires to be re-adjudicated. It was prayed by learned counsel for appellant which could not be effectively controverted by learned counsel for respondent- revenue that in such circumstances, matter be remanded to Assessing Officer who shall examine factual matrix and keeping in view legal position in this aspect decide afresh in accordance with law. 6. As result of above, it is held that matter with regard to relief under Section 80IB of Act requires to be re-adjudicated. Consequently, matter is remanded to Assessing Officer to decide it afresh, after hearing parties by passing speaking order in accordance with law. As result, appeal stands disposed of accordingly. (Ajay Kumar Mittal) Judge May 02, 2017 (Ramendra Jain) gs Judge Whether speaking/reasoned Yes Whether reportable Yes 4 of 4 ::: Downloaded on - 23-05-2017 10:11:29 ::: Nexo Industries Private Limited v. Commissioner of Income-tax, Ludhiana