Opera Clothings (now known as Opera Clothing P. Ltd.) v. Assistant Commissioner of Income-tax-18(1) - 2019-LL-0722-14

Citation	2019-LL-0722-14
Appellant Name	Opera Clothings (now known as Opera Clothing P. Ltd.)
Respondent Name	Assistant Commissioner of Income-tax-18(1)
Court	HIGH COURT OF BOMBAY
Relevant Act	Income-tax
Date of Order	22/07/2019
Judgment	View Judgment
Keyword Tags	benefit of exemption • question of law • export business • duty drawback • eligible unit • subsidy • depb
Bot Summary:	This Appeal is filed by the Assessee to challenge the judgment of the Income Tax Appellate Tribunal. The following question is presented for our consideration : Whether the duty drawback of Appellant which is included in the purchase of the appellant which forms the part of expenses of the eligible unit relying upon the subsequent event judgments reported in Citation 383 ITR 217 SC CIT V/s. Meghalaya distinguish liberty India reported in 317 ITR 218, which is nothing but deemed to have been paid 2. The case of the assessee seeking exemption of the income arising out of its SSP 1/2 21 itxa 276 of 2017.doc export business, is squarely covered by the Judgment of the Supreme Court in the case of Liberty India reported in 317 ITR 200 since the receipts in question arise out of the duty draw back payment of the Government of India. In Liberty India, as is well known, the Supreme Court had held that the DEPB benefits would not qualify for exemption from tax since the same are not directly connected to the assessee's export business. Learned Counsel for the assessee however, placed reliance on the subsequent decision of the Supreme Court in the case of Commissioner of Income Tax V/s. Meghalaya Steels Ltd.1 We are conscious that in such decision, the Supreme Court had granted the benefit of exemption in respect of a subsidy received from the Government. In the process, the Supreme Court had held that the ratio laid down by the Supreme Court in the case of Liberty India would not apply in such a case. We cannot apply the decision of the Supreme Court in the case of Meghalaya Steels Ltd. since the case of the present assessee is squarely covered by the decision in the case of Liberty India.

IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.276 OF 2017 M/s. Opera Clothings (now known as Opera Clothing P. Ltd. Appellant versus Assistant Commissioner of Income Tax-18(1) Respondent Mr. Bharat L. Gandhi with Ms. Poonam Kotkar I/by Mr. Swapnil Newaskar, for Appellant. Mr. Sham V. Walve, for Respondent. CORAM: AKIL KURESHI & S.J. KATHAWALLA, JJ. DATE: 22nd JULY, 2019 P.C.: 1. This Appeal is filed by Assessee to challenge judgment of Income Tax Appellate Tribunal ( Tribunal for short). following question is presented for our consideration : Whether duty drawback of Appellant which is included in purchase of appellant which forms part of expenses of eligible unit relying upon subsequent event judgments reported in Citation 383 ITR 217 SC CIT V/s. Meghalaya distinguish liberty India reported in 317 ITR 218, which is nothing but deemed to have been paid ? 2. case of assessee seeking exemption of income arising out of its SSP 1/2 21 itxa 276 of 2017.doc export business, is squarely covered by Judgment of Supreme Court in case of Liberty India reported in 317 ITR 200 since receipts in question arise out of duty draw back payment of Government of India. In Liberty India, as is well known, Supreme Court had held that DEPB benefits (similar to duty draw back payments) would not qualify for exemption from tax since same are not directly connected to assessee's export business. 3. Learned Counsel for assessee however, placed reliance on subsequent decision of Supreme Court in case of Commissioner of Income Tax V/s. Meghalaya Steels Ltd.1 We are conscious that in such decision, Supreme Court had granted benefit of exemption in respect of subsidy received from Government. In process, Supreme Court had held that ratio laid down by Supreme Court in case of Liberty India (supra) would not apply in such case. However, we cannot apply decision of Supreme Court in case of Meghalaya Steels Ltd. (Supra) since case of present assessee is squarely covered by decision in case of Liberty India (Supra). No question of law arises. Income Tax Appeal is dismissed. ( S.J.KATHAWALLA, J. ) ( AKIL KURESHI, J. ) 1 [2016] 383 ITR 217 (SC) SSP 2/2 Opera Clothings (now known as Opera Clothing P. Ltd.) v. Assistant Commissioner of Income-tax-18(1)

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