C/TAXAP/19/2020 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 19 of 2020 PRINCIPAL COMMISSIONER OF INCOME TAX, SURAT -1 Versus M/S SHREE VIJAY LAXMI EXPORTS Appearance: MRS KALPANAK RAVAL(1046) for Appellant(s) No. 1 for Opponent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 27/01/2020 ORAL ORDER (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. This tax appeal under Section 260A of Income Tax Act, 1961 [for short 'The Act, 1961'] is at instance of revenue and is directed against order passed by Income Tax Appellate Tribunal, Surat Bench, Surat dated 24th July, 2019 in ITA No.815/AHD/2016 for A.Y 2012 13. 2. revenue has proposed following questions of law for consideration of this Court: [i] Whether on facts and circumstances of case and in law, Hon'ble ITAT's order is correct when in fact trading activity in nature of re export of imported goods is not in nature of services which entailed for benefit of deduction U/s.10AA of IT Act as trading is not defined as services under income tax act? [ii] Whether on facts and circumstances of case and in law, Hon'ble ITAT's order is correct when in fact exemption U/s Page 1 of 3 Downloaded on : Tue Jan 28 10:44:21 IST 2020 C/TAXAP/19/2020 ORDER 10AA of IT Act should be based on total income to be computed as per provisions of Sec.29 to 43D of Act, after allowing all eligible deductions whether or claimed suo moto by assessee or not? [iii] Whether, on facts and in circumstances of case and in law, Hon'ble ITAT is right in upholding decision of Ld. CIT(A) in deleting disallowance made by AO without appreciating that assessee firm had taken undue benefits of Section 10AA of Act by not claiming interest on Capital and Remuneration which resulted into increase in exempt profit of assessee firm? [iv] Whether on facts and circumstances of case and in law, decision of Hon'ble ITAT is perverse in upholding decision of Ld. CIT(A) in deleting disallowance made by AO without ascertaining facts as narrated by AO in as much as there was partnership deed by which firm was constituted on 27.11.2010 and same was modified as afterthought by amendment in partnership deed on 18.03.2011 by not providing payment of interest & remuneration to partners by specially inserting clause for non payment? [v] Whether on facts and in circumstances of case and in law, Hon'ble ITAT's order is perverse in ignoring important facts which clearly indicate dubious method adopted by assessee which cannot be allowed in view of judgment of Hon'ble Supreme Court in case of Mac Dowell & Company Vs. CIT (154 ITR 148)? 3. Tribunal while concurring with findings recorded by CIT(A) has observed in Paragraph 20 of impugned order as under: 20. We have heard rival submissions and we find that issue is squarely covered in favour of assessee and against Revenue by decision of Hon'ble Jurisdictional High Court of Gujarat in case of PCIT Vs. Alidhara Taxspin Engineers (supra), dated 02.05.2017, accordingly this ground of appeal of Revenue is dismissed. 4. Thus, Tribunal relied upon dictum as laid by this Court in case of Principal Commissioner of Income tax Vs. Alidhara Taxspin Engineers & Another, Tax Appeal No.265 of 2017, decided on 02nd May, 2017. Page 2 of 3 Downloaded on : Tue Jan 28 10:44:21 IST 2020 C/TAXAP/19/2020 ORDER 5. questions of law as proposed by Revenue in present appeal stand covered by dictum as laid in case of Alidhara Taxspin Engineers [Supra]. 6. This Court had occasion to consider very same issue recently in Tax Appeal No.818 of 2019 and allied appeals, decided on 20th January, 2020. 7. In view of aforesaid, none of questions of law as proposed by Revenue could be termed as substantial questions of law. 8. In result, this appeal fails and is hereby dismissed. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) aruna Page 3 of 3 Downloaded on : Tue Jan 28 10:44:21 IST 2020 Principal Commissioner of Income-tax, Surat-1 v. Shree Vijay Laxmi Export