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2016 Supreme(Raj) 414
IN THE HIGH COURT OF RAJASTHAN (JAIPUR BENCH)
Ajay Rastogi, J.K. Ranka, JJ.
Commissioner of Income Tax, Jaipur-III – Appellant
Versus
M/s. Saraf Exports – Respondent
D.B. Income Tax Appeal No. 7 of 2014
Decided On : 04-02-2016
For the Appellant :- Mr. Sameer Jain, Counsel
For the Respondent:- Mr Suresh Ojha, Counsel
Headnote:
Criminal Procedure Code , 1973 - Section 195 - Indian Penal Code , 1860 - Section 196 - Article 226 - Article 6 – Constitution of India - Income Tax Act, 1961 - Sections 260 , 256 , 80 , 28 , 154 and 143 - Customs Act, 1962 - section 75 - Income Tax - Instant appeal is directed against order passed by Income Tax Appellate Tribunal and is relevant for assessment - Revenue has questioned order of Tribunal by using following substantial question of law on which appeal was admitted in this Court - Whether on facts and circumstances of case, ITAT was right in law in appreciating judgment of Apex Court reported regarding receipts under and Duty Drawback scheme entitled for deduction – Held , Common law jurisdictions judgments play a vital role in setting up precedents for future - Therefore, for development of law, requirement of giving reasons for decision is of essence and is virtually a part of "Due Process - In light of what we have observed here in above, appeal of Revenue stands allowed - Question of law is answered in favour of Revenue and against assessee - In Court view, order of Tribunal is beyond comprehension, is totally perverse and is not sustainable in law, and is accordingly quashed and set aside - Appeal allowed
J.K. Ranka, J.
The instant appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act of 1961) is directed against the order dated 17.12.2013 passed by Income Tax Appellate Tribunal, Jaipur (in short ITAT) and is relevant for the assessment year 2008-09.
2. The revenue has questioned the order of the Tribunal by using following substantial question of law on which the appeal was admitted in this Court on 21.3.2014 :-
"Whether on the facts and circumstances of the case, the ITAT was right in law in appreciating the judgment of the Apex Court reported in 2009(317) ITR 218 (SC) regarding the receipts under the (DEPB) and Duty Drawback scheme entitled for deduction u/s 80-IB of the Act of 1961."
3. The brief facts noticed are that respondent assessee is engaged in the business of manufacturing of wooden handicraft items and has shown income by way of export sales. On scrutiny of the assessment and on perusal of the books of accounts and other material it was revealed to the Assessing Officer that the assessee has credited following amounts in the P&L A/c :
| A. DEPB | Rs. 70,197/- |
| B. Drawback duty | Rs. 76,27,636/- |
4. The assessee in addition to normal profits of the business claimed deduction u/s 80-IB on these amounts duly supported with an audit report. However, the Assessing Officer was not satisfied and held that these are merely incentives to the assessee and a show cause notice was served as to why in the light of judgment of the Apex Court in the case of Liberty India v. CIT, 2009(317) ITR 218 (SC) the said amount be not excluded and the deduction under Section 80-IB of the Act of 1961 & recomputed excluding the above DEPB as well as Drawback Duty and accordingly sought to reduce by recomputing the deduction under Section 80-IB of the Act of 1961. The defence of the assessee was that the Apex Court has not taken into consideration the amendments made in Section 28(iiid) and 28(iiie) of the Act of 1961 and objected to reduction of the above incentives. The Assessing Officer taking into consideration the arguments and objections was of the view that the issue being settled by decision of the Apex Court in the case of Liberty India (supra) not open for discussion and reduced the deduction excluding the export incentives.
5. An appeal was filed before the CIT (A) by the respondent assessee. However concurring with the view of the Assessing Officer it was held that the judgment of Apex Court in CIT v. M/s. Sterling Foods Ltd. (237 ITR 579) as well as the judgment of Liberty India (supra) covers the controversy and accordingly rejected the appeal.
6. The assessee preferred further appeal to the ITAT who vide impugned order although referred the judgment rendered by the Apex Court in the case of Liberty India (supra) but held that the said judgment is treated as "per incuriam" and chose to follow the judgment rendered by this Court in the case of Chokshi Contracts (P) Ltd. - 251 ITR 587 (Raj.), Saraf Seasoning Udyog 2009(317) ITR 202 (Raj.) the order of Jodhpur Bench of the Tribunal in the case of M/s. Bothra International, Jodhpur in ITA No. 37/JU/2011 dated 21.9.2012 and while setting aside the order allowed appeals of the assessee.
7. The learned counsel for the appellant strongly and vehemently contended that when there is a judgment of the Apex Court dealing with the identical issue in regard to export incentives in the case of Liberty India (supra) and in M/s. Sterling Foods Ltd. (supra) the order, if any, of this Court in the case of Saraf Seasoning Udyog (supra) and Chokshi Contacts (supra) looses significance and the judgment of the Apex Court is binding on all the authorities u/Art. 141 of the Constitution. He further contended that the order of the Tribunal is wholly per verse, illegal and such an order ought not to have been passed by the Tribunal distinguishing the
