LexCOMMISSIONER OF INCOME TAX, PUNE versus SHIRKE CONSTRUCTION EQUIPMENT LTD.
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-} COMMISSIONER OF INCOME TAX, PUNE A v. SHIRKE CONSTRUCTION EQUIPMENT LTD. MAY 17, 2007 [ASHOK BHAN AND DAL VEER BHANDARI, JJ.] B ~ Income Tax Act, 1961; Ss. 72, 80-AB & 80-HHC: Section 80 HHC-Profit-Adjustment of unabsorbed business losses of c earlier years therefrom in term of s. 72 of the Act-Applicability of s. 80-AB of the Act-Affirming the judgment of the Tribunal, High Court decided the question against the Revenue-On appeal, Held: A contrary view was held by this Court in the decided case of IPCA Laboratory Ltd v. Dy. Commissioner of Income tax, Mumbai overruling the judgment impugned in the present case-Under the circumstances impugned judgment set aside. D ~ The question arose for determination before this Court in the present appeal filed by the Revenue was as to whether the High Court was right in affirming the decision of the Tribunal by answering the questions framed by it against the Revenue as to whether Section 80-AB of the Income Tax Act, 1961 can be applied to Section 80-HHC of the Act and whether, in determination E of business profit under Section 80HHC of the Act, the unabsorbed business losses of the earlier years under Section 72 of the Act should be set off. Allowing the appeal of Revenue, the Court HELD: 1.1. Taking a contrary view, this Court in the decided case of F IPCA Laboratory Ltd v. Dy. Commissioner of Income Tax, Mumbai has held that (i) Section 80-HHC of the Income Tax Act is not independent of Section 80-AB of the Act and would be governed by Section 80-AB; and (ii) losses were to be set off against the profits earned from export of self-manufactured goods. It has further been held in that case Section 80 HHC would be governed G by Section 80-AB and the decision of the Bombay High Court and the Kerala High Court taking the contrary view does not lay down the correct law to that _, extent. (Para 6) (21-F-G) 19 H 20 SUPREME COURT REPORTS (2007) 7 S.C.R. ~ .A IPCA Laboratory Ltd v. Dy. Commissioner of Income Tax, Mumbai, [20041 12 sec 742, relied on. ...,._ C/Tv. Shirke Construction Equipments Ltd, (2000) 246 ITR 429 Boin and C/Tv. TC. Usha, (2003) 132 Taxmail 297 Ker, held not applicable. B 1.2. This Court has taken a contrary view to that of the High Court of Bombay, in CIT v. Shirke Construction Equipments Ltd (the impugned judgment) and the decision of the High Court ofKerala in C/Tv. TC. Usha, . ... and, overruling them, held that the said decisions cannot be said to be the -r correct law. For the foregoing reasons, impugned judgment is set aside. c (Paras 10 and 15) [23-A-B; G) ITO v. lnduflex Products (P) Ltd, [2006) l SCC 458 and P.R. Prabhakar v. CIT, Coimbatore, (2006) 6 SCC 86, at page 92, relied on. CIT v. TC. Usha, (2003) 132 Taxman 297 (Ker.) and CIT v. Shirke D Construction Equipments Ltd, (2000) 246 ITR 429 Bom, held not applicable. CIViL APPELLATE JURISDICTION : Civil Appeal No. 6758 of2001. .... From the Final Judgment and Order dated 24.07.2000 of the High Court of Bombay in IT A No. 458/PN/1998. E · Dr. A.E. Chilliah, Sr. Adv., D.K. Singh, Arijit Prasad and Pradeep Shukla (for B.V. Balaram Das) for the Appellant. S. Ganesh, Sanad Ramakrishan and Rajeev Mishra (for Mis. P.H. Parekh & Co.) for the Respondent. F The Judgment of the Court was delivered by BHAN, J. I. With the leave of the Court, the Commissioner of Income Tax, Pune (for short "the Revenue") has filed the present appeal against the Final judgment and order dated 24th July, 2000 passed by the High Court of G Bombay in ITA No. 458/AN/1998 by which the High Court has affinned the decision_ of the Tribunal and dismissed the appeal filed by the Revenue. The issue involved in this appeal relates to the provisions of the Income Tax Act, ;... ~ 196 I (for short "the Act"). 1- \ 2. The High Court framed the following two questions of law for its H detennination: COMMNR. OF INCOME TAX, PUNE v. SHIRKE CONSTRUCTION EQUIPMENT LTD. [BHAN, J.) 21 :- l. Whether Section 80-AB can be applied to Section 80-HHC of the A --> Act? 2. Whether, in detennination of business profit under Section 80HHC, the unabsorbed business losses of the earlier years under Section 72 of the Act should be set off? 3. The High Court has decided both the questions against the Revenue B and in favour of the assessee. On the first point, the High Court has held that Section 80-HHC is independent of Section 80-AB and Section 80-AB does not contr
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