IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No. 430 of 2008 DATE OF DECISION : 25.07.2008 The Commissioner of Income-tax, Karnal .... APPELLANT Versus M/s Kamini Jain ..... RESPONDENT CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTAL HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH Present: Mr. Sanjeev Kaushik, Advocate, for the appellant-revenue. * * * SATISH KUMAR MITTAL , J. The assessee, who is supporting manufacturer, is deriving income from manufacturing and export of textile products. The assessee filed its return on 30.10.2002 declaring income of Rs. 14,09,036/- which was subsequently assessed under Section 143 (3) of the Income Tax Act, 1961 (hereinafter referred to as `the Act') at an income of Rs. 46,96,890/-. In its return of income, the assessee claimed deduction under Section 80 HHC of the Act claiming itself at par with the direct exporter on the basis of a judgment of the Income Tax Appellate Tribunal, Delhi Bench-I, Delhi in Eastern Leather Products (P) Ltd. vs. DCIT, 68 ITD 358 (1998). However, the Assessing Officer did not accept the contention of the assessee and disallowed the deductions under section 80 HHC of the Act. On appeal by ITA No. 430 of 2008 -2- the assessee, the Commissioner of Income Tax (Appeals), while relying upon the aforesaid decision in the case of Eastern Leather Products (P) Ltd. vs. DCIT, 68 ITD 358 (1998), held that the assessee was entitled to the deduction under Section 80 HHC of the Act as a supporting manufacturer in the same manner as in the case of a direct exporter. Feeling aggrieved by the said order, the revenue filed an appeal before the Income Tax Appellate Tribunal, which was dismissed and the claim of the assessee for deduction under Section 80 HHC of the Act as a supporting manufacturer was upheld. However, on the other issues (which are not relevant for the purpose of decision of this appeal), the appeal of the revenue was partly allowed. Feeling aggrieved against the aforesaid order of the Tribunal, the revenue has filed the instant appeal under Section 260-A of the Act, against the order dated 10.8.207, passed by the Tribunal in ITA No. 1821/ DEL/2006 for the assessment year 2002-03, raising the following substantial question of law : “Whether on the facts and in the circumstances of the case, the learned ITAT was right in law in upholding the order of the CIT (Appeals), directing the Assessing Officer to allow deduction u/s 80 HHC to the assessee, who is a supporting manufacturer in the same manner, as in the case of direct exporter, treating the supporting manufacturer at par with the direct exporter and ignoring the provisions of section 80 HHC ITA No. 430 of 2008 -3- (1A) read with section 80 HHC (3A) read with clause (baa) of explanation to section 80 HHC of the Act?” Mr. Sanjeev Kaushik, learned counsel for the revenue has argued that the deductions allowable to the assessee under Section 80 HHC of the Act had already been computed and allowed by the Assessing Officer and the Explanation (baa) to Section 80 HHC of the Act is not applicable in the case of the assessee and therefore, the Tribunal has erred in law while upholding the claim of the assessee. We have heard learned counsel for the revenue and perused the record. However, we are unable to find any force in his submissions. In ITA No. 544 of 2007, decided on 13.5.2008, titled as Commissioner of Income tax, Karnal versus Carpet India, Sector 29, HUDA, Panipat, this Court while relying upon the judgment of the Hon'ble Apex Court in Commissioner of Income tax, Thiruvanantapuram v. Baby Marine Exports (2007) 290 ITR 323 (SC) has upheld the claim of the assessee under Section 80 HHC as a supporting manufacturer at par with the direct exporter as a similar question of law raised by the revenue for the earlier assessment year has been answered against the revenue and in favour of the assessee and the appeal filed by the revenue has been dismissed. Sh. Sanjeev Kaushik, learned counsel for the revenue could not dispute the said proposition of law as settled by this Court in ITA No. 544 of 2007, ITA No. 296 of 2008, decided on 7.7.2008, titled as “The Commissioner of Income tax, Karnal v. M/s. Carpet India, Sec. 29, HUDA, Panipat, and ITA No. 148 of 2008, ITA No. 430 of 2008 -4- decided on 17.7.2008, titled as “The Commissioner of Income-tax, Karnal v. M/s Spartan Trends Inc. Mahajan House, Lake Road, Panipat. In view of the above, no substantial question of law survives for our determination. We find no merit in the appeal and the same is dismissed. ( SATISH KUMAR MITTAL ) JUDGE July 25, 2008 ( AUGUSTINE GEORGE MASIH ) ndj JUDGE law as settled by this Court in ITA No. 544 of 2007, ITA No. 296 of 2008, decided on 7.7.2008, titled as “The Commissioner of Income tax, Karnal v. M/s. Carpet India, Sec. 29, HUDA, Panipat, and ITA No. 148 of 2008, ITA No. 429 of 2008 -4- decided on 17.7.2008, titled as “The Commissioner of Income-tax, Karnal v. M/s Spartan Trends Inc. Mahajan House, Lake Road, Panipat.