2013 (12) TMI 841 - HC - Income Tax

Deduction u/s 80IA - export benefit adjustments - Held that - considering the ratio laid down by Hon ble the Supreme Court in the case of Liberty India (2009 (8) TMI 63 - SUPREME COURT) to the facts of the present case the ITAT has materially erred in holding that the export benefit adjustment amounting to Rs.1, 79, 05, 996/- should be included while computing deduction under Section 80IA of the Income Tax Act. - Decided in favor of revenue.

Summary

Issues:
- Interpretation of Section 80IA of the Income Tax Act regarding export benefit adjustment amounting to Rs.1,79,05,996.

Analysis:
1. The High Court addressed the appeal against the Income Tax Appellate Tribunal's judgment for the Assessment Year 2001-02. The key issue was whether the export benefit adjustment amount should be included in computing the deduction under Section 80IA of the Income Tax Act.

2. The Division Bench framed the substantial question of law regarding the correctness of the ITAT's decision to include the export benefit adjustment amount in the deduction calculation under Section 80IA.

3. The revenue, represented by Mr. Manish Bhatt, argued that the Supreme Court's decision in the case of Liberty India vs. Commissioner of Income-tax supported their position. The counsel vehemently contended that the ITAT erred in its interpretation.

4. On the other hand, Mr. S.N. Soparkar, representing the assessee, did not contest the applicability of the Supreme Court's decision in the Liberty India case. No contradictory judgment was presented to challenge the revenue's stance.

5. The High Court concluded that the ITAT had made a material error by including the export benefit adjustment amount in the deduction calculation under Section 80IA. The Court relied on the precedent set by the Supreme Court in the Liberty India case to overturn the ITAT's decision.

6. Consequently, the High Court ruled in favor of the revenue, quashing and setting aside the ITAT's judgment. The Tax Appeal was allowed, and no costs were awarded in this matter. The judgment emphasized the application of established legal principles to resolve the interpretation issue under Section 80IA of the Income Tax Act.