2015 (1) TMI 881 - HC - Income Tax

Computation of deduction under Section 80HHC - sale of scrap - whether to be included in the total turnover while computing deduction? - Held that - Here it is not disputed that the previous judgment of this Court in CIT v. Punjab Stainless Steel Ind. (2007 (1) TMI 543 - DELHI HIGH COURT) to the effect that such sales are to be excluded from the computation for the purposes of Section 80 HHC has been upheld by the Supreme Court (2014 (5) TMI 238 - SUPREME COURT). - Decided in favour of the assessee.

Summary

Issues Involved:
1. Interpretation of the order of the Income Tax Appellate Tribunal (ITAT) dated 13.06.2008.
2. Consideration of questions of law urged by the revenue in the present appeal.
3. Determination of whether specific questions of law raised by the revenue are substantial.
4. Analysis of the judgment of the Allahabad High Court in relation to the case.
5. Examination of relevant case laws cited by the revenue.
6. Decision on the issues related to interunit sales/transfer and the applicability of Section 80HHC.
7. Assessment of whether the sale of scrap should be included in the total turnover for computing deduction under Section 80HHC.

Detailed Analysis:

1. The High Court considered the revenue's appeal against the order of the ITAT dated 13.06.2008. The appeal was previously disposed of with directions to reframe questions for the ITAT, leading to the current common appeal.

2. The revenue raised several questions of law in support of the appeal, including issues related to the computation of deductions under Section 80HHC and 80HH of the Income Tax Act, 1961, and the treatment of separate industrial units.

3. The Court reviewed the judgment of the Allahabad High Court in a similar case and found that certain questions raised by the revenue did not arise for consideration based on the previous ruling.

4. Considering the facts and relevant case laws, the Court determined that some questions raised by the revenue were not substantial and did not require detailed answers.

5. Regarding the issue of the sale of scrap for computing deduction under Section 80HHC, the Court referred to a previous judgment upheld by the Supreme Court, concluding in favor of the assessee against the revenue.

6. The Court dismissed the appeal in line with its findings, including the issues related to interunit sales/transfer and the applicability of Section 80HHC, deeming them not substantial for further consideration.

7. Overall, the judgment addressed the specific questions of law raised by the revenue, considered relevant case laws and the Allahabad High Court's ruling, and provided a detailed analysis to dismiss the appeal in part and uphold the decision on the sale of scrap for deduction computation.