CREATIVE MOBUS FABRICS LTD, MUMBAI V. DCIT CIR 7(1), MUMBAI

CO 190/MUM/2009

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 4534 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-03-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-03-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 24-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJIT K SINHA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, C, MUMBAI BEFORE SHRI R V EASWAR, SENIOR VICE PRESIDENT AND SHRI P M JAGTAP, ACCOUNTANT MEMBER I T A NO: 2509/MUM/2009 (ASSESSMENT YEAR: 2005-06) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 6(2) AP PELLANT MUMBAI VS M/S CREATIVE MOBUS FABRICS LTD., MUMBAI RESPONDE NT (PAN: AAACC5458P) C O NO: 190/MUM/2009 (ARISING OUT OF I T A NO: 2509/MUM/2009) (ASSESSMENT YEAR: 2005-06) M/S CREATIVE MOBUS FABRICS LTD., MUMBAI CROSS OB JECTOR VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 6(2) RE SPONDENT MUMBAI ASSESSEE BY: SHRI VIJAY MEHTA REVENUE BY: SHRI AJIT K SINHA O R D E R R V EASWAR, SENIOR VICE PRESIDENT: THE APPEAL IS BY THE REVENUE AND THE CROSS OBJECTI ON IS BY THE ASSESSEE. THEY RELATE TO THE ASSESSMENT YEAR 2005- 06. THE ASSESSEE IS A COMPANY MAINLY ENGAGED IN THE MANUFAC TURE AND EXPORT OF FABRICS, MADE-UPS AND GARMENTS. IT ALSO DEALS I N THE ABOVE ITEMS. 2. IN THE REVENUES APPEAL, OBJECTION IS TAKEN TO T HE DECISION OF THE CIT(A) TO THE EFFECT THAT THE ASSESSEE IS ELIGI BLE FOR THE DEDUCTION UNDER SECTION 80-IB OF THE INCOME TAX ACT, 1961, IN RESPECT OF INCOME FROM EXPORT ENTITLEMENTS AMOUNTING TO RS.2,99,73,85 7/- AND INTEREST AMOUNTING TO RS.10,297/-, THE CONTENTION BEING THAT BOTH THESE RECEIPTS ARE NOT DERIVED FROM THE INDUSTRIAL UNDERTAKING, WH ICH IS THE PRIMARY CONDITION FOR GETTING THE DEDUCTION. THE EXPORT EN TITLEMENT CONSISTS OF DUTY DRAWBACK AND DEPB. 2 3. AT THE TIME OF HEARING, IT WAS FAIRLY POINTED OU T ON BEHALF OF THE ASSESSEE THAT THE APPEAL BY THE REVENUE SHOULD BE DECIDED IN FAVOUR OF THE REVENUE BY VIRTUE OF THE JUDGMENT OF THE SUPREME COURT IN LIBERTY INDIA VS. CIT (2009) 317 ITR 218 (SC). IN THIS JUDGMENT IT HAS BEEN HELD THAT DEPB AND DUTY DRAWBACK BENEFITS DO NOT FORM PART OF THE NET PROFITS OF THE INDUSTRIAL UNDERTAKING FO R THE PURPOSE OF SECTION 80-IB. RESPECTFULLY FOLLOWING THE JUDGMENT, WE ACC EPT THE GROUND TAKEN BY THE REVENUE, REVERSE THE DECISION OF THE C IT(A) ON THIS POINT AND RESTORE THAT OF THE ASSESSING OFFICER. ACCORDI NGLY THE APPEAL OF THE REVENUE IS ALLOWED. 4. IN THE CROSS OBJECTION FILED BY THE ASSESSEE, TH E ONLY ISSUE IS WHETHER THE CONTRIBUTION OF THE EMPLOYEES TOWARDS P F AND ESIC, WHICH WERE PAID BEYOND THE GRACE PERIOD CAN BE DISA LLOWED BY INVOKING SECTION 43B. AGAIN IT WAS FAIRLY STATED O N BEHALF OF THE ASSESSEE THAT THE CROSS OBJECTION SHOULD BE DECIDED AGAINST IT BY VIRTUE OF THE JUDGMENT OF THE HONBLE BOMBAY HIGH C OURT IN THE CASE OF CIT VS. PAMWI TISSUES LTD. (2009) 313 ITR 137 (BOM) . RESPECTFULLY FOLLOWING THE SAID JUDGMENT, WE UPHOLD THE ORDERS O F THE DEPARTMENTAL AUTHORITIES ON THIS ISSUE AND DISMISS THE CROSS OBJ ECTION FILED BY THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. NO COSTS. ORDER PRONOUNCED ON 9 TH MARCH 2010. SD/- SD/- (P M JAGTAP) (R V EASWAR) ACCOUNTANT MEMBER SENIOR VICE PRESI DENT MUMBAI, DATED 9 TH MARCH 2010 SALDANHA 3 COPY TO: 1. M/S CREATIVE MOBUS FABRICS LTD. 229, ADHYERU INDUSTRIAL ESTATE, SUN MILL COMPOUND LOWER PAREL, MUMBAI 400 013 2. DCIT, CIRCLE 6(2) 3. CIT-6 4. CIT(A)-VI 5. DR C BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI