M/s Kurian Abraham P.Ltd, Kottayam V. ACIT, Kottayam

CO 5/COCH/2008

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7144 (ITAT-COCHIN)
• Duration Of Justice: 4 year(s) 3 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 19-04-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 19-03-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 18-01-2008
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: SHRIK I JOHN
• Keywords: Opportunity of being heard
• Section: 80HHC; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NOS. 593 & 645/COCH/2006 ASSESSMENT YEARS : 2000-01 & 2003-04 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOTTAYAM. M/S. KURIAN ABRAHAM(P) LTD., OOPPOOTTIL BUILDING, K.K. ROAD, KOTTAYAM. [PAN: AAACK 8720C] (REVENUE -APPELLANT) (ASSESSEE - RESP ONDENT) C.O. NO. 04 & 05/COCH/2008 (ARSG. OUT OF I.T.A NO. 593 & 645/COCH/2006 ASSESSMENT YEARS : 2000-01 & 2003-04 M/S. KURIAN ABRAHAM(P) LTD., OOPPOOTTIL BUILDING, K.K. ROAD, KOTTAYAM. [PAN: AAACK 8720C] THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOTTAYAM (ASSESSEE-APPELLANT) (REVENUE - RESPONDENT) ASSESSEE BY SHRIK.I. JOHN, CA REVENUE BY SMT. VIJAYAPRABHA, JR. DR DATE OF HEARING 19/03/2012 DATE OF PRONOUNCEMENT 19/04/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEALS OF THE REVENUE AND THE CROSS OBJECTION S FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LD. CIT(A )-IV, KOCHI AND THEY RELATE TO THE ASSESSMENT YEARS 2000-01 AND 2003-04. ITA NO. 593 & 645/COCH/ 2006 & C.O. NOS. 04 & 05/COCH/08 2 2. SINCE IDENTICAL ISSUES ARE AGITATED IN THESE APP EALS, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE BARRED BY LIMITATION BY 392 DAYS AND 354 DAYS AND ASSESSEE HAS MOVED A PETITION SEEK ING THE TRIBUNAL TO CONDONE THE DELAY FOR THE REASONS STATED THEREIN. HAVING REGARD TO THE SUBMISSIONS MADE THEREIN, WE CONDONE THE DELAY AND ADMIT THE CROSS OBJECTIONS FI LED BY THE ASSESSEE. 4. IN THE APPEAL FILED BY THE REVENUE AND ALSO IN T HE CROSS OBJECTION, BOTH THE PARTIES ARE CHALLENGING THE DECISION RENDERED BY THE LD. CI T(A) ON THE ISSUE OF COMPUTATION OF DEDUCTION U/S. 80IB AND 80HHC OF THE ACT. BESIDES THE ABOVE, THE ASSESSEE IS ASSAILING THE DECISION OF THE LD. CIT(A) IN CONFIRMING THE DE DUCTION OF PROPORTIONATE HEAD OFFICE EXPENSES FROM PROFITS FOR THE PURPOSE OF COMPUTATIO N OF DEDUCTION U/S. 80IB OF THE ACT. 5. WE HAVE HEARD THE RIVAL CONTENTIONS. THE ISSUE RELATING TO COMPUTATION OF DEDUCTION U/S. 80IB AND 80HHC OF THE ACT HAS SINCE BEEN SETTLED BY THE HONBLE KERALA HIGH COURT IN THE CASE OF OLAM EXPORTS (INDIA) LTD. VS. CIT, 332 ITR 40. IT IS PERTINENT TO MENTION HERE THAT BOTH THE PARTIES HAVE FAILED T O BRING TO THE NOTICE OF THE TRIBUNAL ABOUT THE DECISION OF THE JURISDICTIONAL HIGH COUR T. THE ASSESSEE, IN ITS WRITTEN SUBMISSION, HAS REFERRED TO HOSTS OF DECISIONS IN T HIS REGARD. HOWEVER, SINCE THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IS BINDING ON TRIBUNAL, DEPARTMENT AS WELL AS THE ASSESSEES, WE DO NOT FIND IT NECESSARY TO ADDRESS T HE OTHER AGRUMENTS ADVANCED BY THE ASSESSEE. ACCORDINGLY, WE ARE OF THE VIEW THAT THI S ISSUE REQUIRES RE-EXAMINATION AT THE END OF AO IN LIGHT OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT( A) ON THIS ISSUE FOR BOTH THE YEARS AND RESTORE THE SAME TO THE FILE OF THE AO WITH A DIREC TION TO COMPUTE THE ELIGIBLE AMOUNT OF DEDUCTION U/S. 80IB AND 80HHC OF THE ACT IN ACCORDA NCE WITH THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT REFERRED SUPRA, AFTER AFF ORDING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO. 593 & 645/COCH/ 2006 & C.O. NOS. 04 & 05/COCH/08 3 6 WITH REGARD TO THE ISSUE OF DEDUCTION OF PROPORTI ONATE HEAD OFFICE EXPENSES FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S. 80IB, WE N OTICE THAT THE TRIBUNAL, IN THE ASSESSEE'S OWN CASE IN I.T.A. NO. 1115/COCH/2005 RE LATING TO THE ASSESSMENT YEAR 2002- 03, HAS HELD THAT THERE IS NO NECESSITY FOR THE ASS ESSING OFFICER TO DEVIATE FROM THE CONSISTENT STAND TAKEN IN EARLIER YEARS. FOR THE S AKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSERVATIONS MADE BY THE TRIBUNAL:- WE HEARD LD. CA K.I. JOHN FOR THE ASSESSEE AND LEA RNED DEPARTMENTAL REPRESENTATIVE SMT. T.R. INDIRA FOR TH E REVENUE. LD. CA SUBMITTED THAT THE ASSESSEE HAS BEEN CLAIMING DEDUC TION U/S. 80IB AND 80HHC IN ALL THE PREVIOUS YEARS. LD. CA ALSO REFERRED TO COPIES OF THE ASSESSMENT ORDERS FOR ASSESSMENT YEAR 1994-95, 1995-96 AND 199 6-97. HE ALSO SUBMITTED THAT IN THE ASSESSMENT YEAR 2001-02, THE MATTER WA S CARRIED IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS) AND THE COM MISSIONER OF INCOME- TAX(APPEALS) HAS ALLOWED THE APPEAL FILED BY THE AS SESSEE AND NO APPEAL HAS BEEN FILED BY THE DEPARTMENT TO THE KNOWLEDGE OF TH E ASSESSEE AGAINST THE SAID ORDER. HE, HOWEVER, SUBMITTED THAT IT IS NOT OPEN TO THE DEPARTMENT TO DEVIATE FROM THE ASSESSMENT IN ALL EARLIER YEARS WH EN ITS GRIEVANCE WAS NOT CHALLENGED. ON THE OTHER HAND, LEARNED DEPARTMENTA L REPRESENTATIVE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME- TAX (APPEALS). WE HAVE ALSO CAREFULLY CONSIDERED THE FACTS PERTAINING TO THIS ISSUE AS AVAILABLE ON RECORD. WE HAVE ALSO CONSIDERED THE ASSESSMENT ORD ER AND OTHER RELEVANT RECORDS WHICH ARE PLACED IN THE PAPER BOOK FILED BY THE ASSESSEE. WE FIND SUBSTANCE IN THE ARGUMENT OF THE LD. CA. ON THE PE RUSAL OF THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS), WE FIND THAT C OMMISSIONER OF INCOME-TAX(APPEALS) HAS ALSO MADE THE DISALLOWANCE TO THE EXTENT OF RS. 60,000/- ONLY ON AN ESTIMATE BASIS. IT IS CLEAR FR OM PARA 2.3 OF THE ORDER OF THE COMMISSIONER OF INCOME- TAX(APPEALS). MOREOVER, WE FIND THAT IN THE EARLIER YEARS NO DISALLOWANCE IN RESPECT OF THE HEAD OFFICE EXPENSES WAS MADE. WE DO NOT FIND ANY JUSTIFICATION TO DEVIATE FROM THE CON SISTENT STAND TAKEN BY THE ASSESSING OFFICER IN THE PREVIOUS YEARS. WE, THER EFORE, DELETE THE ADDITION OF RS. 60,000/- SUSTAINED BY THE COMMISSIONER OF INCOM E-TAX(APPEALS) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE DEDUCTION OF RS. 32,09,188/- AS CLAIMED BY THE ASSESSEE. SINCE A PARTICULAR VIEW HAS ALREADY BEEN TAKEN BY THE TRIBUNAL IN ASSESSEE'S OWN CASE IN THE EARLIER YEARS, WE DO NOT WISH TO DEVIATE FROM T HE SAME. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DIRECT TH E ASSESSING OFFICER TO COMPUTE DEDUCTION U/S. 80IB OF ACT WITHOUT ALLOCATING PROPO RTIONATE HEAD OFFICE EXPENSES. ITA NO. 593 & 645/COCH/ 2006 & C.O. NOS. 04 & 05/COCH/08 4 7. IN THE RESULT, THE APPEALS OF THE REVENUE AND TH E CROSS OBJECTIONS OF THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY O N 19-04-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 19TH APRIL, 2012 GJ COPY TO: 1. M/S. KURIAN ABRAHAM(P) LTD., OOPPOOTTIL BUILDING , K.K. ROAD, KOTTAYAM. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1, KOTTAYAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV, KOC HI. 4. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE . BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN