M/S. TATA INTERNATIONAL LTD, MUMBAI V. THE ACIT 7(3), MUMBAI

ITA 1009/MUM/2009

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100550 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 30-04-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 13-02-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA R SWAMY
• Assessee Lawyers: DINESH VYAS
• Keywords: Opportunity of being heard
• Section: 80HHC; 234B; 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , , BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 1009/MUM/2009 ( / ASSESSMENT YEAR : 2004 - 05 TATA INTERNATIONAL LTD., BLOCK A, SHIVSAGAR ESTATES, DR. ANNIE BESANT ROAD, WORLI, MUMBAI - 400 018 / VS. THE ACIT - 7(3), AAYAKAR BHAVAN, MUMBAI - 400 020 ./ ./ PAN/GIR NO. : AAACT 3198F ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI DINESH VYAS / RESPONDENT BY : SHRI MANJUNATHA R. SWAMY / DATE OF HEARING : 13 . 0 8 .2015 / DATE OF PRONOUNCEMENT : 13 .0 8 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 7 , MUMBAI DT. 1 9 .1 1 .20 08 PERTAINING TO ASSESSMENT YEAR 200 4 - 0 5 . 2. THE ASSESSEE HAS RAISED 14 SUBSTANTIVE GROUNDS OF APPEAL. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED A FACT SHEET STATI NG THAT ALL THE IMPUGNED ISSUES HAVE ALREADY BEEN CONSIDERED BY THE TRIBUNAL ITA. NO . 1009/M/2009 2 IN ASSESSEES OWN CASE IN EARLIER YEARS. IN A DETAILED CHART, THE LD. COUNSEL EXPLAINED THE GROUNDS OF APPEAL VIS - VIS DECISION TAKEN IN EARLIER YEARS. 3. THE LD. DEPARTMENTAL R EPRESENTATIVE FAIRLY CONCEDED AND STATED THAT THE APPEAL MAY BE DECIDED FOLLOWING THE EARLIER YEARS OF THE TRIBUNAL. 4. WE HAVE CAREFULLY PERUSED THE DETAILED CHART FURNISHED BY THE LD. COUNSEL. WE WILL TAKE UP THE GROUNDS ONE BY ONE. 5. GROUND NO. 1 IS NOT PRESSED AND IS ACCORDINGLY DISMISSED. 6. GROUND NO. 2.1 AND 2.2 RELATES TO THE DISALLOWANCE OF EXPENDITURE BY WAY OF CLAIMS SETTLED. 6.1. THIS ISSUE HAS BEEN DISCUSSED BY THE AO AT PAGES 4 & 5 OF THE ASSESSMENT ORDER. THE LD. CIT(A) HAS CONSIDE RED THIS ISSUE AT PAGE 3 OF HIS ORDER. AN IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL IN A.Y. 2003 - 04 IN ITA NO. 3016/M/07 AND AT PARA - 8 AND 8.1 THE TRIBUNAL HAS FOLLOWED THE EARLIER ORDER OF THE TRIBUNAL FOR A.YRS 2000 - 01, 2001 - 02 AND 2002 - 03. RESPE CTFULLY FOLLOWING THE ORDERS OF THE CO - ORDINATE BENCH IN ASSESSEES OWN CASE, THE DISALLOWANCE MADE BY THE AO IS DELETED. THESE GROUNDS ARE ACCORDINGLY ALLOWED. 7. GROUND NO. 3.1 & 3.2 RELATE TO THE DISALLOWANCE MADE U/S. 14A OF THE ACT. 7.1. THE GR IEVANCE UNDER THIS GROUND HAS BEEN BIFURCATED UNDER SUB - GROUND NO S . 5.1 TO 5.10. IDENTICAL ISSUES HAVE BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN A.YRS 2000 - 01, 2001 - 02 & 2002 - 03 IN ITA NOS. 3957 TO 3959/M/2006. THE TRIBUNAL HAS CONSIDERED A SIMILAR ISSUE FROM P[AGES 2 TO 14 OF ITS ORDER QUA PARA S 3 TO 22. RESPECTFULLY FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH (SUPRA), WE ITA. NO . 1009/M/2009 3 HOLD ACCORDINGLY AND DIRECT THE AO TO FOLL OW THE FINDINGS/DIRECTIONS OF THE TRIBUNAL GIVEN FOR A.YRS 2000 - 01, 2001 - 02 AND 2003 - 03. GROUND NO. 3.1 AND 3.2 WITH ALL SUB - GROUNDS ARE ACCORDINGLY ALLOWED. 8. GROUND NO. 4, 5.1 & 5.2 ARE NOT PRESSED AND ARE ACCORDINGLY DISMISSED AS NOT PRESSED. 9. SIMILARLY, GROUND NOS. 7.1, 7.2, 9.1, 9.2, 10.1 AND 10.2 ARE NOT PRESSED AND ARE ACCORDINGLY DISMISSED AS NOT PRESSED . 10. GROUND NOS. 6, 8 AND 11 RELATE TO DISALLOWANCE OF LEGAL AND PROFESSION CHARGES OF RS. 13,19,760/ - , DISALLOWANCE OF REPAIRS AND MAIN TENANCE CHARGES OF RS. 11,66,757 AND DISALLOWANCE OF REPAIRS AND MAINTENANCE - PLANT & MACHINERY - RS. 1,87,151/ - . 10.1. THE AO HAS DISCUSSED THESE DISALLOWANCES AT PAGES 33 TO 40 OF HIS ORDER AND THE LD. CIT(A) HAS CONSIDERED THE GRIEVANCE OF THE ASSESS EE AT PAGE - 8 OF HIS ORDER. A PERUSAL OF THE ORDER OF THE FIRST APPELLATE AUTHORITY SHOW THAT THE LD. CIT(A) HAS CALLED FOR A REMAND REPORT FROM THE AO. HOWEVER, WE FIND THAT THE FIRST APPELLATE AUTHORITY HAS DECIDED THESE ISSUES WITHOUT WAITING FOR THE REMAND REPO RT. IN OUR CONSIDERED OPINION AND IN THE INTEREST OF JUSTICE AND FAIR PLAY, THESE ISSUES NEED TO BE RECONSIDERED AT THE ASSESSMENT STAGE. WE, THEREFORE SET ASIDE THESE GROUNDS TO THE FILE OF THE AO. THE AO IS DIRECTED TO DECIDE THESE ISSUES A FRESH AFTER GIVING A REASONABLE AND FAIR OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUND NO. 6, 8 AND 11 ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 11. GROUND NO. 12.1(I) RELATES TO THE CLAIM OF DEDUCTION U/S. 80HHC OF THE ACT. THI S CLAIM IS CONSIDERED BY THE AO AT PAGES - 40 TO 68 OF HIS ITA. NO . 1009/M/2009 4 ORDER AND THE FIRST APPELLATE AUTHORITY HAS CONSIDERED THIS ISSUE AT PAGES 9 TO 13 OF HIS ORDER. 11.1. AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y. 2003 - 04 IN ITA NO. 3016/M/2007 AT PARA - 15 OF ITS ORDER AND AT PARA - 15.3, THE TRIBUNAL HAS FOLLOWED THE DECISION OF THE CO - ORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NOS. 5591/M/2005, 4823 TO 4825/M/05 AND 2781, 2697 AND 4171/M/05 AND CONFIRMED THE DISALLOWANCE. RESPECTFULLY FOLLOWING THE FINDINGS OF THE TRIBUNAL (SUPRA), WE CONFIRM THE FINDINGS OF THE LD. CIT(A). THIS GROUND IS ACCORDINGLY DISMISSED. 12. GROUND NO. 12.2 RELATES TO THE CLAIM OF DEDUCTION U/S. 80HHC RELATING TO DEPB CREDITS. THIS ISSUE HAS BEEN CONSIDERED BY THE AO AT PAGES 40 TO 68 OF HIS ORDER AND THE LD. CIT(A) HAS CONSIDERED THE GRIEVANCE OF THE ASSESSEE AT PAGES 9 TO 13 OF HIS ORDER. AN IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y. 2003 - 04 IN ITA NO. 3016/M/ 2017 AT PAGES 7 AND 8 OF ITS ORDER QUA PRA 18 TO 18.3 AND AT PARA 18.3, THE TRIBUNAL FOLLOWING THE ORDER OF THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF AVANI EXPORTS VS CIT 23 TAXMAN.COM 62 (GUJ) HAS RESTORED THIS ISSUE TO THE FILE OF THE AO FOR DENO VO ASSESSMENT ON THIS CLAIM OF THE ASSESSEE U/S. 80HHC OF THE ACT. RESPECTFULLY FOLLOWING THIS FINDING OF THE TRIBUNAL, WE SET ASIDE THIS ISSUE TO THE FILE OF THE AO TO BE DECIDED AFRESH IN THE LIGHT OF THE FINDINGS GIVEN IN A.Y. 2003 - 04. ACCORDINGLY, TH IS GROUND IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 13. SIMILARLY GROUND NO. 12.3 RELATES TO THE CLAIM OF DEDUCTION U/S. 80HHC OF THE ACT. THIS CLAIM IS RESTORED TO THE FILE OF THE AO BY THE TRIBUNAL IN A.Y. 2003 - 04 IN ITA NO. 3016/M/07. RESPECTFU LLY FOLLOWING THE SAME, WE SET ASIDE THIS ISSUE TO THE FILE OF THE AO TO BE DECIDED AS PER ITA. NO . 1009/M/2009 5 THE DIRECTIONS OF THE TRIBUNAL IN A.Y. 2003 - 04 IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS VS CIT 342 ITR 49 (SC). THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSE. 14. GROUND NO. 12.4(II) RELATES TO THE CLAIM OF DEDUCTION U/S. 80HHC RELATING TO THE GRIEVANCE THAT THE AO OUGHT TO HAVE EXCLUDED FROM TOTAL COSTS - DIRECT COSTS ATTRIBUTABLE TO EXPORTS AND DOMESTIC SALES OF M ANUFACTURED GOODS. 14.1. THE AO HAS DISCUSSED THIS CLAIM OF DEDUCTION AT PAGES 40 TO 68 OF HIS ORDER AND THE LD. CIT(A) HAS CONSIDERED THIS ISSUE AT PAGES 9 TO 13 OF HIS ORDER. AN IDENTICAL ISSUE WAS DECIDED BY THE TRIBUNAL IN A.Y. 2003 - 04 IN ITA NO. 3016/M/2007 AND AT PARA 20.2 THE TRIBUNAL HAS FOLLOWED THE DECISION OF THE CO - ORDINATE BENCH IN ITA NO. 5508/M/05 AND ALLOWED THE CLAIM IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE FINDINGS OF THE TRIBUNAL (SUPRA), WE DECIDE THIS GRIEVANCE IN FAV OUR OF THE ASSESSEE. GROUND NO. 12.4(II) IS ACCORDINGLY ALLOWED. 15. GROUND NO. 12.8 RELATES TO THE CLAIM OF DEDUCTION U/S. 80HHC WHICH IS WITHOUT PREJUDICE TO ASSESSEES CLAIM THAT UNREALIZED EXPORT SALE PROCEEDS NOT EXCLUDIBLE FROM TRADING EXPORT TURN OVER. THE CLAIM OF THE ASSESSEE IS THAT THE AO OUGHT TO HAVE EXCLUDED FROM DIRECTS COSTS OF TRADING GOODS, DIRECT COSTS ATTRIBUTABLE TO SUCH UNREALIZED EXPORT SALE PROCEEDS. THIS CLAIM IS CONSIDERED BY THE AO AT PAGES 40 TO 68 OF HIS ORDER AND THE LD. CI T(A) HAS CONSIDERED THIS GRIEVANCE AT PAGES 9 TO 13 OF HIS ORDER. AN IDENTICAL CLAIM WAS CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y. 2003 - 04 IN ITA NO. 3016/M/07 AT PARA - 22 AND 23 OF ITS ORDER AND AT PARA 23.2, THE TRIBUNAL HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH ITA. NO . 1009/M/2009 6 IN ITA NOS. 4823 TO 4825/M/05. RESPECTFULLY FOLLOWING THE FINDINGS OF THE TRIBUNAL (SUPRA), WE FOLD ACCORDINGLY. GROUND NO. 12.8 IS ALLOWED. 16. GROUND NO. 12.9 RELATES TO THE CLAIM OF DEDUCTION U/S. 80HHC. IT IS THE CLAIM OF THE ASSESSEE THAT IN COMPUTING THE TOTAL TURNOVER FOLLOWING ITEM SHOULD HAVE BEEN EXCLUDED: A) SALES TAX B) EXCISE DUTY 16.1. THIS DEDUCTION HAS BEEN DISCUSSED BY THE AO FROM PAGES 40 TO 68 OF HIS ORDER. THE LD. CIT(A) HAS CONSIDERED THE GRIEVANCE AT PAGES 9 TO 13 OF HIS ORDER. A SIMILAR ISSUE WAS CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y. 2003 - 04 IN ITA NO. 3016/M/07 AND AT PARA 24.2, THE TRIBUNAL HAS FOLLOWED THE DECISION OF THE C O - ORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NOS. 2738, 2846 AND 4296/M/2000. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL (SUPRA), WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE SETTING ASIDE THE FINDINGS OF THE LD. CIT(A). GROUND NO. 12.9 IS A CCORDINGLY ALLOWED. 17. GROUND NO. 12.10 IS NOT PRESSED AND IS ACCORDINGLY DISMISSED. 18. GROUND NO. 12.11 RELATES TO THE CLAIM OF DEDUCTION U/S. 80HHC. IT IS THE CLAIM OF THE ASSESSEE THAT IN COMPUTING PROFITS OF THE BUSINESS UNDER EXPLANATION (BAA) 90% OF NET RECEIPTS AND NO GROSS RECEIPTS BY WAY OF COMMISSION EARNED AND INTEREST EARNED OUGHT TO BE REDUCED. THIS CLAIM IS CONSIDERED BY THE AO AT PAGES 40 TO 68 OF HIS ORDER. THE LD. CIT(A) HAS CONSIDERED THE GRIEVANCE AT PAGES 9 TO 13 OF HIS ORDER. A SIMILAR CLAIM WAS CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN A.YRS 2000 - 01, 2001 - 02 AND 2002 - 03 IN ITA NOS. 3957 TO 3959/M/06 AT PARAS 32 TO 35 AND AT PARA 143 & 144 OF ITS ORDER DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWI NG THE DECISION OF THE CO - ORDINATE BENCH ITA. NO . 1009/M/2009 7 (SUPRA) IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ACG ASSOCIATED CAPSULES PVT. LTD. VS CIT 343 ITR 89, WE DECIDE THIS CLAIM OF DEDUCTION IN FAVOUR OF THE ASSESSEE. GROUND NO. 12.11 IS ALLOWED. 19. GROUND NOS. 13 & 14 RELATE TO THE CHARGEABILITY OF INTEREST U/S. 234B OF THE ACT. THE AO IS DIRECTED TO DECIDE THIS ISSUE AFRESH IN THE LIGHT OF OUR DECISION AS PER THE PROVISIONS OF THE LAW. GROUND NO. 13 & 14 IS TREATED AS ALLOWED FOR S TATISTICAL PURPOSE. 20. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. OR DER PRONOUNCED IN THE OPEN COURT ON 13 TH AUGUST , 2015 SD/ - SD/ - ( VIJAY PAL RAO ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 13 TH AUGUST , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI