Nest Power Electronics P.Ltd, Cochin V. ACIT, Ernakulam

ITA 1016/COCH/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4369 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2010
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 03-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 22-12-2008
• Court: TRIBUNAL
• Department Lawyers: DR BABU JOSEPH
• Assessee Lawyers: T M SREEDHARAANADV

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NO.1016/COCH/2008 ASSESSMENT YEAR:2005-06 M/S. NEST POWER ELECTRONICS P.LTD., KOCHI-37. PA NO.AABCN 1303K VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIR.1(3), ERNAKULAM. (APPELLANT) ( RESPONDENT ) & I.T.A.NO.34/COCH/2009 ASSESSMENT YEAR:2005-06 THE ASST. COMMISSIONER OF INCOME-TAX, CIR.1(3), ERNAKULAM. VS. M/S. NEST POWER ELECTRONICS P.LTD.,KOCHI-37. PA NO.AABCN 1303K (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI T.M. SREEDHARAAN,ADV. REVENUE BY DR. BABU JOSEPH, SR.DR O R D E R PER N.VIJAYAKUMARAN,J.M: BOTH THESE APPEALS ARE CROSS APPEALS FOR THE ASSESSMENT YEAR 2005-06. THESE APPEALS ARE DIRECT ED AGAINST THE ORDER OF THE CIT(APPEALS)II, KOCHI DATE D 14-11- 2008. THESE APPEALS ARISE OUT OF THE ASSESSMENT C OMPLETED U/S.143(3) R.W.S.154 OF THE I.T.ACT,1961. ITA NOS.1016/COCH/2008 & 34/COCH/2009 2 2. IN THE REVENUES APPEAL THE ELIGIBILITY OF EXEMP TION U/S.10A IS QUESTIONED WHEREAS THE APPEAL OF THE ASS ESSEE IS AGAINST THE QUANTUM DETERMINATION, EITHER IT IS NET OR GROSS. BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 3. THE FACTS RELEVANT ARE THAT THE ASSESSEE IS A CO MPANY ENGAGED IN THE BUSINESS OF MANUFACTURING, ASSEMBLIN G AND EXPORT OF ELECTRONIC DEVICES. FOR THE ASSESSMENT Y EAR UNDER CONSIDERATION, ASSESSEE FILED ITS RETURN OF INCOME WITH A CLAIM OF EXEMPTION U/S.10A TO THE TUNE OF RS.3,69, 08,624/-. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE COND ITIONS OF SECTION 10A(2) WERE NOT COMPLIED WITH SO ALSO PROVI SIONS OF SECTION 10A(1) CANNOT BE APPLIED. HENCE, THE ASSE SSEE IS NOT ELIGIBLE FOR 10A EXEMPTION. 4. ON APPEAL TO THE CIT(APPEALS), THE LD. CIT(APPEA LS) FOUND THAT AS PER NOTIFICATION NO. SO 3231 DATED 29 -9-1987, COCHIN EXPORT PROCESSING ZONE HAS BEEN TREATED AS A FREE TRADE ZONE FOR THE PURPOSE OF SECTION 10A. THEREF ORE, AS PER THE SECOND PROVISO TO SECTION 10A(1), THE ASSES SEE COMPANY WHICH IS A 100% EOU, NOW SITUATED IN SEZ CO CHIN, ITA NOS.1016/COCH/2008 & 34/COCH/2009 3 IS ENTITLED FOR DEDUCTION U/S.10A. ON THIS ISSUE WE HEARD THE LD. D.R. AND THE LD.COUNSEL FOR THE ASSESSEE. 5. WE FIND THAT ON IDENTICAL SET OF FACTS, COCHIN B ENCH OF THE TRIBUNAL, IN THE CASE OF SUN FIBRE OPTICS (P) L TD. VS. ACIT IN ITA NO.925/COCH/2008 AND IN ITA NOS.477 & 478/COCH/2007 AND 1012/COCH/2008 VIDE THEIR ORDER D ATED 16-10-2009 HELD THAT UNDER SIMILAR SET OF FACTS, 10 A EXEMPTION IS TO BE GIVEN TO THE ASSESSEE AND THAT E XEMPTION ALSO TO BE ON THE ISSUE OF TOTAL TURNOVER BY FOLLOW ING THE DECISION CHENNAI BENCH (SPECIAL BENCH) IN THE CASE OF SAK SOFT LTD. (2009) 121 TTJ 865, WHICH IS BINDING ON U S. RESPECTFULLY, FOLLOWING THE SAID DECISION, WE HAVE NO HESITATION TO ALLOW THE CLAIM OF THE ASSESSEE, WHIC H IS AS PER GROUND NO.3 TO BE SPECIFIC. THE RESTRICTED QUANTU M OF DEDUCTION IS NOT JUSTIFIED AS THE BALANCE AMOUNT RE PRESENTED THE VALUE OF IMPORTED RAW MATERIAL SUPPLIED BY THE FOREIGN CUSTOMERS. THIS ISSUE WAS CONSIDERED IN THE ASSE SSEES SISTER CONCERN, VIZ. SUN FIBRE OPTICS (P) LTD., CIT ED SUPRA, WHEREIN THE TRIBUNAL HELD THAT EXPRESSION TURNOVER OR TOTAL TURNOVER SHOULD BE THE SAME FOR THE PURPOSE OF SECT ION 10A. IN OTHER WORDS, THERE CANNOT BE TWO DIFFERENT TURNO VER FOR THE PURPOSE OF COMPUTATION OF 10A DEDUCTION. THE FACTS ITA NOS.1016/COCH/2008 & 34/COCH/2009 4 BEING IDENTICAL, RESPECTFULLY FOLLOWING THE DECISIO N OF THE COCHIN BENCH, WE HAVE NO HESITATION IN SETTING ASID E THE ORDER OF THE LD. CIT(APPEALS) TO THAT EXTENT AND AL LOW THE CLAIM OF THE ASSESSEE AS PRAYED FOR. 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. SD/- SD/- (SANJAY ARORA) (N.VIJAYKUMARAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM, DATED THE 04 TH JUNE,2010. PM. COPY FORWARDED TO: 1. M/S. NEST POWER ELECTRONICS P.LTD., 43A, CSEZ, KAKK ANAD, KOCHI-37. 2. THE ACIT., CIR.1(3), ERNAKULAM. 3. CIT(A)-II, KOCHI. 4. CIT, KOCHI. 5. D.R.