Priyanka Overseas (P) Ltd, V. ACIT circle 14 (1),

ITA 1043/DEL/2007

• Counselvise Citation: 104320114 RSA 2007
• Duration Of Justice: 4 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 08-03-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 02-03-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER & SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO. 1043/DEL/2007 ASSESSMENT YEAR: 2000-01 PRIYANKA OVERSEAS PRIVATE LIMITED, VS. ACIT, D-18, CONNAUGHT PLACE, CIRCLE 14(1), NEW DELHI. C.R. BLDG., AAACP0070G NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SMT. PRATIMA KAUSHIK, SR. DR DATE OF HEARING: 21.12.2011 DATE OF PRONOUNCEMENT: ORDER PER K.G. BANSAL, A.M. THE RELEVANT FACTS OF THE CASE, AS MENTIONED IN TH E ORDER OF THE LD. CIT(A) DATED 02.01.2007, ARE THAT THE AS SESSEE- COMPANY INCURRED LOSS OF RS. 44,87,709/- FROM THE B USINESS OPERATIONS. IT ALSO RECEIVED BENEFIT BY WAY OF DEP B SCHEME OF RS. 1,33,48,617/-. THE LD. CIT(A) MENTIONED THA T ITS EXPORT TURNOVER EXCEEDED RS. 10 CRORE. THEREFORE, AS PER THE AMENDED PROVISIONS, EFFECTIVE FROM 01.04.1992, BY W AY OF THIRD PROVISO TO SUB-SECTION (3) OF SECTION 80HHC, THE ASSESSEE IS REQUIRED TO SATISFY THE FOLLOWING CONDI TIONS: - ITA NO. 1043/D/07 2 (I) IT HAD THE OPTION TO CHOOSE EITHER THE BENEFIT UNDER DUTY DRAWBACK SCHEME OR DUTY ENTITLEMENT PASS BOOK SCHEME; AND (II) THE RATE OF DUTY DRAWBACK CREDIT ATTRIBUTABLE TO CUSTOMS DUTY WAS HIGHER THAN THE RATE OF CREDIT ALLOWABLE UNDER THE DUTY ENTITLEMENT PASS BOOK SCHEME. 1.1 AFTER HEARING THE ASSESSEE IT WAS RECORDED THAT IT HAS NO EVIDENCE TO PRODUCE ON BOTH THE AFORESAID MATTERS. ACCORDINGLY, IT HAS BEEN HELD THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION ON ACCOUNT OF DEPB SCHEME BENEFI TS. INCIDENTALLY, IT MAY ALSO BE MENTIONED THAT IT WAS ALSO HELD THAT THE LOSS FROM BUSINESS OPERATIONS HAS TO BE SET OFF AGAINST BENEFITS FROM DEPB SCHEME FOR ARRIVING AT THE GROSS TOTAL INCOME, FROM WHICH THE DEDUCTION IS ADMISSIBLE. 2. THE TRIBUNAL PASSED A CONSOLIDATED ORDER FOR ASSESSMENT YEARS 2001-02 & 2003-04 ON 24.10.2008. IT WAS HELD THAT IN VIEW OF THE WORDS ANY PROFIT ON THE TRANSFER OF DEPB SCHEME BENEFIT BEING THE DUTY REMISSION SCHEME UNDER THE EXPORT AND IMPORT POLICY FORMULATED AND ANNOUNC ED U/S 5 OF THE FOREIGN TRADE (DEVELOPMENT & REGULATION) ACT 1992, THE ASSESSEE IS ENTITLED TO THE DEDUCTION U/S 80HHC ON THE ITA NO. 1043/D/07 3 PROFIT ON THE TRANSFER OF DEPB BENEFIT TO THE EXTEN T OF RS. 11,18,473/-. 3. AGGRIEVED BY THE ORDER, THE COMMISSIONER MOVED A N APPEAL BEFORE THE HONBLE DELHI HIGH COURT, BEARING ITA NO. 723/2009. THIS APPEAL HAS BEEN DISPOSED OFF BY THE COURT ALONG WITH 25 OTHER APPEALS IN A CONSOLIDATED MANNE R. THE CAUSE TITLE IN THE CASE OF THE ASSESSEE APPEARS AT SL. NO. 26. IT HAS BEEN HELD THAT THE DECISION OF THE TRIBUNAL IS BASED UPON THE DECISION OF SPL. BENCH OF MUMBAI TRIBUNAL IN THE CASE OF TOPMAN EXPORT VS. ITO, ITA NO. 5769(MUM.)20 06 DECIDED ON 11.08.2009. THIS DECISION HAS BEEN REVE RSED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . KALPATARU COLOURS & CHEMICALS, 328 ITR 451. SINCE THE DECISION OF SPL. BENCH OF MUMBAI TRIBUNAL STANDS OV ERRULED, THE ORDER OF THE TRIBUNAL WAS REMITTED BACK TO IT F OR DECIDING THE APPEAL ON MERITS AFTER TAKING INTO AN ACCOUNT F ACTUAL POSITION IN THIS CASE. THAT IS HOW THE APPEAL HAS COME UP BEFORE US FOR ADJUDICATION. 4. THE APPEAL WAS FIXED FOR HEARING ON 30.09.2011. NONE ATTENDED ON BEHALF OF THE ASSESSEE ON THIS DATE, NO R ANY APPLICATION FOR ADJOURNMENT WAS RECEIVED. THE CASE WAS AGAIN FIXED FOR HEARING ON 21.12.2011. AGAIN NONE ATTENDED ITA NO. 1043/D/07 4 ON BEHALF OF THE ASSESSEE. HOWEVER, WE HAVE PERUSE D THE FACTS OF THE CASE AND THE DECISION OF THE HONBLE D ELHI HIGH COURT IN THE MATTER WITH THE HELP OF LD. SR. DR. I T IS EXPLAINED TO US THAT AS PER DECISION IN THE CASE OF KALPTARU COLORS AND CHEMICALS, THE WHOLE OF THE BENEFIT IS COVERED AS P ROFITS AND GAINS OF BUSINESS U/S 28(IIID). FURTHER, AS PER TH E PROVISION CONTAINED IN THIRD PROVISO TO SECTION 80HHC, IF THE TURNOVER EXCEEDS RS. 10 CRORE, THE ASSESSEE HAS TO SATISFY T WIN CONDITIONS MENTIONED IN THE ORDER OF THE LD. CIT(A) . WE HAVE ALREADY REFERRED TO THESE CONDITIONS. IT IS HER CA SE THAT THE ASSESSEE DOES NOT SATISFY THESE CONDITIONS. THEREF ORE, IT IS NOT ENTITLED TO ANY DEDUCTION U/S 80HHC IN RESPECT OF DEPB SCHEME BENEFIT. 4.1 WE HAVE CONSIDERED THE FACTS, THE DECISION OF T HE DELHI HIGH COURT IN THIS CASE AND THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF KALPATARU COLORS AND CHEMICALS (SUPRA). WE ARE IN AGREEMENT WITH THE LD. SR. DR THAT FOR GE TTING ANY DEDUCTION U/S 80HHC ON THE FACTS OF THIS CASE, IT W AS FOR THE ASSESSEE TO SHOW THAT IT SATISFIES THE TWIN CONDITI ONS OF (I) OPTION TO CHOOSE BETWEEN DUTY DRAWBACK SCHEME AND D UTY ENTITLEMENT PASS BOOK SCHEME; (II) DUTY DRAWBACK SC HEME WAS MORE BENEFICIAL TO THE ASSESSEE THEN DEPB SCHEM E. ITA NO. 1043/D/07 5 THE LD. CIT(A) HAS RECORDED A CATEGORICAL FINDING T HAT THESE CONDITIONS ARE NOT SATISFIED. THEREFORE, IN TERMS OF THE DECISION OF HONBLE BOMBAY HIGH COURT, REFERRED TO ABOVE, THE ASSESSEE IS NOT ENTITLED TO ANY DEDUCTION U/S 80HHC . ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS UPHELD. 5. IN THE RESULT, THE APPEAL IS DISMISSED. SD/- SD/- (R.P. TOLANI) (K.G. BANS AL) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED: 21.12.11 *KAVITA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR ITA NO. 1043/D/07 6 ITA NO. 1043/D/07 7 ITA NO. 1043/D/07 8 ITA NO. 1043/D/07 9 ITA NO. 1043/D/07 10 ITA NO. 1043/D/07 11