ACIT, Ludhiana V. M/s Jawandsons, Ludhiana

ITA 1067/CHANDI/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5338 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-07-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 10-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: PRAMOD VATS
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER AND MS.SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1067 /CHD/2010 (ASSESSMENT YEAR : 2007-08) THE A.C.I.T., VS. M/S JAWANDSONS, CIRCLE VI, STREET NO.7,BHAI HIMMAT SINGH NAGAR, LUDHIANA. DUGRI, LUDHIANA. PAN: AABFJ8887H APPELLANT) (RESPONDENT) APPELLANT BY : SMT.JAISHREE SHARMA, DR RESPONDENT BY : SHRI PRAMOD VATS O R D E R PER SUSHMA CHOWLA, J.M, : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME-TAX(A), DATED 14.06.2010 REL ATING TO ASSESSMENT YEAR 2007-08 AGAINST THE ORDER PASSED UNDER SECTION 143(3)/147 OF THE I.T. ACT, 1961. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A)-II, LUDHIANA HAS ERRED IN ALLOWING THE DEDUCTION U/S 80IB ON SALE PROCEEDS OF DEPB LICENSES DISCLAIMED BY EXPORT HOUSE IN ASSESSEES FAVOUR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A)-II, LUDHIANA HAS ERRED IN ALLOWING 2 THE DEDUCTION U/S 80IB OF I.T. ACT ON DEMURRAGE AMOUNTING TO RS.6,0,241/- 3. THE LEARNED D.R. FOR THE REVENUE POINTED OUT THA T THE ISSUE IN GROUND NO.1 IS COVERED AGAINST THE ASSESSEE BY THE ORDER OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN ASSESSEES OWN CASE, REPORTED IN 328 ITR 442 (P&H) AND THE ISSUE IN GROUND NO.2 IS ALSO COVERED AGAINST THE ASSESSEE IN VIEW OF THE RATIO LAID DOWN BY THE APEX COURT IN LIBERTY INDIA VS. CIT, 317 ITR 218 (SC). 4. THE LEARNED A.R. FOR THE ASSESSEE HAS MOVED AN A PPLICATION FOR ADJOURNMENT WHICH IS REJECTED IN VIEW OF THE ABOVE SAID STAND OF THE LEARNED D.R. FOR THE REVENUE AND THE APPEAL IS HEAR D. 5. THE FIRST ISSUE RAISED IN THE PRESENT APPEAL IS IN RESPECT OF THE DEDUCTION ALLOWABLE UNDER SECTION 80IB OF THE ACT O N SALE PROCEEDS OF DEPB. SIMILAR ISSUE AROSE BEFORE THE HON'BLE PUNJA B & HARYANA HIGH COURT IN ASSESSEES OWN CASE, REPORTED IN 328 ITR 4 42 (P&H) AND FOLLOWING THE SAME WE HOLD THAT THE ASSESSEE IS NOT ENTITLED TO THE DEDUCTION UNDER SECTION 80IB OF THE ACT ON THE SALE PROCEEDS OF THE DEPB LICENCE. ACCORDINGLY, THE ORDER OF THE CIT(A) IS REVERSED AND THE ORDER OF THE ASSESSING OFFICER IS RESTORED ON THIS GROUND. THE GROUND OF APPEAL RAISED BY THE REVENUE IS ALLOWED. 6. THE ISSUE IN GROUND NO.2 IS IN RESPECT OF ALLOWA NCE OF DEDUCTION UNDER SECTION 80IB OF THE ACT ON DEMURRAGE CHARGES. THE HON'BLE SUPREME COURT IN LIBERTY INDIA (SUPRA) HAD LAID DOW N THAT ONLY SUCH EXPENDITURE WHICH IS DERIVED FROM THE BUSINESS OF T HE INDUSTRIAL UNDERTAKING IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB OF THE ACT. IN VIEW OF THE SAME WE HOLD THAT THE DEMURRAGE CHARGES BEING NOT DERIVED FROM THE ELIGIBLE BUSINESS ARE NOT ENTITLED FOR THE CLAIM OF DEDUCTION 3 UNDER SECTION 80IB OF THE ACT. THE ORDER OF THE CI T(A) IS THUS REVERSED AND THE ORDER OF THE ASSESSING OFFICER IS RESTORED. THE GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH DAY OF JULY, 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15 TH JULY 2011 RATI COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH