M/s. JYOTI STEEL INDUSTRIES, MUMBAI V. ITO Wd. - 19(3)(2), MUMBAI

ITA 1075/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2303 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Next Hearing Date: 06-04-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 05-02-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMOL KAMAL
• Assessee Lawyers: I P RATHI
• Keywords: Set aside
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH K, MUMBAI BEFORE SHRI SHRI A.L. GEHLOT, A.M. & SMT. ASHA VIJ AYRAGHAVAN, J.M. ITA NO. 1075/M/2007 ASSESSMENT YEAR: 2003-04 JYOTI STEEL INDUSTRIES , APPELLANT KAKAD BHAVAN, 4 TH FLOOR, OPP. GAIETY GALAXY CINEMA, 30 TH ROAD, BANDRA (W), MUMBAI 400 050 (PAN AAAFJ3489J) VS. INCOME TAX OFFICER, RESPONDENT WARD 19(3)(2), MUMBAI. APPELLANT BY : MR. I.P. RATHI RESPONDENT BY : MR. AMOL KAMAL ORDER PER A.L. GEHLOT, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-XIX, MUMBAI, PASSED ON 10.11.2006 FOR THE AS SESSMENT YEAR 2003-04. 2. GROUND NO.1 IS IN RESPECT OF REASSESSMENT PROCEE DINGS U/S 147, WHICH HAS NOT BEEN PRESSED BY THE LEARNED AR AT THE TIME OF HEARING BEFORE US. THEREFORE, THIS GROUND OF APPEAL IS DISM ISSED AS NOT PRESSED. 3. GROUND NO. 4 AND GROUND NO. 8 ARE GENERAL IN NAT URE, THEREFORE, THESE GROUNDS ARE NOT REQUIRED TO BE ADJUDICATED BY US. 4. GROUND NO. 3 IS IN RESPECT OF CHARGEABILITY OF I NCOME TAX ON SUM SPECIFIED U/S 28(III). ITA NO. 1075/M/07 JYOTI STEEL INDUSTRIES. 2 5. THE LEARNED AR HAS SUBMITTED THAT THIS ISSUE COV ERED AGAINST THE ASSESSEE BY THE SPECIAL BENCH DECISION OF ITAT MUMBAI IN THE CASE OF M/S TOPMAN EXPORTS & OTHERS, [2009] 318 ITR (AT ) 87(MUM.)(SB). 6. AFTER HEARING THE LEARNED DR, WE FIND THAT THE I SSUE OF CHARGEABILITY OF INCOME TAX SPECIFIED U/S 28(III) O F THE ACT IS COVERED AGAINST THE ASSESSEE BY THE ORDER OF ITAT IN THE CA SE OF M/S TOPMAN EXPORTS & OTHERS (SUPRA), THEREFORE, WE RESPECTFULL Y FOLLOWING THE DECISION OF THE ITAT IN THE SAID CASE AND IN THE LI GHT OF THAT WE CONFIRM THE ORDER OF CIT(A) ON THIS ISSUE. 7. GROUND NOS. 5 & 6 ARE PERTAINING TO DEPB AND CAL CULATION OF DEDUCTION U/S 80 HHC. 8. THE LEARNED AR HAS CANVASSED THAT THESE ISSUES A RE COVERED BY THE DECISION OF ITAT SPECIAL BENCH IN THE CASE OF M /S TOPMAN EXPORTS CITED SUPRA. 9. AFTER HEARING THE LEARNED DR, SINCE THESE ISSUES OF DEPB AND CALCULATION OF DEDUCTION U/S 80 HHC ARE COVERED BY THE SPECIAL BENCH DECISION OF ITAT IN THE CASE OF M/S TOPMAN EXPORTS, WE REMIT THESE ISSUES BACK TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUES OF DEPB ENTITLEMENT AND CALCULATION OF DEDUCTION U/ S 80 HHC IN THE LIGHT OF THE DECISION OF ITAT IN THE SAID CASE AFTE R PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 10. GROUND NO. 7 IS IN RESPECT OF CALCULATION OF DE DUCTION U/S 80 HHC IN RESPECT OF EXCISE REFUND. 11. THE LEARNED AR POINTED OUT THAT THE THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT IN T HE CASE OF M/S ITA NO. 1075/M/07 JYOTI STEEL INDUSTRIES. 3 SUPER TRADING COMPANY IN ITA NO. 4249 & 4250/M/06 V IDE ORDER DATED 17 TH NOVEMBER, 2009. 12. AFTER HEARING THE LEARNED DR, WHO HAS RELIED UP ON THE ORDERS OF THE REVENUE AUTHORITIES, AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THIS ISSUE IS COVERED BY THE DECISION OF ITAT IN THE CASE OF M/S SUPER TRADING COMPANY CITED SUPRA WHEREIN THE ITAT HELD AS UNDER:- 13. IT CAN BE NOTICED THAT THE DUTY DRAWBACK OR DEP B OR DFRC ARE EXPORT INCENTIVES, WHICH ARE ALLOWED TO THE EXPORTE R TO RECOUP THE CUSTOM DUTY INCURRED ON THE IMPORT OF THE GOODS TO BE USED FOR EXPORT. IN THE LIKE MANNER WHEN THE GOODS ARE PURCHASED LOCALLY AND ARE SUBSEQUENTLY EXPORTED AS SUCH OR AFTER PROCESSING OR USING IN M ANUFACTURE, THE EXCISE DUTY SO INCURRED IS RECOUPED TO THE EXPORTER AT THE PRESCRIBED RATE. THE OBJECT BEHIND THE REFUND OF CUSTOM DUTY AND EXCISE DUTY, BY WAY OF REBATE REMAINS THE SAME, VIZ. TO COMPENSATE THE EXP ORTER IN RESPECT OF CUSTOM OR EXCISE DUTY, PAID BY HIM ON THE GOODS PUR CHASED FROM DOMESTIC OR INTERNATIONAL MARKET, WHICH HAVE BEEN SUBSEQUENT LY EXPORTED. BOTH THESE INCENTIVES ARE ALLOWED BY THE GOVERNMENT OF INDIA. BUT FOR THE FACT THAT THE REFUND OF EXCISE DUTY IS ON LOCAL PURCHASE S AND REFUND OF CUSTOM DUTY IS ON IMPORTED GOODS, THERE IS NO QUALITATIVE DIFFERENCE IN THE NATURE OF THESE TWO IN SO FAR AS THE EXPORTER IS CONCERNED. BOTH ARE IN CONSIDERATION OF EXPORT MADE OR TO BE MADE. WHEN THE SPECIAL BENC H IN TOPMAN EXPORTS (SUPRA) HAS HELD THAT THE DUTY DRAWBACK OR DEPB ETC . FALL UNDER SECTION 28(IIIB), THERE IS NO REASON TO DEVIATE FROM THE SA ME FINDING IN THE CONTEXT OF EXCISE DUTY REFUND, MORE SO WHEN THERE IS NO SP ECIFIC CLAUSE U/S 28 COVERING THE AMOUNT OF EXCISE DUTY REFUND AND NATU RE OF BOTH THE INCENTIVES, BY AND LARGE, CONTINUES TO REMAIN THE SAME. THUS WE HOLD THAT THE EXCISE DUTY REFUND ALLOWED TO THE ASSESSEE BY THE GOVERNMENT OF INDIA UNDER THE SCHEME FORMULATED AGAINST THE EXPO RT OF GOODS, WOULD ALSO STAND COVERED U/S.28(IIIB) OF THE ACT. WE, THE REFORE, SET ASIDE THE IMPUGNED ORDER ON THIS ISSUE AND DIRECT THE ASSESSI NG OFFICER TO RECOMPUTE THE DEDUCTION U/S.80HHC BY CONSIDERING THE AMOUNT O F CENVAT REFUND AS FALLING U/S.28(IIIB). IN VIEW OF OUR DECISION ON GR OUND NO.2 BY WHICH WE HAVE HELD THAT THE CENVAT REFUND RECEIVED IS TO BE TREATED AS EXPORT INCENTIVE U/S.28(IIIB), THE ALTERNATIVE GROUND RAIS ED BY THE REVENUE AS GROUND NO. 3 BECOMES ACADEMIC. 13. SINCE THE ISSUE UNDER CONSIDERATION IS IDENTICA L TO THAT OF THE SAID DECISION OF ITAT, WE REMIT THIS ISSUE TO THE F ILE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUE IN THE LIGHT OF THE S AID DECISION OF ITAT AFTER PROVIDING OPPORTUNITY OF HEARING TO THE ASSES SEE. ITA NO. 1075/M/07 JYOTI STEEL INDUSTRIES. 4 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ON THIS 13 TH DAY OF APRIL, 2010. SD/- SD/- (ASHA VIJAYRAGHAVAN) (A.L. GEHLO T) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: 13 TH APRIL, 2010. COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, K BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV