ACIT, Hyderabad V. M/s Pokarna Ltd., Secunderabad

ITA 1089/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9880 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-01-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 13-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Assessee Lawyers: A CHANDRA MOHAN RAO
• Section: 115JB; 10B; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI AKBER BASHA, ACCOUNTANT MEMB ER ITA NO.1089/HYD/2010 : ASST. YEAR: 2006-07 ACIT, CIR-16(3), HYDERABAD. VS M/S. POKARNA LTD., SURYA TOWERS, S.P. ROAD, SECUNDERABAD. (PAN:AABCP2100 Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KVN CHARYA RESPONDENT BY : SHRI A. CHANDRA MOHAN RAO O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF THE CIT (A)-V, HYDERABAD DATED 28-5-2010 AND IT PER TAINS TO THE ASSESSMENT YEAR 2006-07. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS BEFORE US:- 1. THE CIT (A) ERRED IN HOLDING THAT THE EXPENSES TO WARDS FOB CHARGES, INLAND FREIGHT AND FUMIGATION CHARGES HAVE TO BE REDUCED FROM EXPORT TURNOVER AS WELL AS TOTAL TURNOVER FOR CALCULATION OF DEDUCTION UNDER SECTION 10B OF I T ACT IN SPITE ITA NO. 1089/HYD/2 010 M/S. POKARNA LIMITED , SECUNDERABAD. ===================== ====== 2 OF THE FACT THAT EXPORT TURNOVER WAS DEFINED AS PER EXPLANATION 2(III) OF SECTION 10B, BUT NO SUCH DEFINITI ON WAS GIVEN FOR TOTAL TURNOVER. 2. THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.4 7,37,087 MADE UNDER SECTION 115JB OF THE ACT THOUGH THE PROVISIO NS ARE VERY CLEAR THAT AS PER EXPLANATION (1)(II) TO SECTI ON 115JB OF IT ACT, THE AMOUNT OF INCOME TO WHICH THE PROVISIONS OF SECTION 10 ARE APPLICABLE HAS TO BE REDUCED FROM THE NET PROFIT TO ARRIVE AT BOOK PROFIT AND HE NCE, THE ASSESSING OFFICER HAS RIGHTLY ADDED BACK THE EXCESS CLAIM OF DEDUCTION U/S 10B OF I T ACT TO ARRIVE AT THE BOOK PRO FIT UNDER SECTION 115JB OF I T ACT. III. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE FIRST EFFECTIVE ISSUE PERTAINS TO THE EXCLUSION OF INLAND FREIGHT, FOB CHARGES AND FUMIGATION CHARGES FROM THE EXPORT TURNOVER AND ALSO FOR NOT EXCLUDING THE SAM E FROM THE TOTAL TURNOVER. WE HAVE DECIDED THE SIMILAR AND IDENTICAL ISS UE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE IN ITA NOS. 701 TO 703/ HYD/08 DATED 26-9-2008 FOR ASSESSMENT YEAR 2001-02 TO 2004-05 AND IT NO.764/HYD/2007 DATED 11-7-2009 FOR ASSESSMENT YEAR 2003 -04 AND ITA NO.408/HYD/2010 DATED 3-9-2010 FOR ASSESSMENT YEAR 2 005-06, COPIES OF WHICH ARE PRODUCED BEFORE US DURING THE COURSE OF HEARING. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN IN THE ABO VE MENTIONED ORDERS OF THE TRIBUNAL IN THE ASSESSEES OWN CASE, WE REJECT THE G ROUND RAISED BY THE REVENUE ON THIS ISSUE. ITA NO. 1089/HYD/2 010 M/S. POKARNA LIMITED , SECUNDERABAD. ===================== ====== 3 4. THE SECOND EFFECTIVE ISSUE PERTAINS TO THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION TO THE BOOK PROFIT AS DETERMINED UNDER SECTION 115JB OF THE ACT ON ACCOUNT OF DISALLOWANCE S WITH RESPECT TO COMPUTATION UNDER SECTION 10B OF THE ACT. WE HAVE AD JUDICATED THE SIMILAR ISSUE IN THE ASSESSEES OWN CASE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE FOR THE ASSESSMENT YEAR 2006-07 IN ITA NO.408/HYD/10 DATED 3-9-2010 TO WHICH ONE OF US VIZ., ACCOUNTANT MEMBER WAS A PARTY TO THAT ORDER WHEREIN WE HELD TH AT FOR THE PURPOSE OF COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB OF T HE ACT, THE STARTING POINT IS THE NET PROFIT ARRIVED AS PER COMPAN IES ACT AND THE ONLY ADDITION PERMISSIBLE TO THE BOOK PROFIT ARE THOSE SPECI FIED UNDER SECTION 115JB OF THE ACT. NO OTHER DISALLOWANCE OR ADDITIONS CAN BE ADDED OTHER THAN THOSE SPECIFIED IN SECTION 115JB OF THE ACT. THIS ISSU E IS COVERED AGAINST THE REVENUE BY THE DECISION OF SUPREME COURT IN THE CASE OF APOLLO TYRES LIMITED VS. CIT (2002) (255 ITR 273). IN VIEW OF THE ABOVE, WE UPHOLD THE FINDING OF THE CIT (A) AND REJ ECT THE GROUND RAISED BY THE REVENUE ON THIS ISSUE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 28-01-2011. SD/- SD/- (N.R.S. GANESAN) (AKBER BASHA) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 28-01-2011. ITA NO. 1089/HYD/2 010 M/S. POKARNA LIMITED , SECUNDERABAD. ===================== ====== 4 COPY FORWARDED TO: 1. ACIT, CIR-16(3), HYDERABAD. 2. 3. 4.. 5. JMR* M/S. POKARNA LIMITED, 105, SURYA TOWERS, S.P. ROAD, SECUNDERABAD. CIT (A)-V, HYDERABAD. CIT, AP. HYDERABAD. THE DR, ITAT, HYDERABAD.