M/S. TREND SETTERS, MUMBAI V. THE ACIT RG 14(3)(4), MUMBAI

ITA 111/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1036 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 15-07-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 04-01-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K BALODIA
• Assessee Lawyers: PRITI SHUKLA
• Keywords: Opportunity of being heard
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI PRAMOD KUM AR ,(AM) ITA NO.111/MUM/2008 ASSESSMENT YEAR : 1999-00 M/S. TREND SETTERS 265, SHAMALDAS GANDHI MARG ENGINEER BLDG. MUMBAI-400 002. ..( APPELLANT ) P.A. NO. (AAAFT 1573 B) VS. INCOME TAX OFFICER -14(3)(4) AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. ..( RESPONDENT ) APPELLANT BY : MS. PRITI SHUKLA RESPONDENT BY : SHRI N. K. BALODIA O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 26.10.2007 PASSED BY THE LD. CIT(A) FOR T HE ASSESSMENT YEAR 1999-00. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE F IRM IS ENGAGED IN THE BUSINESS OF EXPORT OF BED LINEN, FILED RETURN DECLARING TOTAL INCOME AT RS.NIL AFTER CLAIMING DEDUCTION U/S.80HHC RS.4,45,54,841/-. THE UNDISPUTED FACTS RECORDED BY TH E LD. CIT(A) WITH REGARD TO THE PROFIT ON DEPB ARE THAT WHILE CA LCULATING THE BENEFIT U/S.80HHC, THE APPELLANT HAS PROPORTIONATELY ENHANCED IN RATIO OF EXPORT TURNOVER AND TOTAL TURNOVER 90% OF INCENTIVE UNDER THE ITA NO.111/M/08 A.Y:99-00 2 SCHEME DEPB LICENCE AT RS.5,46,51,200/- AS PER FIRST PROVI SO TO SECTION 80HHC(3). ACCORDING TO HIM, THE PREMIUM REALIZED OVER THE TRANSFER OF DEPB LICENCE IS ONLY QUALIFIED FOR PROFIT AS CONTEMPLATED U/S.28(IIID). THE ASSESSING OFFICER ON THE OTHER HAND NO TED THAT THE APPELLANTS CASE IS COVERED BY THIRD PROVISO TO SECTION 8 0HHC(3) HAVING GOT THE EXPORT TURNOVER EXCEEDING OF RS.10.00 CRORES DURING THE PREVIOUS YEAR IN RESPECT OF ENTIRE AMOUNT REALIZED ON THE TRANSFER OF DEPB LICENCE. THE ASSESSING OFFICER FURTHER HELD THAT T HE APPELLANT HAS NOT SATISFIED THE CONDITION GIVEN IN THIRD PROVISO T O SECTION 80HHC(3) IN TERMS OF NOT HAVING THE OPTION TO CHOOSE THE DUTY DRAWBACK OR DEPB. FURTHER THE ASSESSING OFFICER ALSO GAVE THE FINDING THAT THE ENTIRE AMOUNT RECEIVED ON TRANSFER OF DEPB A S A PROFIT HOLDING THAT THE COST OF ACQUIRING SUCH DEPB LICENCE IS NI L. THUS THE ASSESSING OFFICER AFTER DISALLOWING THE DEDUCTION U/S.80HHC IN TOTO COMPLETED THE ASSESSMENT AT AN INCOME OF RS.4,47,24,110/ - VIDE ORDER DATED 12.12.2006 PASSED U/S.143(3) R.W.S.147 OF THE INCOME TAX ACT, 1961 (THE ACT). ON APPEAL, THE LD. CIT(A) W HILE UPHOLDING THE ASSESSING OFFICERS VIEW IN THIS REGARD, PARTLY ALLOWED TH E ASSESSEE'S APPEAL ON OTHER ISSUES. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE DE NIAL OF DEDUCTION U/S.80HHC ON DEPB. 4. AT THE TIME OF HEARING BOTH PARTIES HAVE AGREED T HAT THE ISSUE STANDS COVERED BY THE RECENT JUDGMENT OF HONBLE JURISDICT IONAL HIGH COURT IN CIT VS. KALPATARU COLOURS AND CHEMICALS IN INCOME T AX APPEAL (LODG.)NO.2887 OF 2009 DATED 28/29 JUNE, 201 0 AND ALSO AGREED THAT THE MATTER REQUIRES TO BE RESTORED TO THE FILE OF THE ITA NO.111/M/08 A.Y:99-00 3 ASSESSING OFFICER WITH A DIRECTION TO RECONSIDER THE ISSUE I N LINE WITH THE VIEW TAKEN IN THE AFORECITED DECISION. 5. THAT BEING SO AND IN THE ABSENCE OF ANY OTHER CONTRA RY MATERIAL PLACED ON RECORD BY THE PARTIES, WE RESPECTFULLY FOLLOW ING THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT SUPRA, SET ASID E THE ORDERS PASSED BY THE REVENUE AUTHORITIES ON THIS ISSUE AND DIRE CT THE ASSESSING OFFICER TO RECONSIDER THE CLAIM OF THE ASSESSEE IN ACCO RDANCE WITH LAW I.E. IN THE LIGHT OF THE RECENT DECISION IN T HE CASE OF KALPATARU COLOURS AND CHEMICALS SUPRA, AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, PARTLY ALLOWED FOR STATISTICAL PURPOSE S. 6. IN THE RESULT, ASSESSEE'S APPEAL STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23.7.2010. SD/- SD/- (PRAMOD KUMAR) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 23.7.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI. ITA NO.111/M/08 A.Y:99-00 4 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 15.7.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 15.7.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 23.7.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 26.7.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER