ACIT, CHENNAI V. Touchenglee Stationery Mfg. Co. Pvt. Limited, Thiruvallur

ITA 1110/CHNY/2015

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9885 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 11-05-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: V S JAYAKUMAR
• Section: 143(3); 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1110 /MDS./2015 ( ! '! / ASSESSMENT YEAR :2007-08) THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORTE CIRCLE 3(1), NEW BLOCK, 4 TH FLOOR, 121,MAHATMA GANDHI ROAD, CEHNNAI 600 034. VS. M/S.TOCHEUNGLEE STATIONERY MFG. CO. PVT. LTD., 104,TIRUVALLUR-SRIPERUMBUDUR ROAD, POLIVAKKAM, TIRUVALLUR 602 002. PAN AAACT 4112 B ( / APPELLANT ) ( / RESPONDENT ) #$ % & / APPELLANT BY : MR. P.RADHAKRISHNAN, JCIT, D.R '(#$ % & / RESPONDENT BY : MR.V.S.JAYAKUMAR,ADVOCATE ) * % +, / DATE OF HEARING : 22.06.2015 -' % +, /DATE OF PRONOUNCEMENT : 26.06.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-11, CHENN AI DATED ITA NO.1110 /MDS/2015 2 30.12.2014 IN ITA NO.1146/2013-14 PASSED UNDER SEC .143(3) READ WITH SECTION SEC. 250 OF THE ACT. 2. THE REVENUE HAS RAISED THREE ELABORATE GROUNDS IN ITS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE REVENUE IS AGGRIEVED BY THE ORDER OF THE LD. CIT (A) WHO HAD DIRECTED THE LD. A SSESSING OFFICER TO EXCLUDE THE AMOUNT OF ` 12,41,037/- BEING PORT HANDLING/CLEARING & FORWARDING CHARGES INCURRED IN LOCAL CURRENCY AND A MOUNT OF ` 55,86,208/- BEING LORRY FREIGHT FROM FACTORY TO POR T INCURRED IN LOCAL CURRENCY BEFORE THE CUSTOMS STATION, FROM THE EXPOR T TURNOVER AS WELL AS FROM THE TOTAL TURNOVER WHILE COMPUTING THE DEDU CTION U/S. 10B OF THE ACT FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. SAK SOFT LTD. (313 ITR (AT) 353 )(CHENNAI)(SB). 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A COMPANY & 100% EXPORT ORIENTED UNDERTAKING, ENGAGED IN THE BUSINESS OF SALE OF LOOSE LEAF ,RING METALS/METAL BINDERS, FILED ITS RETURN OF INCOME ON 26.10.2007 ADMITTING INCOME AS ` 17,42,830/-. SUBSEQUENTLY THE CASE WAS TAKEN UP FOR SCRUTINY AND ASSESSMENT WAS COMPLE TED U/S. 143(3) ITA NO.1110 /MDS/2015 3 R.W.S. 92CA(4) OF THE ACT ON 31.12.2010 WHEREIN THE LD. ASSESSING OFFICER WHILE COMPUTING THE ELIGIBLE DEDUCTION U/S. 10B OF THE ACT EXCLUDED FREIGHT CHARGES OF ` 55,86,208/- AND HANDLING/CLEARING AND FORWARDING CHARGES OF ` 12,41,037/- AGGREGATING TO ` 68,27,245/- ATTRIBUTABLE TO DELIVERY OF ARTICLE OR A THING OUTS IDE INDIA FROM THE EXPORT TURNOVER, HOWEVER THE SAME WAS NOT EXCLUDED FROM THE TOTAL TURNOVER RESULTING IN THE ADDITIONS. 4. AGGRIEVED BY THE ORDER OF THE LD. ASSESSING OFF ICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORT ION OF THE LD.CIT(A)S ORDER IS REPRODUCED HEREIN BELOW FOR RE FERENCE:- 7.2. THE A.R SUBMITTED THAT THE EXPENDITURE IS INC URRED LOCALLY AND HENCE, THE QUESTION OF DISALLOWING THE SAME DOES NO T ARISE. FURTHER, THE A.R RELIED ON THE DECISIONS OF THE HONBLE ITAT IN THE CASE OF PATNI TELECOM (PVT.) LTD. VS. ITO (2008) 22 SOT 38 HYD. WITHOUT PREJUDICE TO THE ABOVE, HE SUBMITTED THAT IN CASE IT SHOULD B E EXCLUDED FROM THE PURPOSE OF EXPORT TURNOVER, THE SAME SHOULD BE EXCL UDED FROM THE TOTAL TURNOVER ALSO. HE RELIED ON THE FOLLOWING CASE LAWS :- 1. CIT VS. GEM PLUS JEWELLERY INDIA LTD.(330 ITR 175) (BOM.) ITA NO.1110 /MDS/2015 4 2. LAKSHMI MACHINE WORKS SC 290 ITR 667(2007) 3. ITO VS. SAK SOFT LTD. (313 ITR (AT) 353)(CHENNAI)( SB) 7.2. THE ISSUE IS SQURELY COVERED BY THE DECISION OF THE HONBLE ITAT IN THE CASE OF ITO VS.SAK SOFT LTD. HENCE, THE A.O IS DIRECTED TO REWORK THE CLAIM OF DEDUCTION U/S.10B OF THE ACT. ACCORDINGLY , THE GROUND IS PARTLY ALLOWED 5. BEFORE US, THE LD. D.R ARGUED IN SUPPORT OF TH E ORDER OF THE LD. ASSESSING OFFICER. THE LD. D.R FURTHER SUBMITTED TH AT THE LD. ASSESSING OFFICER HAD ARRIVED AT THIS DECISION OUT OF ABUNDANT CAUTION, BECAUSE THE REVENUE HAS CARRIED THE MATTER BEFORE THE HONBLE HIGH COURT OF MADRAS AND THE MATTER IS PEND ING. LD. A.R. ON THE OTHER HAND, REITERATED THE SUBMISSIONS MADE BEF ORE THE LD. CIT(A) AND RELIED ON THE DECISION OF THE SPECIAL BE NCH OF ITAT, CHENNAI, IN THE CASE OF ITO VS. SAK SOFT LTD. (313 ITR (AT) 353)(CHENNAI)(SB) AS WELL AS THE HIGH COURT OF BOMB AY, IN THE CASE OF CIT VS. GEM PLUS JEWELLERY INDIA LTD.(330 ITR 175)(BOM.) AND PRAYED THAT THE ORDER OF THE LD.CIT(A) MAY BE UPHELD. 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY P ERUSED THE MATERIALS AVAILABLE ON RECORD. SINCE THE LEARNED C IT(A) HAS ITA NO.1110 /MDS/2015 5 FOLLOWED THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF ITO VS. SAK SOFT LTD., REPORTED IN 313 ITR (AT) 353 (CHENNAI)(SB) AND THE DECISIONS OF THE HONBLE BOMBAY HIGH COURT (SUPRA) WHILE DECIDING THE MATTER IN FAVOUR OF THE ASSESSEE, WE D O NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER OF THE LEARNE D CIT(A). ACCORDINGLY THE ORDER OF THE LEARNED CIT(A) ON THIS ISSUE IS HEREBY CONFIRMED. 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON 26 TH JUNE, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 26 TH JUNE, 2015. K S SUNDARAM. % '+./ 0 /'+ /COPY TO: 1. #$ /APPELLANT 2. '(#$ /RESPONDENT 3. ) 1+ () /CIT(A) 4. ) 1+ /CIT 5. /4 '+5 /DR 6. 6! 7* /GF