M/S. INTERNATIONAL GOLD CO.LTD., MUMBAI V. INCOME TAX OFFICER, RANGE 8(2)(1), MUMBAI

ITA 1118/MUM/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9246 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 10-10-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 18-02-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI I.P.BANSAL,JUDICIAL MEMBER & SHRI D.KARUNAKARARAO, ACCOUNTANT MEMBER ITA NO.1118/MUM/2009(A.Y. 2005-06) MESSRS INTERNATIONAL GOLD. CO., G-48, GEM & JEWELLERY COMPLEX, SEEPZ, ANDHERI (EAST), MUMBAI - 400 096. PAN: AAACI 28304H (APPELLANT) VS. INCOME TAX OFFICER, RANGE 8(2)(1), 2 ND FLOOR, AAYKAR BHAVAN, CHURCHGATE, MUMBAI - 20. (RESPONDENT) ITA NO.1344/MUM/2009(A.Y. 2005-06) INCOME TAX OFFICER, RANGE 8(2)(1), 2 ND FLOOR, AAYKAR BHAVAN, CHURCHGATE, MUMBAI - 20. (APPELLANT) VS. MESSRS.INTERNATIONAL GOLD. CO., G-48, GEM & JEWELLERY COMPLEX, SEEPZ, ANDHERI (EAST), MUMBAI - 400 096. PAN: AAACI 28304H (RESPONDENT) ASSESSEE BY : SHRI NITESH JOSHI RESPONDENT BY : SHRI MANOJ KUMAR DATE OF HEARING : 17/12/2012 DATE OF PRONOUNCEMENT : 17/12/2012 ORDER PER I.P.BANSAL, J.M THESE ARE CROSS APPEALS. THEY ARE DIRECTED AGAIN ST ORDER PASSED BY LD. CIT(A)-VIII, MUMBAI DATED 5/12/2008 FOR ASSESSMENT YEAR 2005-06. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AS WELL AS REVENUE READ AS UNDER: ITA NO.1118/MUM/2009(A.Y. 2005-06) ITA NO.1344/MUM/2009(A.Y. 2005-06) 2 GROUNDS OF ASSESSEES APPEAL: 1.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN TREATING THE INTEREST OF RS.6.29268/- RECEIVED ON DEPOSITS PLACE D WITH BANKS AS INCOME FROM OTHER SOURCES, THEREBY EXCLUDING THE SAME FROM THE BUSINESS INCOME AND THE AMOUNT ELIGIBLE FOR EXEMPTION UNDER SECTION 10A OF THE INCOME-TAX ACT 1961. IT IS SUBMITTED THAT THE APPELLANT HAS PLACED DEPOS ITS PURSUANT TO CREDIT FACILITIES AVAILED BY THE COMPANY. THE APPE1LANE HA S PAID INTEREST TO THE BANKS ON THE BORROWINGS AT THE SAME TIME HAS RECEIV ED INTEREST ON DEPOSITS. THE INTEREST RECEIVED ON DEPOSITS OUGHT TO BE NETTE D OFF AGAINST INTEREST PAYMENTS. THE CONCLUSION ARRIVED AT BY THE LEARNED ASSESSING OFFICER IS ERRONEOUS AND CONTRARY TO THE LAW. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE DISALLOWANCE OF RS.2,04,L0L/- MADE UNDER SECTION 2( 24) (X) RWS 36(1) (VA) OF THE ACT BEING EMPLOYEES CONTRIBUTIONS TO THE PROVIDENT FUND PAID AFTER THE DUE DATES. IT IS SUBMITTED THAT THE APPELLANT HAS PAID THE AMO UNT RECOVERED FROM THE EMPLOYEES TOWARDS PROVIDENT FUND CONTRIBUTIONS TO T HE RESPECTIVE AUTHORITIES WITHIN THE TIME AND AS SUCH NO DISALLOWANCE IS CALL ED FOR. IT IS FURTHER SUBMITTED THAT THE APE1LANT HAD PAID THE ENTIRE AMOUNTS RECEIVED TOWARDS PF CONTRIBUTION TO THE RESPECTIVE AUTHORITI ES AND AS SUCH SAME IS OUGHT TO BE ALLOWED AS DEDUCTION IN COMPUTING THE I NCOME FOR THE YEAR. 3.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE DISALLOWANCE OF RS.L,09,368/- MADE UNDER SECTION 2( 24)(X) RWS 36(1)(VA) OF THE ACT BEING EMPLOYEES CONTRIBUTIONS TO THE ESIC PAID AFTER THE DUE DATES. IT IS SUBMITTED THAT THE APPELLANT HAS PAID THE AMO UNT RECOVERED FROM THE EMPLOYEES TOWARDS CONTRIBUTION TO ESIC TO THE RESPE CTIVE AUTHORITIES WITHIN THE TINE AND AS SUCH NO DISALLOWANCE IS CALLED FOR. IT IS FURTHER SUBMITTED THAT THE APPELLANT HAD PAID THE ENTIRE AMOUNTS RECEIVED TOWARDS ESIC CONTRIBUTION TO THE RESPECTIVE AUTHORI TIES AND AS SUCH SAME IS OUGHT TO BE ALLOWED AS DEDUCTION IN COMPUTING THE I NCOME FOR THE YEAR. 4. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN HOLDING THAT THE DISALLOWANCE/ADDITION MADE PURSUANT TO SECTION 2(24 )(X) RWS 36(1)(VA) OF THE ACT SHALL BE EXCLUDED FROM THE BUSINESS INCOME FOR THE PURPOSE OF COMPUTING AMOUNT EXEMPT UNDER SECTION 1OA OF THE ACT. ITA NO.1118/MUM/2009(A.Y. 2005-06) ITA NO.1344/MUM/2009(A.Y. 2005-06) 3 IT IS SUBMITTED THAT THE SAID INCOME IS PART AND P ARCEL OF THE BUSINESS INCOME OF THE APPELLANT AND AS SUCH CANNOT BE EXCLUDED FRO M THE AMOUNT ELIGIBLE FOR EXEMPTION UNDER SECTION 1OA OF THE ACT. GROUNDS OF REVENUES APPEAL: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE A.O. ON ACCOUNT OF JOB WORK CHARGES WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE A.O. TOW ARDS LATE PAYMENT OF ESIC AND P.F. OF RS.15,78,939/- WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE. THE HONBLE ITAT IN THE CASE OF CIT VS. GODAVARI (MANNAR) SAHAKARI SAKHAR KARKHANA, 298 ITR 149 (BOM) ON SIMILAR ISSUE HAS GIVEN THE DECISION IN FAVOUR OF THE REVENUE. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS TO BE SET ASIDE AND THAT OF THE ITO/AC/DCIT BE RESTORED. 2. GROUND NO.1 OF ASSESSEES APPEAL WAS STATED TO BE COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y 2003-04. AS IT APPEARS FROM THE GROUNDS OF APPEAL THE DISPUTE I S REGARDING GRANT OF EXEMPTION UNDER SECTION 10A OF THE INCOME TAX ACT,1961(THE AC T) WITH REGARD TO INTEREST EARNED BY THE ASSESSEE ON MARGIN MONEY DEPOSITED WI TH THE BANK TO AVAIL CREDIT FACILITIES AND ALSO ADVANCING THE LOAN TO ITS EMPLO YEES ON WHICH INTEREST HAS BEEN EARNED. SIMILAR QUESTION WAS CONSIDERED BY THE ITA T IN ITA NO.1615/M/08 AND 1209/M/08 ORDER DATED 24/4/2012(COPY OF WHICH HAS BEEN PLACED ON RECORD AND COPY WAS ALSO GIVEN TO LD. DR). THE RELEVANT OBSER VATIONS OF THE TRIBUNAL ARE AS FOLLOWS: 3. DURING THE YEAR UNDER CONSIDERATION, THE ASSESS EE RECEIVED INTEREST ON FIXED DEPOSITS KEPT IN THE BANK AS MARGIN MONEY FOR AVAILING THE FACILITIES FROM THE BANK (RS. 6,25,780) AND INTEREST RECEIVED ON AD VANCES PAID TO THE EMPLOYEES (RS. 86,876). THE AGGREGATE OF BOTH THESE TYPES OF INTERESTS, COME TO RS. 7,12,656/-. ACCORDING TO THE AO, SINCE THESE IN TERESTS HAVE NOT BEEN DERIVED FROM THE BUSINESS ACTIVITY OF THE ASSESSE E COMPANY, THESE WOULD HAVE TO BE EXCLUDED FOR THE PURPOSES OF EXEMPTION U NDER SECTION 1OA AS THESE INTERESTS SHOULD BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. THE CIT(A) SUSTAINED THE VIEW TAKEN BY THE AO. 4. THE ASSESSEE IS NOW BEFORE THE 1TAT. ITA NO.1118/MUM/2009(A.Y. 2005-06) ITA NO.1344/MUM/2009(A.Y. 2005-06) 4 5. BEFORE US, THE AR OF THE ASSESSEE COMPANY POINTE D OUT AS MENTIONED IN GROUND NO. 1(A) THAT THE INTEREST RECEIVED WAS ON D EPOSITS MADE IN THE BANK AS MARGIN MONEY, PLACED WITH THE BANKS TO AVAIL CREDIT FACILITIES. BESIDES THIS, THE ASSESSEE HAD ALSO ADVANCED LOANS TO ITS EMPLOYEES, FROM WHOM THE ASSESSEE HAD EARNED AN AMOUNT OF RS. 86,876/- AS INTEREST. I T WAS SUBMITTED BY THE AR THAT BOTH TYPES OF INTERESTS RS. 6,25,780 + RS. 86, 876/- HAD BEEN EARNED DURING THE COURSE OF REGULAR BUSINESS OF THE ASSESS EE. 5. THE DR STRONGLY SUPPORTED THE VIEW TAKEN BY THE REVENUE AUTHORITIES AND CITED THE CASE OF LIBERTY INDIA VS CIT REPORTED IN 317 1TR 218 (SC). 6. THE ISSUE BEFORE US IS WHETHER INTEREST EARNED O N THE FUNDS PARKED IN FIXED DEPOSITS WITH THE BANKS TO AVAIL VARIOUS CREDIT FAC ILITIES WOULD HAVE THE CHARACTER OF BUSINESS INCOME OR WOULD IT BE ASSIGNE D THE CHARACTER OF INCOME FROM OTHER SOURCES. THE FACT THAT THE INTEREST HAS BEEN RECEIVED ON FIXED DEPOSITS FOR THE PURPOSES OF AVAILING CREDIT AND OT HER FACILITIES HAS NOT BEEN DISPUTED BY THE REVENUE AUTHORITIES. AT THIS POINT, THE AR POINTED OUT THE CASE APPENDED IN THE PAPER BOOK, DECIDED BY THE CO-ORDIN ATE BENCH OF MUMBAI ITAT IN ITO VS JEWELTEX INTERNATIONAL PVT LTD. IN 1 74 NO. 3302/M/09 ACCEPTED THE ASSESSEES SUBMISSION AND HELD THAT IF THE INTE REST INCOME FORMS PART OF THE PROFITS OF THE BUSINESS OF THE UNDERTAKING, THE N IN THE LIGHT OF THE STATUTORY FORMULA THE RESULTANT FIGURE AFTER APPLYING THE FOR MULA HAS TO BE STATUTORILY CONSIDERED AS PROFITS DERIVED (MM EXPORT OF ARTICLE S. THEREFORE, ONCE THE CONCLUSION IS REACHED AS TO WHAT ELEMENTS FORM THE BUSINESS INCOME, THE STATUTORY FORMULA HAS TO BE APPLIED AND SUB SECTION (4)/EAVES NO CHOICE, AND IT TAKES OVER, AS PRESCRIBED IN SECTION 1OB(4). THE AR ALSO CITED THE CASE OF ANOTHER DECISION BY THE COORDINATE BENCH AT MUMBAI, IN THE CASE V OF ITO V/S GREYTRIX (INDIA) PVT. LTD., ITA NO. 57 87/MUM/2009, WHEREIN, THE BENCH HAD CITED THE CASE OF HONBLE BOMBAY HIGH COU RT, IN CIT V/S INDO SWISS JEWELS LTD., REPORTED IN 284 ITR 389 (BORN), WHEREIN THE HONBLE BOMBAY HIGH COURT HELD, THE INTEREST EARNED ON THE SHORT TERM DEPOSITS OF THE MONEY KEPT APART FOR THE PURPOSES OF BUSINESS HAD T O BE TREATED AS INCOME EARNED FROM BUSINESS AND COULD NOT BE TREATED AS IN COME FROM OTHER SOURCES THE HONBLE COORDINATE BENCH ALSO CITED THE CASE OF MYSODET (P) LTD. V/S C1T, REPORTED IN 305 ITR 276 (SC), WHEREIN THE HONBLE A PEX COURT ALLOWED THE CIVIL APPEAL FILED BY THE ASSESSEE. THIS WAS A CASE WHERE THE ASSESSEE DURING THE YEAR PURCHASED SOME COMPUTERS AND EXPORTED THEM AT ITS COST PRICE, AND THERE WAS NO EXPORT INCOME AS SUCH, THE HONBLE APEX COUR T, HELD THAT EVEN THE EXPORT INCENTIVES WOULD BE DEDUCTIBLE UNDER SECTION 8OHHC. THE AR SUBMITTED THAT IN THE CASE OF THE ASSESSEE, THE ASSESSEE HAD EARNED INTEREST INCOME FROM THE MONEY KEPT IN THE BANK FOR AVAILING BANK/CREDIT FACILITIES, WHICH HAVE DIRECT NEXUS WITH THE BUSINESS OF THE ASSESSEE, AND ON FACTS THE CASE IS DISTINGUISHABLE FROM THE RATIO OF THE DECISION IN LIBERTY INDIA. 7. WE SEE NO DISTINGUISHING FEATURE IN THE CASE AT HAND AND THE CASE CITED BY THE AR. THERE HAS BEEN NO DISPUTE BY THE AO THAT TH E INTEREST EARNED BY THE ASSESSEE BEARS A DIFFERENT CHARACTER AND AT NO POIN T IT HAS BEEN DISPUTED THAT THE FUNDS PARKED WITH THE BANK TO AVAIL CREDIT FACI LITIES ARE FOR THE PURPOSES OF BUSINESS. WE ARE, THEREFORE, INCLINED TO ALLOW THE GROUND OF APPEAL AND HOLD ITA NO.1118/MUM/2009(A.Y. 2005-06) ITA NO.1344/MUM/2009(A.Y. 2005-06) 5 THAT THE INTEREST INCOME BEARS THE CHARACTER OF THE PROFITS OF THE BUSINESS OF THE ASSESSEE AND DIRECT THE AO TO INCLUDE THE INTEREST INCOME IN THE PROFITS OF THE ASSESSEE FROM BUSINESS AND COMPUTE THE QUANTUM OF E XEMPTION AS PER LAW. 3. IN THESE CIRCUMSTANCES, AFTER HEARING BOTH THE P ARTIES, RESPECTFULLY FOLLOWING THE AFOREMENTIONED ORDER OF THE CO-ORDINATE BENCH I N ASSESSEES OWN CASE WE DECIDE THIS GROUND AS HAS BEEN DECIDED FOR A.Y 2003 -04. ACCORDINGLY, WE DIRECT THE AO TO INCLUDE THE INTEREST INCOME IN THE PROFIT OF THE ASSESSEE FROM BUSINESS AND COMPUTE THE QUANTUM OF EXEMPTION AS PER LAW. G ROUND NO.1 IS ALLOWED IN THE MANNER AFORESAID. 4. SO FAR AS IT RELATE TO GROUND NO.2 & 3 OF ASSESS EES APPEAL AND GROUND NO.2 OF DEPARTMENTAL APPEAL, THE FACTS ARE THAT THE AO H AS INVOKED PROVISIONS OF SECTION 43B TO MAKE THE FOLLOWING TWO DISALLOWANCES: EMPLOYEES CONTRIBUTION OF ESIC: PARTICULARS AMOUNT (RS.) DUE DATE DATE OF PAYMENT. JUNE,2004 26,315 21.7.2004 27.07.2004 JULY, 2004 39,829 21.08.2004 27.08.2004 OCTOBER,2004 40,329 21.11.2004 23.11.2004 NOVEMBER,2004 43,224 21.12.2004 28.12.2004 DECEMBER,2004 34,165 21.01.2005 22.01.2005 TOTAL 183,862 EMPLOYEES CONTRIBUTION OF PROVIDENT FUND: PARTICULARS AMOUNT (RS) DUE DATE DATE OF PAYMENT MAY,2004 187,840 15.06.2004 16.06.2004 JULY, 2004 217,069 15.08.2004 17.08.2004 SEPTEMBER,2004 190,036 15.10.2004 16.10.2004 OCTOBER,2004 193,555 15.11.2004 17.11.2004 DECEMBER,2004 205,950 15.01.2005 17.01.2005 FEBRUARY,2005 196,526 15.03.2005 16.03.2005 MARCH, 2005 204,101 15.04.2005 21.04.2005 TOTAL 13,95,077 5. LD. CIT(A) HAS DELETED THE ADDITION WITH REGARD TO DEPOSITS WHICH ARE WITHIN THE GRACE PERIOD AND HAS SUSTAINED THE DISALLOWANCE S TO A SUM OF RS.2,04,101/- OUT OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUN D AND A SUM OF RS. 1,09,368/- OUT OF EMPLOYEES CONTRIBUTIONS ESIC. THE ASSESSEE IS IN APPEAL WITH REGARD TO SUSTAINED DISALLOWANCES AND THE DEPARTMENT IS IN AP PEAL WITH REGARD TO DELETED ITA NO.1118/MUM/2009(A.Y. 2005-06) ITA NO.1344/MUM/2009(A.Y. 2005-06) 6 DISALLOWANCES. IT IS NOT DISPUTED BY ANY OF THE PA RTIES THAT ALL THE DEPOSITS HAVE BEEN MADE BEFORE THE DUE DATE OF FILING THE RETURN , WHICH IN THE PRESENT CASE IS 31/10/2005. 6. IN THIS VIEW OF THE FACTUAL ASPECT, AFTER HEARIN G BOTH THE PARTIES, WE ARE OF THE OPINION THAT SUSTAINED DISALLOWANCE CANNOT BE UPHEL D AS PER THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS ALOM EXTRUSIONS LTD, [2009]319 ITR 306(SC), WHEREIN IT IS HELD THAT IF THE PAYMENTS A RE MADE BEFORE THE DUE DATE OF FILING THE RETURN, DISALLOWANCE CANNOT BE MADE. RE SPECTFULLY FOLLOWING THE SAME WE DELETE THE DISALLOWANCES SUSTAINED BY LD. CIT(A) AN D GROUND NO.2 & 3 OF THE ASSESSEES APPEAL ARE ALLOWED. SO FAR AS IT RELATES TO GRIEVANCE OF REVENUE EXPR ESSED IN ITS GROUND NO.2, IT HAS ALREADY BEEN MENTIONED THAT NONE OF THE PAYMENT IS BEYOND THE DUE DATE OF FILING THE RETURN, THEREFORE, WE SEE NO INFIRMITY IN THE ORDER PASSED BY LD. CIT(A) VIDE WHICH THE PAYMENTS MADE BY THE ASSESSEE WITHIN GRAC E PERIOD HAVE BEEN HELD TO BE ALLOWABLE. WE DISMISS GROUND NO.2 OF THE REVEN UES APPEAL. 7. GROUND NO.4 OF ASSESSEES APPEAL IS AN ALTERNAT IVE GROUND RAISED BY THE ASSESSEE. IT IS THE CASE OF THE ASSESSEE THAT IN A CASE IF THE DISALLOWANCE MADE BY THE AO WITH RESPECT TO DELAYED PAYMENT OF PF AND ES IC ARE UPHELD THEN EXEMPTION UNDER SECTION 10A OF THE ACT SHOULD BE GRANTED ON T HE SAID DISALLOWANCES. SINCE WE HAVE HELD THAT DISALLOWANCE WITH REGARD TO DELAY ED PAYMENTS OF PF AND ESIC CANNOT BE MADE, THIS GROUND DOES NOT SURVIVE FOR AD JUDICATION. ACCORDINGLY THIS GROUND IS DISMISSED. 8. NOW COMING TO GROUND NO.1 RAISED BY THE REVENUE , IT WAS SUBMITTED BY LD. A.R THAT THIS GROUND IS COVERED IN FAVOUR OF THE AS SESSEE BY THE AFOREMENTIONED DECISION OF THE TRIBUNAL FOR A.Y. 2003-04, WHEREIN THIS ISSUE HAS BEEN DISCUSSED AND DECIDED IN FAVOUR OF THE ASSESSEE WITH THE FOLL OWING OBSERVATIONS: ITA NO.1118/MUM/2009(A.Y. 2005-06) ITA NO.1344/MUM/2009(A.Y. 2005-06) 7 27. THE ONLY GROUND RAISED BY THE REVENUE IS AGAIN ST THE DECISION OF THE CIT(A), WHEREIN THE C1T(A) HAD ALLOWED TO INCLUDE I NCOME FROM JOB WORK, AT RS. 14,87,872 FOR THE PURPOSES OF COMPUTING THE EXE MPTION UNDER SECTION 10A. 28. THE CIT(A) HAD OBSERVED THAT JOB WORK ACTIVITY UNDERTAKEN BY THE ASSESSEE WOULD FORM THE BUSINESS ACTIVITY AND HE, ACCORDINGL Y, DIRECTED THE AO TO RECOMPUTE THE EXEMPTION UNDER SECTION 1OA. 29. THE DR, SUBMITTED THAT SINCE JOB WORK PER SE DO ES NOT FORM PART OF THE EXPORT BUSINESS OF THE ASSESSEE, THEREFORE, THE INC OME FROM JOB WORK ACTIVITY SHOULD BE EXCLUDED FROM THE TURNOVER, THEREBY EXCLU DED FROM THE FORMULA FOR THE COMPUTATION OF EXEMPTION UNDER SECTION 10A 30. THE AR, APPEARING ON BEHALF OF THE ASSESSEE, SU BMITTED THAT THE UNIT OF THE ASSESSEE IS WITHIN THE SEZ. BESIDES THE ASSESSEE CO MPANY HAVING ITS OWN PRODUCTION, IT RECEIVES JOB CHARGES PRIMARILY FROM THE UNITS WITHIN THE SEZ FOR DOING SOME JOB WORK FOR OTHER UNITS. THE AR POINTED OUT TO THE OBSERVATION MADE BY THE CIT(A) IN HIS ORDER IN DECISION PART, W HEREIN, THE CIT(A) OBSERVES, I DO NOT SEE HOW THE AO WOULD BE JUSTIFIED IN HOLD ING THAT SUCH RECEIPTS ON ACCOUNT /OB WORK CHARGES PERTAINING TO THE MANUFAC TURE OF DIAMOND AND PLATINUM STUDDED JEWELLERY WOULD NOT BE PROFITS OF THE BUSINESS OF THE ASSESSEE THE AR SUBMITTED THAT JOB WORK IS A PART AND PARCEL OF THE BUSINESS ACTIVITY OF THE ASSESSEE AND SHOULD BE INCLUDED IN THE TOTAL TURNOVER FOR THE PURPOSES OF THE COMPUTATION OF EXEMPTION. THE AR SU BMITTED A COPY OF THE DECISION OF COORDINATE BENCH OF ITAT AT MUMBAI, IN THE CASE OF TROPICATE TEXTILES PVT. LTD. V/S DCIT, ITA NO. 1827/MUM/2006 AND 1TA NO. 2544/MUM/2006, THE HONBLE BENCH HAD DISMISSED THE APPEAL OF THE DEPARTMENT (PARA 29 OF THE ORDER), RELYING ON THE D ECISION OF JEWELTEX Z INTERNATIONAL PVT. LTD. (SUPRA). 31. WE HAVE PERUSED THE FACTS OF THE CASE AND WE TO TALLY AGREE WITH THE OBSERVATIONS OF THE CIT(A) THAT JOB WORK ACTIVITY I S A PART AND PARCEL OF THE BUSINESS OF THE ASSESSEE. IN THE BUSINESS CONDUCTED BY THE ASSESSEE, ONCE A RECEIPT GETS IDENTIFIED AND TAKES THE CHARACTER OF A BUSINESS ACTIVITY, THE PROVISIONS OF SECTION 1OA SHALL AUTOMATICALLY TAKE ITS OWN COURSE FOR THE COMPUTATION OF EXEMPTION AND ALLOWANCE THEREOF. RES PECTFULLY FOLLOWING THE FINDINGS OF THE HONBLE COORDINATE BENCH IN THE CAS E OF JEWELTEX INTERNATIONAL PVT. LTD. (SUPRA) DIRECTLY ON THE IMPUGNED ISSUE, W E DO NOT FIND ANY REASON TO DISTURB THE FINDINGS OF THE CIT(A) ON THIS ISSUE. W E, THEREFORE, DISMISS THE GROUND TAKEN BY THE REVENUE. 9. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOT H THE PARTIES, RESPECTFULLY FOLLOWING THE AFOREMENTIONED ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE FOUND NO MERIT IN THE GROUND OF APPEAL NO.1 RAISED BY THE REVENUE. THEREFORE, THE SAME IS DISMISSED. ITA NO.1118/MUM/2009(A.Y. 2005-06) ITA NO.1344/MUM/2009(A.Y. 2005-06) 8 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED IN THE MANNER AFORESAID AND APPEAL FILED BY THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 17 TH DAY OF DEC. 2012 SD/- SD/- ( D.KARUNAKARARAO ) (I.P.BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 17 TH DEC. 2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.R I BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM.