Shri Hanwant Khatri Prop. M/s. Arvind Expo Crafts, JODHPUR V. ITO, JODHPUR

ITA 114/JODH/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3061 (ITAT-JODHPUR)
• Duration Of Justice: 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 04-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SEHGAL
• Assessee Lawyers: U C JAIN SHRI RAJENDRA JAIN
• Keywords: Business income; Rule of consistency
• Section: 234B

Judgement Text

1 IN THE INCOME TAX APPELALTE TRIBUNAL: JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 114/JODH/2013 (A. Y. 2009-10) SHRI HANWANT KHATRI VS. INCOME-TAX OFFICER P/O M/S ARVIND EXPO CRAFTS WARD 1(1) F-707, MIA, IIND PHASE JODHPUR BASIN, JODHPUR PAN NO. : ACTPK 2218 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI U.C. JAIN SHRI RAJENDRA JAIN DEPARTMENT BY : SHRI DEEPAK SEHGAL DATE OF HEARING : 21/03/2013. DATE OF PRONOUNCEMENT : 04/04/2013. PER HARI OM MARATHA, J.M:- THIS APPEAL OF THE ASSESSEE FOR A.Y. 2009-10 IS DIR ECTED AGAINST THE ORDER OF THE LD. CIT(A), JODHPUR DATED 31.01.2 013. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE MANUFACTURES AND EXPORTS HANDICRAFT ARTICLES AND TH INGS MAINLY MADE OF WOOD. HE FILED RETURN OF INCOME [ROI] FOR A.Y. 2009-10 ON 30.9.2009 DECLARING TOTAL INCOME OF RS. 3,52,370/-. THE ASSESSEE IS 2 PROPRIETOR OF M/S ARVIND EXPO CRAFTS, JODHPUR. DUR ING THIS YEAR, THE ASSESSEE HAS DISCLOSED TOTAL SALES OF RS. 5,98,61,8 74/- GIVING GROSS PROFIT RATE OF 28.20% AS COMPARED TO LAST YEARS SA LES OF RS. 9,77,21,908/-GIVING GROSS PROFIT RATE OF 23.33%. T HE ASSESSEE HAS CLAIMED EXEMPTION U/S 10BA AT RS. 86,30,572/- IN RE SPECT OF HANDICRAFT ARTICLES CLAIMED TO BE MANUFACTURED AND EXPORTED BY HIM. ACCORDING TO THE ASSESSEE, HE FULFILLED ALL THE CON DITIONS PRESCRIBED U/S 10BA OF THE ACT AND THEREFORE, IS ELIGIBLE FOR EXEM PTION PROVIDED IN THIS SECTION. BUT THE A.O. WAS NOT AGREEABLE AND, THEREFORE, DISALLOWED THE CLAIM OF DEDUCTION U/S 10BA OF THE A CT AND ADDED BACK THE AMOUNT OF RS. 86,30,572/-. BEING AGGRIEVED, TH E ASSESSEE PREFERRED FIRST APPEAL AND THE LD. CIT(A) HAS PARTL Y ALLOWED BUT HAS CONFIRMED THE DISALLOWANCE MADE U/S 10BA OF THE ACT . THE ASSESSEE IS FURTHER AGGRIEVED AND HAS FILED THIS APPEAL, 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, WHICH ARE M AINLY REITERATION OF SUBMISSIONS MADE BEFORE THE LOWER AU THORITIES AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. WE HAVE FOUND THE ISSUE UNDER CONSIDERATION IS BY NOW SETTLED AND IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISIONS INCLUDI NG THE DECISION OF THIS BENCH IN THE CASE OF SURAJ EXPORTS INDIA AND O THERS IN ITA NO. 3 336/JU/2011 FOR A.Y. 2008-09 WHEREIN IT HAS BEEN HE LD THAT THE MANUFACTURING ACTIVITIES OF THE ASSESSEE ARE ELIGIB LE FOR DEDUCTION PROVIDED U/S 10BA OF THE ACT. ACCORDINGLY, RESPECTF ULLY FOLLOWING THE DECISION IN THE AFOREMENTIONED CASE, WE ALLOW GROUN D NOS. 1 AND 2 OF THE ASSESSEE. 4. IN RESPECT OF GROUND NOS. 3 AND 4, IT WAS ARGUED BY THE LD. A.R. SHRI U.C. JAIN THAT THE A.O. HAS BEEN ALLOWING SIMI LAR CLAIM IN EARLIER YEARS RIGHT FROM A.Y. 2005-06 ONWARDS AND THERE IS NO CHANGE EITHER IN THE PROVISION OF LAW OR IN THE FACTS OF THE CASE OF THE ASSESSEE AND THEREFORE, DEVIATING FROM THE RULE OF CONSISTENCY, THAT TOO, WITHOUT ANY REASON OR RHYME AMOUNTS TO MISUSE OF POWER AND FOR SUFFERINGS UNDERGONE WHICH ATTRIBUTE TO WRONG ACTION OF THE AU THORITY FOR WHICH THE ASSESSEE DESERVES PROPER CONVINCING AND REQUISI TE AWARD OF COST OF APPEAL INCLUDING THE ADVOCATE FEES AND OTHER INCIDE NTAL CHARGES BORNE BY THE ASSESSEE HAS BEEN PRAYED FOR. 5. THE ABOVE CONTENTION OF THE LD. A.R. HAS BEEN RE PELLED HEAVILY BY THE LD. D.R. BY STATING THAT THERE IS NO WILLFUL OR MALAFIDE ACTION TAKEN BY THE DEPARTMENT AGAINST THE ASSESSEE BECAUSE EACH A.Y. IS SEPARATE AND INDEPENDENT. THE A.O. HAS EVERY RIGHT TO DEVIA TE IN CASE HE FINDS 4 FACTS DISTINGUISHABLE AND IN ANY OTHER CASE, THERE IS NO REASON WHEREBY ANY COST AS CLAIMED FOR ON BEHALF OF THE ASSESSEE C AN BE IMPOSED BY THE REVENUE. 6. AFTER CONSIDERING THE RIVAL STANDS, WE HAVE FOUN D THAT THIS CASE OF NOT FOLLOWING THE PRINCIPLE OF CONSISTENCY AND RULE OF STARE DECISIS. IN CASE THE ASSESSEE REVENUE WANTS TO TREAT EACH AND E VERY A.Y. DIFFERENTLY, THERE HAS TO BE SOME REASON FOR DOING SO. OTHERWISE, TAX PAYER WILL NOT KNOW WITH CERTAINTY AND CERTITUDE AS TO WHAT TAX HE IS BOUND TO PAY. THIS SITUATION CREATES SUSPICION AND MISTRUST BETWEEN THE TAX-PAYER AND THE TAXMAN. TO AVOID SUCH SCENARIO, THE REVENUE SHOULD BE MORE VIGILANT AND ALERT AND WHENEVER SUCH ISSUES ARE RAISED, THEY MUST DEFINITELY DECIDE IN SO MANY WORDS AND GIVE RE ASONS AS TO WHY SUCH A DEVIATION HAS BEEN MADE FROM THE REGULAR STAND TA KEN BY IT DESPITE THE FACTS IN BOTH THE YEARS REMAINED SAME AND SIMILAR A ND THERE IS ALSO NO CHANGE IN LAW IN BETWEEN. WITH THAT OBSERVATION, W E DISMISS GROUND NO. 4 OF THIS APPEAL. SINCE GROUND NO. 3 ALSO GOES ALONGWITH GROUNDS NOS. 1 AND 2, AND IS MORE IN THE NATURE OF AN ARGUM ENT, ITS DECISION HAS TO BE ALONGWITH THESE GROUNDS AND HAS TO BE ALLOWED . 5 7. GROUND NO. 5 RELATES TO CHARGING OF INTEREST U/S 234B AND 234C. CHARGING OF INTEREST UNDER THESE SECTIONS IS MANDAT ORY BUT ADMITS CONSEQUENTIAL RELIEF PROVIDED IN THE PROCEEDINGS. WITH THIS OBSERVATION, WE DISMISS GROUND NO. 5 AS WE CANNOT DIRECT THE REV ENUE TO NOT CHARGE IF IT IS CHARGEABLE. 8. GROUNDS NOS. 6 AND 7 ARE FORMAL IN NATURE AND NE ED NO ADJUDICATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH APRIL 2013. SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 4 TH APRIL, 2013. VL/ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR