Balajee Exports, CHENNAI V. ITO, CHENNAI

ITA 1165/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8243 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 31-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 18-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANURAG SAHAY
• Assessee Lawyers: A S SRIRAMAN
• Section: 143(3); 80HHC; 10B; 263; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' $ , % ' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NOS.1164 & 1165/MDS/2015 ( / ASSESSMENT YEARS: 2008-09 & 2009-10) M/S.BALAJEE EXPORTS, 87, DR.RADHAKRISHNAN ROAD, MYLAPORE, CHENNAI-600 004. VS THE INCOME TAX OFFICER, BUSINESS WARD-I(1), CHENNAI. PAN: AADFB1111E ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.A.S.SRIRAMAN, ADVOCATE /RESPONDENT BY : MR.ANURAG SAHAY, CIT /DATE OF HEARING : 31 ST DECEMBER, 2015 /DATE OF PRONOUNCEMENT : 6 TH JANUARY, 2016 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AGAIN ST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEA LS)-2, CHENNAI DATED 28.01.2015 FOR THE ASSESSMENT YEARS 2008- 09 & 2009-10. THE ONLY ISSUE IN BOTH THESE APPEALS OF THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME TAX (AP PEALS) ERRED IN PARTLY SUSTAINING THE COMPUTATION OF DEDUC TION UNDER SECTION 10B OF THE ACT AND THE COMMISSIONER OF INCO ME TAX (APPEALS) FAILED TO APPRECIATE THAT EXCLUSION OF E NTIRE VALUE OF UNREALIZED BILL AMOUNTS WAS WRONG, ERRONEOUS AND UNJUSTIFIED. 2 ITA NO.1164 & 1165/MDS/2015 2. BRIEF FACTS ARE THAT ASSESSEE FILED RETURN OF IN COME FOR BOTH THE ASSESSMENT YEARS CLAIMING DEDUCTION UNDER SECTION 10B OF THE ACT AS 100% EXPORT ORIENTED UNIT. WHILE COMPUTING THE EXEMPTION UNDER SECTION 10B OF THE ACT, THE ASS ESSEE INCLUDED UNREALIZED BILL AMOUNT BOTH IN EXPORT AND TOTAL TURNOVER. THE COMMISSIONER OF INCOME TAX PASSED ORD ER UNDER SECTION 263 OF THE ACT DIRECTING THE ASSESSIN G OFFICER TO PASS FRESH ASSESSMENT ORDER DISALLOWING THE UNRE ALIZED BILL AMOUNT AND ARRIVE AT EXEMPTION ALLOWABLE UNDER SECT ION 10B. GIVING EFFECT TO THE ORDER OF THE COMMISSIONER OF I NCOME TAX, THE ASSESSING OFFICER EXCLUDED UNREALIZED BILL AMOU NT, EXPORT TURNOVER AND COMPUTED THE EXEMPTION ALLOWABLE UNDER SECTION 10B OF THE ACT. THE ASSESSEE PREFERRED APPE AL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). AS THE TH INGS STOOD THUS, THE ASSESSEE ALSO PREFERRED APPEAL AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX PASSED UNDE R SECTION 263 OF THE ACT AND THE TRIBUNAL BY ORDER DA TED 10.07.2013 SUSTAINED THE ORDER OF THE COMMISSIONER OF INCOME TAX PASSED UNDER SECTION 263 AND ALSO FURTHE R HELD THAT ASSESSING OFFICER SHALL CALL FOR DETAILS FROM THE ASSESSEE AND HE SHALL RESTRICT THE BENEFIT OF SECTION 10B TO THE EXTENT OF 3 ITA NO.1164 & 1165/MDS/2015 REALIZED BILL AMOUNT. THE COMMISSIONER OF INCOME TA X (APPEALS) TAKING NOTE OF THE DECISION OF THIS TRIBU NAL AND ALSO THE FACT THAT ASSESSEE HAD REALIZED CERTAIN AMOUNTS WITHIN THE EXTENDED PERIOD OF SIX MONTHS AS PROVIDED BY TH E RESERVE BANK OF INDIA DIRECTED THE ASSESSING OFFIC ER TO EXCLUDE ONLY UNREALIZED BILL AMOUNTS WHILE WORKING OUT DEDUCTION UNDER SECTION 10B OF THE ACT. 3. COUNSEL FOR THE ASSESSEE BEFORE US SUBMITS THAT THE ASSESSING OFFICER DISALLOWED THE ENTIRE UNREALIZED BILL AMOUNTS FROM THE EXPORT TURNOVER AND SUCH UNREALIZE D PORTION SHOULD ALSO BE EXCLUDED FROM THE TOTAL TURN OVER ON THE CONSIDERATION OF THEORY OF PARITY. 4. DEPARTMENTAL REPRESENTATIVE PLACING RELIANCE ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF M/S. GALAXY GRANITES LTD. (27 TAXMANN 31) SUBMITS THAT UNREALIZED EXPORT PROCEEDS SHOULD NOT BE EXCLUDED F ROM EXPORT TURNOVER AS HELD BY THE JURISDICTIONAL HIGH COURT. 4 ITA NO.1164 & 1165/MDS/2015 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE DECISIONS RELIED ON. THIS ASPECT OF THE MAT TER HAS BEEN CONSIDERED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ELABORATELY HOLDING AS UNDER:- 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AND THE SUBMISSIONS OF THE ID.AR. IT IS GATHERED FROM THE F ACTS OF THE CASE THAT DURING THE FINANCIAL YEAR RELEVANT TO ASS ESSMENT YEAR 08-09, THE APPELLANT HAS NOT REALIZED AN AMOUN T OF RS.12,37,975 TILL THE EXTENDED PERIOD OF FIRST SIX MONTHS AVAILABLE TO IT. ON A REFERENCE MADE TO CIT-IV, CHE NNAI, THE CIT IN HIS ORDER U/S 263 AS DIRECTED THE AO TO REDU CE THE UNREALIZED EXPORT BILL WHILE WORKING OUT BENEFIT U/ S 10B. THE APPELLANT HAS FILED THE PRESENT APPEAL BEFORE ME ON THE ORDER PASSED BY THE AO U/S 143(3) R.W.S.263. IT IS SEEN T HAT THE APPELLANT HAS WENT ON APPEAL BEFORE THE I TAT, CHEN NAI AGAINST THE ORDER PASSED BY CIT U/S 263 FOR AYS 08- 09 & 09- 10. WHILE DISMISSING THE APPEALS FILED BY THE ASSES SEE, THE ITAT VIDE ITS ORDER IN ITA NOS.1 058 & 1059/MDS/2013 FOR A.Y. S 08-09 & 09-10 DATED 10.7.2013 HAS HELD AS UNDER: '6. IN THESE CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO INTERFERE IN THE REVISION ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX. THE ASSESSING OFFICER SHALL CALL FOR THE DETAILS FROM THE ASSESSE E AND HE SHALL RESTRICT THE BENEFIT OF SEC. 10B TO TH E EXTENT OF 'REALIZED BILL AMOUNTS'. A PLAIN READING OF THE ABOVE DECISION SHOWS THAT WHILE WORKING OUT THE BENEFIT AVAILABLE TO THE APPELLANT U/S 10B, THE UNREALIZED BILL AMOUNTS HAVE TO BE REDUCED FROM THE EXPORT TURNOVER OF THE APPELLANT. 4.2.1 THE LD. A.R. HAS BROUGHT TO MY NOTICE DURING THE COURSE OF APPELLATE PROCEEDINGS THAT THE APPELLANT COULD REALIZE AN AMOUNT OF RS 4 .36 LAKHS DURING THE EXTENDED PERIOD OF NEXT SIX MONTHS AS PER THE APPROVAL GIVEN BY THE RBI AND THE APPELLANT HAS FILED RECTIFICATION U /S 154 BEFORE THE AO WHICH IS PENDING ADJUDICATION. THE ID .AR 5 ITA NO.1164 & 1165/MDS/2015 HAS FILED A COPY OF 154 APPLICATION FILED BEFORE TH E AO. THE AO IS DIRECTED TO ENTERTAIN THE RECTIFICATION APPLICATICT5'T~MD EXAMINE THE CLAIM. IF THE APPELLA NT HAS ALREADY GOT THE PERMISSION FOR RS.4. 36 LAKHS IN THE EXTENDED PERIOD OF SIX MONTHS, THE DISALLOWANCE TO BE MADE NOW IS ONLY RS.8.01 LAKHS (RS.12.37 RS 4 .36). THE AO SHOULD REDUCE ONLY THIS AMOUNT FROM EXPORT TURNOVER.WHILE WORKING OUT DEDUCTION ULS 10B. 4.2.2:- THE .LD.AR HAS ALSO ARGUED BEFORE ME IN AN ALTERNATE GROUND THAT THE DISALLOWANCE SHOULD BE PROPORTIONATE TO THE BUSINESS PROFITS EARNED BY THE APPELLANT DURING THE YEAR. IN SUPPORT OF WHICH HE H AS RELIED ON THE DECISIONS OF ITAT, DELHI AND MADRAS H IGH COURT MENTIONED ABOVE. I HAVE GONE THROUGH THE DECISIONS. THE ISSUES DEALT IN THOSE CASES ARE DIFF ERENT AND THEY HAVE NOT DIRECTED TO TAKE THE UNREALIZED B ILL AMOUNTS TO THE PROPORTION OF THE PROFITS OF THE APP ELLANT. I, THEREFORE, HOLD THAT THE DECISIONS RELIED ON BY THE ID, AR ARE NOT OF MUCH HELP TO HIM. 6. THIS VIEW OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS INCONFORMITY WITH THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF GALAXY GRANITES P.LTD. (S UPRA), WHEREIN IT WAS HELD THAT UNREALIZED SALE PROCEEDS S HOULD BE INCLUDED IN TOTAL TURNOVER FOR THE PURPOSE OF COMPU TATION OF DEDUCTION UNDER SECTION 80HHC OF THE ACT. THE RATIO OF THE SAID DECISION OF THE JURISDICTIONAL HIGH COURT IS S QUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. THUS, WE REJECT THE GROUNDS RAISED BY THE ASSESSEE AND AFFIRM THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS IS SUE. 6 ITA NO.1164 & 1165/MDS/2015 7. IN THE RESULT, BOTH THESE APPEALS OF THE ASSESSE E ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JANUARY, 2016. SD/- SD/- ( # ) ( & (# ) ( CHANDRA POOJARI ) ( CHALLA NAG ENDRA PRASAD ) * / ACCOUNTANT MEMBER ( * / JUDICIAL MEMBER ( /CHENNAI, , /DATED 6 TH JANUARY, 2016 SOMU ./ 0/ /COPY TO: 1. APPELLANT 2.RESPONDENT 3. 1 () /CIT(A) 4. 1 /CIT 5. / 5 /DR 6. /GF .