The DCIT, Circle-5, Ahmedabad V. Raghuvir Exim Ltd., Ahmedabad

ITA 1268/AHD/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9649 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-04-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 29-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: P M MEHTA WITH SHRI G M THAKOR
• Section: 143(3); 80HHC; 2

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER ITA NO. 1222/AHD/2011 / ASSESSMENT YEAR: 2001-02 RAGHUVIR EXIM PVT LTD, 216, NEW CLOTH MARKET GATE, AHMEDABAD PAN : AAACR 7492 N DCIT, CIRCLE-5, AHMEDABAD ITA NO. 1268/AHD/2011 / ASSESSMENT YEAR: 2001-02 DCIT, CIRCLE-5, AHMEDABAD RAGHUVIR EXIM PVT LTD, AHMEDABAD PAN : AAACR 7492 N / // / (APPELLANT) / // / (RESPONDENT) ASSESSEE(S) BY : SHRI P.M. MEHTA WITH SHRI G.M. THAKOR, AR REVENUE BY : SHRI DINESH SINGH, SR. DR. !' # $%& !' # $%& !' # $%& !' # $%& / DATE OF HEARING : 09/04/2015 '( # $%& / // / DATE OF PRONOUNCEMENT: 17/04/2015 )* )* )* )*/ // / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE A ND THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XI, AHMEDABAD DATED 24.02.2011 FOR ASSESSMENT YEAR 2001 -02. 2. IN THESE CROSS APPEALS, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS:- 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE A PPELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE D ISALLOWANCE FOR ITA NOS. 1222 & 1268/AHD/2011 RAGHUVIR EXIM PVT LTD V. DCIT AY: 2001-02 2 DEDUCTION U/S 80HHC ON DUTY ENTITLEMENT PASS BOOK ( DEPB) INCOME WHEN NO SUCH ACTION IS CALLED FOR. 1.2 WITHOUT PREJUDICE TO ABOVE, THE LEARNED CIT(A) O UGHT TO HAVE APPRECIATED THAT AS PER NEW TAXATION LAWS AMENDMENT ACT, 2005 ONL Y PROFIT ON SALE/TRANSFER OF DEPB LICENSES ARE COVERED U/S 28(I IID) OF THE ACT AND NOT REIMBURSEMENT OF DUTY COMPONENT IN THE DEPB SCHEME. 1.3 WITHOUT PREJUDICE TO ABOVE, THE LEARNED CIT(A) O UGHT TO HAVE APPRECIATED THAT RULES PERTAINING TO DUTY DRAWBACK APPLICABLE F OR THE YEAR UNDER CONSIDERATION DID NOT PRESCRIBE ANY ALLOCATION TOWA RDS CUSTOM DUTY IN CASE OF APPELLANT HENCE COMPUTATION PROVISIONS AS P ER TAXATION LAWS AMENDMENT ACT FAILS IN CASE OF APPELLANT. 3. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL READ AS UNDER:- 1. THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING ASSESSEE'S IN GROUND NO.3 THAT 'HAVING ASS ESSED INCOME AT RS.89,27,214/- AT THE FIRST ASSESSMENT PROCEEDINGS AND (CIT) HAVING GIVEN RELIEF AGAINST THAT ORDER, THE AO CAN NEVER EN HANCE THE ASSESSED INCOME AND AO HAS NO JURISDICTION TO DO SO, HENCE TH E ENHANCEMENT OF INCOME FROM RS.89,27,214/- TO RS.1,05,01,690/- AT T HE TIME OF PASSING ASSESSMENT U/S.143(3) R.W.S.254 GIVING EFFECT TO TH E ORDER OF ITAT IS VOID.' 2. THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO MODIFY THE ASSESSMENT ORDER PAS SED U/S. 143(3) R.W.S.254, BY ALLOWING ASSESSEE'S IN GROUND NO.3 AS ABOVE. 3. THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE IMPUGNED ORDER WAS PASSED TO GIVE EFFECT TO TRIBUNAL'S ORDER, THE TRIBUNAL'S DECISION WAS SPECIFIC, THE IS SUE OF GIVING EFFECT TO FIRST LIMB OF THE PROVISO TO SEC. 80HHC WAS NOT BEF ORE THE TRIBUNAL AND IT IS BEYOND THE MANDATE OF THE TRIBUNAL'S ORDER, WITH OUT APPRECIATING THE FACT THAT THE INCOME ENHANCED IS ON ACCOUNT OF THE CONSEQUENTIAL EFFECT OF RE-WORKING OF ALLOWABLE DEDUCTION U/S.80HHC. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 5. IT IS , THEREFORE , PRAYED THAT THE ORDER OF TH E LD. COMMISSIONER OF INCOME TAX (A) MAY BE SET-ASIDE AND THAT OF THE ASSESSING O FFICER BE RESTORED. ITA NOS. 1222 & 1268/AHD/2011 RAGHUVIR EXIM PVT LTD V. DCIT AY: 2001-02 3 4. THE FACTS OF THE CASE ARE THAT THE ORIGINAL ASSE SSMENT WAS COMPLETED U/S 143(3) ON 26.03.2004 AT THE TOTAL INCOME OF RS. 89,27,214/-. THE ABOVE INCOME WAS DETERMINED AFTER ALLOWING DEDUCTION U/S 80HHC AMOUNTING TO RS.51,63,378/-. WHILE COMPUTING THE DEDUCTION U/S 80HHC, THE ASSESSING OFFICER HAS EXCLUDED THE DEPB CREDIT. ON APPEAL, TH E CIT(A) DIRECTED THE ASSESSING OFFICER TO GRANT DEDUCTION U/S 80HHC WITH REFERENCE TO DEPB INCENTIVE AS CLAIMED BY THE ASSESSEE. AGAINST THE O RDER OF THE LD.CIT(A), THE REVENUE WAS IN APPEAL WHEREIN THE ITAT SET ASIDE TH E MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE FOLLOWING DI RECTIONS:- FOR THIS ISSUE, WE FIND THAT NEITHER OF THE AUTHOR ITIES BELOW HAS CONSIDERED THE AMENDMENT BROUGHT OUT IN SECTION 28(IIIA) AS INS ERTED BY THE TAXATION LAWS AMENDMENT ACT, 2005 W.R.E.F. 1-4-1998 CONSEQUENT TO WHICH THE INCOME FROM DEPB LICENSE WAS TO BE CONSIDERED UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION AND CONSEQUENTLY TH E SECOND PROVISO TO SUB- SECTION 3 OF SECTION 80HHC AS INSERTED BY THE TAXAT ION LAWS AMENDMENT ACT, 2005 W.R.E.F. 1-4-1998. WE FIND THAT BOTH THE PARTIES AGREED THAT THIS ISSUE REQUIRES RECONSIDERATION BY THE ASSESSING OFFI CER IN VIEW OF THE ABOVE MENTIONED PROVISIONS. ACCORDINGLY, WE SET ASIDE THI S ISSUE OF THE REVENUES APPEAL AND CROSS OBJECTION OF THE ASSESSEE TO CONSI DER THIS ISSUE IN THE LIGHT OF AMENDED PROVISIONS AS BROUGHT OUT IN THE STATUTE . ACCORDINGLY, THIS APPEAL OF THE REVENUE AND THE CO OF THE ASSESSEE AR E ALLOWED FOR STATISTICAL PURPOSES. 5. WHILE GIVING EFFECT TO THE ORDER OF THE ITAT, TH E ASSESSING OFFICER AGAIN HELD THAT THE ASSESSEE IS NOT ENTITLED TO DED UCTION U/S 80HHC ON DEPB LICENSE. HOWEVER, HE FURTHER REDUCED THE DEDUC TION U/S 80HHC WHICH WAS ORIGINALLY ALLOWED ON THE GROUND THAT AT THE TIME OF ORIGINAL ASSESSMENT THE LOSS UNDER THE FIRST LIMB OF THE PRO VISO TO SECTION 80HHC HAS NOT BEEN CONSIDERED. ACCORDINGLY, THE ASSESSING OF FICER ALLOWED DEDUCTION U/S 80HHC AT RS.35,88,903/- AS AGAINST THE DEDUCTIO N ORIGINALLY ALLOWED AT RS.51,63,317/-. THE ASSESSEE, AGGRIEVED WITH THE O RDER OF THE ASSESSING OFFICER, FILED APPEAL BEFORE THE CIT(A) WHO AGREED WITH THE ASSESSEE THAT THE ITA NOS. 1222 & 1268/AHD/2011 RAGHUVIR EXIM PVT LTD V. DCIT AY: 2001-02 4 ASSESSING OFFICER WHILE GIVING EFFECT TO THE ORDER OF THE TRIBUNAL COULD NOT HAVE CONSIDERED THE LOSS AS PER FIRST LIMB OF THE P ROVISO TO SECTION 80HHC. THE RELEVANT FINDING OF THE LD. CIT(A) READS AS UND ER:- 5.2 THE CONTENTIONS OF THE LEARNED A.R. ARE TENAB LE. THE IMPUGNED ORDER WAS PASSED TO GIVE EFFECT TO TRIBUNALS ORDER. TRIB UNALS DIRECTIONS WERE SPECIFIC. THE ISSUE OF GIVING EFFECT TO THE FIRST L IMB OF THE PROVISO TO SEC. 80HHC WAS NOT BEFORE THE TRIBUNAL AND IT IS BEYOND THE MANDATE OF THE TRIBUNALS ORDER. BOTH THE DECISIONS RELIED ON BY T HE A.R. ARE APPLICABLE TO THE FACTS OF THE CASE. THIS GROUND OF APPEAL IS ALL OWED. A.O. ID DIRECTED TO MODIFY THE IMPUGNED ORDER ACCORDINGLY. 6. THE REVENUE, AGGRIEVED WITH THE ABOVE FINDINGS O F THE LD. CIT(A), IS IN APPEAL BEFORE US. 7. SO FAR AS THE CONSIDERATION OF DEPB LICENSE FOR THE PURPOSE OF 80HHC IS CONCERNED, THE LD. CIT(A) DID NOT ALLOW ANY RELI EF TO THE ASSESSEE. HENCE, THE ASSESSEES APPEAL. 8. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. FROM THE ORD ER OF THE ITAT, RELEVANT PORTION WHICH HAS ALREADY BEEN REPRODUCED BY US ABO VE, IT IS EVIDENT THAT THE ITAT HAS SET ASIDE ONLY ONE ISSUE TO THE FILE O F THE ASSESSING OFFICER - THAT WAS FOR CONSIDERATION OF DEPB LICENSE FOR THE PURPOSE OF 80HHC. IT HAS NOT SET ASIDE THE ASSESSMENT ORDER IN GENERAL. THE REFORE, THE JURISDICTION OF THE ASSESSING OFFICER WHILE GIVING EFFECT TO THE OR DER OF THE ITAT WAS LIMITED TO THE ISSUE SET ASIDE BY THE ITAT. WE, THE REFORE, AGREE WITH THE LD. CIT(A) THAT THE ADJUSTMENT OF LOSS AS PER FIRST LIM B OF PROVISO TO SECTION 80HHC, WHILE GIVING EFFECT TO THE ORDER OF THE ITAT , WAS BEYOND THE ITA NOS. 1222 & 1268/AHD/2011 RAGHUVIR EXIM PVT LTD V. DCIT AY: 2001-02 5 MANDATE OF THE TRIBUNALS ORDER. ACCORDINGLY, THE R EVENUES APPEAL IS DISMISSED. 9. SO FAR AS THE ASSESSEES APPEAL IS CONCERNED, WE FIND THAT NOW THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE APEX COURT IN THE CASE OF TOPMAN EXPORTS V. CIT, REPORTED IN (2012) 342 ITR 49 (SC) [BCAJ]. WE, THEREFORE, DIRE CT THE ASSESSING OFFICER TO ALLOW THE DEDUCTION U/S 80HHC IN THE LIGHT OF ABOVE DECISION OF THE HONBLE APEX COURT IN THE CASE OF TOPMAN EXPORTS (S UPRA). 10. IN THE RESULT, REVENUES APPEAL IS DISMISSED WH ILE THE ASSESSEES APPEAL IS ALLOWED PRO TANTO. ORDER PRONOUNCED IN THE COURT ON 17 TH APRIL, 2015 AT AHMEDABAD. SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 17/04/2015 BIJU T., PS )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. -- $ !. / CONCERNED CIT 4. !. ( ) / THE CIT(A) - X I, AHMEDABAD 5. +12 $ , , / DR, ITAT, AHMEDABAD 6. 23 4' / GUARD FILE . )*! )*! )*! )*! / BY ORDER, TRUE COPY 5 55 5/ // / -6 -6 -6 -6 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD