ACIT, CHENNAI V. M/s. Rajkumar Exports Ltd., CHENNAI

ITA 1271/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52202 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-12-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 07-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed to accrue or arise in india
• Section: 40A(3); 43D; 80IA

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI A BENCH, CHENNAI. BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER & SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1271/MDS/2011 ASSESSMENT YEAR: 2003-04 THE ASSISTANT COMMISSIONER OF INCOME TAX,COMPANY CIRCLE V(3), FOURTH FLOOR, MAIN BUILDING, 121 N.H. ROAD, NUNGAMBAKKAM, CHENNAI 34. VS. M/S. RAJKUMAR EXPORTS LTD., BLOCK NO.603, KESAV DUGAR APARTMENTS, NO.1, EAST AVENUE, KESAV PERUMALPURAM, CHENNAI 600 028. [PAN: AAACR3578H] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHAJI P. JACOB, SR - DR ASSESSEE BY : NONE DATE OF HEARING : 22.12.2011 DATE OF PRONOUNCEMENT 22.12.2011 ORDER PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) V, CHENNAI DATED 01.04.2011 IN THE ASSESSMEN T YEAR 2003-04. 2. GROUND NO.1 AND 4 OF THE APPEAL ARE GENERAL IN NATURE AND HENCE REQUIRES NO ADJUDICATION BY US. 3. GROUND NO.2 OF THE APPEAL IS DIRECTED AGAINST T HE ORDER OF THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE DISALLOWANCE U NDER SECTION 40 A (3) HAS TO BE INCLUDED IN THE BUSINESS PROFITS FOR THE PU RPOSE OF COMPUTATION OF DEDUCTION UNDER SECTION 80IA OF THE ACT. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.1 11 1271 271271 271/ // /MDS/ MDS/ MDS/ MDS/11 1111 11 2 4. THE LD. CIT(A) HAS DECIDED THE ISSUE BY FOLLOWI NG THE ORDER OF THE CHENNAI B BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE VIDE CONSOLIDATED ORDER PASSED ON 09.04.2009 IN ITA NOS. 198 AND 199/ MDS/2008, WHEREIN, THE TRIBUNAL HAS HELD AS UNDER: . THE SECTION 80IA IS PART OF CHAPTER VI-A OF THE ACT AND THE DEDUCTION UNDER THIS SECTION IS AVAILABLE FROM THE PROFITS AND GAINS OF BUSINESS DERIVED BY AN UNDERTAKING SPECIFIED THERE IN AND IN PAGE NO.5, PARA NO. 7.2 & 7.3 AS UNDER: 7.2 THE LEGAL POSITION STATED ABOVE CAN BE EXPAND ED A LITTLE FURTHER. THE TOTAL SALE/TURNOVER, AS APPEARING IN THE TRADING AND PROFIT AND LOSS ACCOUNT IS REDUCED BY EXPENSES/DEDUCTIONS AS PER THE PROVISIONS OF SECTION 29 R.W.S. 30 TO 43D IN ORDER TO ARRIVE AT THE INCO ME REFERRED TO IN SECTION 28. 7.3 THE CIT(A) SAYS THAT A DISALLOWANCE U/S 40A(3) WILL CREATE A DEEMED INCOME. THIS VIEW IS TOTALLY ERRONEOUS. THE DISALL OWNACES MADE BY THE AO UNDER DIFFERENT SECTIONS FROM 30 TO 43D OF THE ACT DO NOT CHANGE THE NATURE OF THE INCOME THAT IS ARRIVED AT. WE SEE NO AMBIGUIT Y IN THIS REGARD. RESPECTFULLY FOLLOWING THE HONOURABLE ITAT ORDER I T IS HELD THAT THE DISALLOWANCE MADE U/S 40A(3) OF ` .4,54,049/- SHOULD FORM PART OF AND ELIGIBLE FOR DEDUCTION ON COMPUTING RELIEF U/S 80IA . 5. DESPITE ISSUE OF NOTICE [AD ON RECORD], NONE AP PEARED ON BEHALF OF THE ASSESSEE OR ANY ADJOURNMENT APPLICATION HAS BEE N FILED. HENCE, WE PROCEEDED TO DECIDE THE APPEAL AFTER HEARING THE LD . DR. 6. WE HAVE HEARD THE LD. DR SHRI SHAJI P. JACOB, S R-DR. HE HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER. HE HAS NO T POINTED OUT ANY MISTAKE IN THE ABOVE QUOTED ORDER OF THE TRIBUNAL RELIED UP ON BY THE LD. CIT(A) WHILE ALLOWING RELIEF TO THE ASSESSEE. HE COULD NOT POINT OUT ANY DISTINGUISHING FACT FOR NOT FOLLOWING THE EARLIER ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE. HE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.1 11 1271 271271 271/ // /MDS/ MDS/ MDS/ MDS/11 1111 11 3 ALSO COULD NOT BRING ANY MATERIAL ON RECORD TO SHOW THAT THE ORDER OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE IN EARLIER YEA RS WAS VARIED IN APPEAL BY ANY HIGHER AUTHORITY. THEREFORE, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) AND THE SAME IS CO NFIRMED. ACCORDINGLY, THIS GROUND OF APPEAL IS DISMISSED. 7. GROUND NO.3 OF THE APPEAL OF THE REVENUE IS DIR ECTED AGAINST THE ORDER OF THE LD. CIT(A) HOLDING THAT DEDUCTION UNDE R SECTION 80IA NEED NOT BE REDUCED FROM THE PROFITS OF THE BUSINESS FOR COMPUT ING DEDUCTION UNDER SECTION 80HHC. 8. THE LD. CIT(A) HAS OBSERVED THAT THE SAME ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ASSESSEE S OWN CASE IN THE ASSESSMENT YEAR 2003-04 IN ITA NO. 198/MDS/2008 ORD ER DATED 09.04.2009 HOLDING THAT WHILE COMPUTING DEDUCTION UNDER SECTIO N 80HHC, THE DEDUCTION ALLOWED UNDER SECTION 80IA NEED NOT BE REDUCED. HE HAS ALSO OBSERVED IN THE ORDER THAT THE TRIBUNAL, WHILE HOLDING SO HAS F OLLOWED THE DECISION OF THE HONBLE MADRAS HIGH COURT ON THE SAME POINT IN THE CASE OF SCM CREATIONS VS. CIT 304 ITR 319 (MAD). HE HAS ALSO OBSERVED THA T SIMILAR VIEW HAS ALSO BEEN TAKEN BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. MRF LTD. IN T.C.NO. 1020/2009 ORDER DATED 27.10.2009. 9. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. HE COULD NOT POINT OUT ANY ERROR IN THE ORDER OF THE LD. CIT(A). HENCE, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) AND THE SAME IS I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.1 11 1271 271271 271/ // /MDS/ MDS/ MDS/ MDS/11 1111 11 4 CONFIRMED. ACCORDINGLY, THE GROUND RAISED BY THE RE VENUE IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED AT THE CLOSE OF THE HEARING IN TH E PRESENCE OF THE PARTIES ON 22.12.2011. SD/ - SD/ - (GEORGE MATHAN) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER CHENNAI, DATED, THE 22.12.2011 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.