PRAYAS WRITING INSTRUMENTS, MUMBAI V. DCIT 24(3), MUMBAI

ITA 1311/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79053 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 12-02-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 11-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHA KALA
• Keywords: Rectification of order; Question of law

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI .., . .!'#, $ , % BEFORE SHRI I.P.BANSAL, JM AND SHRI N.K.BILLAIYA, A M ITA NO.1311/MUM/2011 : ASST.YEAR 2007-08 PRAYAS WRITING INSTRUMENTS, 113, SATI INDUSTRIAL ESTATE, I.B.PATEL ROAD, GOREGAON (EAST), MUMBAI 400 063. PAN:AAGFP 6727P THE DY. CIT 24(3), BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI 400 051. ( &' / // / APPELLANT) / VS. ( )*&'/ RESPONDENT) ITA NO.1312/MUM/2011 : ASST.YEAR 2007-08 PRAYAS PEN & PLASTIC INDUSTRIES, 207, SATI INDUSTRIAL ESTATE, I.B.PATEL ROAD, GOREGAON (EAST), MUMBAI 400 063. PAN:AAA FP 7978C THE DY. CIT 24(3), BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI 400 051. ( &' / // / APPELLANT) / VS. ( )*&'/ RESPONDENT) &' + , + , + , + , /APPELLANTS BY : SHRI K.GOPAL )*&' + , + , + , + , /RESPONDENT BY : MS.ABHA KALA + -.$ / / / / DATE OF HEARING : 03.06.2014 /01 + -.$ / DATE OF PRONOUNCEMENT : 03.06.2014 2 2 2 2 / / / / O R D E R PER I.P.BANSAL (JM) : BOTH THESE APPEALS ARE FILED BY THE RESPECTIVE AS SESSES AND THESE ARE DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY LD. CIT(A)-34, MUMBAI DATED 10/12/2010 FOR ASSESSMENT YEAR 2007-08. GROUNDS IN BOTH THE APPEALS READ AS UNDER: GROUNDS OF APPEAL IN ITA NO.1311/MUM/2011: 1. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDI TIONS MADE BY LD. AO ON ACCOUNT OF DISALLOWING THE DUTY DRAWBACK OF RS. 4,8 2,241/- CREDITED TO PROFIT & LOSS A/C AS INCOME NOT ELIGIBLE FOR DEDUCTION U/S. 801B(4). ITA NO.1311& 1312/MUM/2011 : ASST.YEAR 2007-08 2 2. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDI TIONS MADE BY LD. AO ON ACCOUNT OF DISALLOWING THE DEPB BENEFIT OF RS. 1,20 ,877/- CREDITED TO PROFIT & LOSS A/C. AS INCOME NOT ELIGIBLE FOR DEDUCTION U/S. 801B (4). 3. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDI TIONS MADE BY LD. AO ON ACCOUNT OF DISALLOWING THE INTEREST INCOME OF RS. 6 4,596/- CREDITED TO PROFIT & LOSS A/C. AS INCOME NOT ELIGIBLE FOR DEDUCTION U/S. 801B(4) WITHOUT CONSIDERING THE FACT THAT ABOVE INTEREST IS EARNED ON THE COMPU LSORY FDR PLACED WITH BANK AS PER THE TERMS OF LOAN SANCTION LETTER, USED FOR BUS INESS PURPOSE ONLY. GROUNDS OF APPEAL IN ITA NO.1312/MUM/2011: 1. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDI TIONS MADE BY LD. AO ON ACCOUNT DISALLOWING THE DUTY DRAWBACK OF RS.5,94,11 5/-CREDITED TO PROFIT & LOSS A/C AS INCOME NOT ELIGIBLE FOR DEDUCTION U/S. 801B( 4). 2. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDI TIONS MADE BY LD. AO ON ACCOUNT OF DISALLOWING THE DEPB BENEFIT OF RS.74,59 3/- CREDITED TO PROFIT & LOSS A/C. AS INCOME NOT ELIGIBLE FOR DEDUCTION U/S. 801B (4). 3. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDI TIONS MADE BY LD AO ON ACCOUNT OF DISALLOWING THE INTEREST INCOME OF RS.12 ,51,966/- CREDITED TO PROFIT & LOSS A/C. AS INCOME NOT ELIGIBLE FOR DEDUCTION U/S. 801B(4) WITHOUT CONSIDERING THE FACT THAT ABOVE INTEREST IS EARNED ON THE COMPU LSORY FDR PLACED WITH BANK AS PER THE TERMS OF LOAN SANCTION LETTER, USED FOR BUS INESS PURPOSE ONLY. 2. SINCE ISSUES RAISED IN BOTH THE APPEALS ARE COMM ON AND THEY WERE ARGUED TOGETHER BY BOTH THE PARTIES, FOR THE SAKE O F CONVENIENCE WE DISPOSE OF THEM BY THIS COMMON ORDER. 3. IN GROUND NO.1,2 & 3 THE ASSESSEE IS CHALLENGING THE NON-CONSIDERATION OF DUTY DRAW BACK, DEPB BENEFIT AND INTEREST BEING ELI GIBLE FOR DEDUCTION UNDER SECTION 80IB(4) OF THE INCOME TAX ACT, 1961(THE ACT ). THOUGH THE ISSUES HAVE BEEN DECIDED AGAINST THE ASSESSEE IN PRECEDING YEAR BY THE TRIBUNAL AS PER FOLLOWING ORDERS. HOWEVER, LD. AR SUBMITTED THAT TH E ISSUES MAY BE RECONSIDERED IN THE LIGHT OF DECISION OF ITAT JODH PUR BENCH IN THE CASE OF SARRAF EXPORTS VS. ITO, 142 ITD 388 (JODH). DECISIONS IN THE CASE OF M/S. PRAYAS WRITING INSTRU MENTS: 1. ITA NO.1809/MUM/2009, ORDER DATED 30/6/2010 FO R ASSESSMENT YEAR 2005-06. ITA NO.1311& 1312/MUM/2011 : ASST.YEAR 2007-08 3 2. ITA NO.290/MUM/2010, ORDER DATED 9/9/2010 FOR AS SESSMENT YEAR 2006- 07. DECISIONS IN THE CASE OF M/S. PRAYAS PEN & PLASTIC INDUSTRIES: 1. ITA NO.289/MUM/2010, ORDER DATED 09/09/2010 FOR ASSESSMENT YEAR 2006-07. 3.1 IT MAY ALSO BE MENTIONED HERE THAT THE ASSESSEE PREFERRED APPEAL BEFORE HONBLE BOMBAY HIGH COURT IN THE CASE PRAYS WRITING INSTRUMENTS AND THE SAID APPEAL OF THE ASSESSEE HAS BEEN DISMISSED BY HONB LE HIGH COURT VIDE THEIR ORDER DATED 15/12/2011 IN INCOME TAX APPEAL NO.487 OF 2011 AND OBSERVATIONS OF THEIR LORDSHIPS ARE AS UNDER: 1. COUNSEL FOR THE APPELLANT ASSESSEE STATES THA T THE QUESTION OF LAW RAISED IN THIS APPEAL IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. COMMISSIONER OF IN COME TAX REPORTED IN (2009) 317 ITR 218 (SC). 2. THE APPEAL IS ACCORDINGLY DISMISSED WITH NO ORDE R AS TO COST. COPIES OF ALL THESE ORDERS ARE PLACED ON OUR RECOR D. 4. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. WE FOUND THAT THE RELIANCE PLACED BY LD. AR ON THE DECISION IN THE CASE OF SARRAF EXPORTS VS. ITO(SUPRA) IS MISPLACED . THE SAID DECISION CANNOT PROVIDE ANY BENEFIT TO THE ASSESSEE FOR MORE THAN O NE REASON. IN THE SAID CASE THE ISSUE INVOLVED BEFORE THE TRIBUNAL WAS REGARDIN G RECTIFICATION OF MISTAKE. MOREOVER, THE VIEW TAKEN IN THAT DECISION WAS BASED ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT BEING JURISDICTIONAL HIGH COUR T IN THE CASE OF SARRAF SEASONING UDYOG VS. ITO, 174 TAXMANN 594 (RAJ), W HEREIN HONBLE GUJRAT HIGH COURT PRIOR TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT, 317 ITR 218 (SC) HAD HELD THAT SALE OF DEPB LICENCE SHALL BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80 IB. HOWEVER , IN THE PRESENT CASE NO SUCH DECISION OF JURISDICTIONAL HIGH COURT EXIST. AS A GAINST THAT THERE EXISTS HONBLE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF ASSESSEE ITSELF WHEREIN IMPUGNED ISSUES HAVE BEEN DECIDED AGAINST THE ASSESSEE FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F LIBERTY INDIA VS. CIT, 317 ITA NO.1311& 1312/MUM/2011 : ASST.YEAR 2007-08 4 ITR 218 (SC). THE RELEVANT OBSERVATIONS OF THEIR L ORDSHIP HAVE ALREADY BEEN REPRODUCED. AS PER RULE OF PRECEDENCE THE TRIB UNAL IS BOUND TO FOLLOW THE DECISION OF JURISDICTIONAL HIGH COURT. THEREFORE, REJECTING THE CONTENTION OF LD. AR AND FOLLOWING THE DECISIONS RENDERED BY TRIBUNA L IN ASSESSEES OWN CASE AND ALSO THE DECISION OF JURISDICTIONAL HIGH COURT, WE DECIDE ALL THE ISSUES RAISED IN THE PRESENT APPEALS AGAINST THE ASSESSE E AND BOTH THE APPEALS FILED BY THE ASSESSEE ARE DISMISSED. 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE DISMISSED. ORDER PRONOUNCED ON THIS 3 RD JUNE, 2014. 2 + /01 34 03/06/2014 0 + ; SD/- SD/- (N.K.BILLAIYA) (I.P.BANSAL) $ $ $ $ / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 3 DATED : 3RD JUNE, 2014. VM. 2 + )-! < !1- 2 + )-! < !1- 2 + )-! < !1- 2 + )-! < !1-/ COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. )*&' / THE RESPONDENT. 3. =() / THE CIT, MUMBAI. 4. = / CIT(A)-13, MUMBAI 5. !@; )- , , / DR, ITAT, MUMBAI 6. ;A B / GUARD FILE. 2 2 2 2 / BY ORDER, *!- )- //TRUE COPY// C CC C/ // /D E D E D E D E (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI