MARVEL HOUSEWARE P. LTD, MUMBAI V. DCIT CIR 5(2), MUMBAI

ITA 1323/MUM/2010

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6304 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2001-2002
• Appeal Filed On: 17-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MEGHANA BUTALA
• Keywords: Assessment record
• Section: 5(2); 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'J' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1323/MUM/2010 (ASSESSMENT YEAR: 2001-02) M/S. MARVEL HOUSEWARE P. LTD. DCIT, CIRCLE 5(2) 16, SARVODAYA MILL COMPOUND 5TH FLOOR, AAYAKAR BHAV AN UNIT NO. 8, GARDEO ROAD VS. M.K. ROAD, MUMBAI 400020 MUMBAI 400034 PAN - AAACM 3179 M APPELLANT RESPONDENT APPELLANT BY: MS. MEGHANA BUTALA RESPONDENT BY: NONE O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)-IX, MUMBAI DATED 20.12.2009. 2. ASSESSEE HAS RAISED THE FOLLOWING THREE GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE COMMISSIONER OF INCOME TAX, APPEALS 9, MUMBAI, HE REINAFTER REFERRED TO AS THE LD. CIT(A) HAS ERRED IN LAW IN T REATING THE ENTIRE RECEIPTS ON SALE OF DEPB LICENSE AS INCOME INSTEAD OF ONLY TREATING ONLY THE PROFITS ON SALE OF DEPB LICENSE. THE SAID ADDITION MAY PLEASE BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD CIT(A) HAS ERRED IN RESTRICTING DEDUCTION U/S. 80HH C AT RS.48,50,885/- INSTEAD OF RS.2,83,04,014/- AS CLAIM ED BY THE APPELLANT. THE SAID DEDUCTION MAY PLEASE BE GRANTED IN ACCORDANCE WITH THE PROVISIONS OF LAW. 3. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS OF THE CASE ON CONSIDERING THE SALES OF DEPB AMOUNTING TO RS.29449 5443 AS PROFIT ON SALE OF DEPB. THE SAID ADDITION MAY PLEASE BE RE STRICTED TO ONLY PROFITS EARNED ON TRANSFER OF DEPB LICENSE. 3. THE CIT-DR SOUGHT ADJOURNMENT ON THE PRETEXT OF GET TING ASSESSMENT RECORDS AND ON NOTICING THAT THE ISSUE IS COVERED, THE ADJOURNMENT WAS ITA NO. 1323/MUM/2010 M/S. MARVEL HOUSEWARE P. LTD. 2 REJECTED AND THE CASE WAS HEARD EXPARTE RESPONDENT IE. IN THE ABSENCE OF THE CIT-D.R. 4. THE ISSUE IN THE ABOVE GROUNDS IS WITH REFERENCE TO CLAIM OF DEDUCTION UNDER SECTION 80HHC ON SALE OF DEPB LICENSE. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS RECEIVED AN AMOUNT OF ` 3,28,93,715/- ON SALE OF DEPB. BUSINESS TURNOVER OF THE ASSESSEE EXC EEDS ` 10 CRORES. THEREFORE, THE PROVISIONS OF THIRD PROVISO TO SECTI ON 80HHC(3) ARE APPLICABLE TO THE CASE OF THE ASSESSEE. AS PER THIS PROVISO, A MOUNT AVAILABLE FOR DEDUCTION UNDER SECTION 80HHC(3) IS TO BE INCREASED BY AN AMOUNT OF WHICH BEARS TO NINETY PERCENT OF ANY SUM REFERRED TO IN C LAUSE (IIID) OF SECTION 28, THE SAME PROPORTION AS THE EXPORT TURNOVER BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE, IF THE ASSESSE E HAS NECESSARY AND SUFFICIENT EVIDENCE TO PROVE THAT: - A) HE HAD AN OPTION TO CHOOSE EITHER THE DUTY DRAWBACK OR THE DUTY ENTITLEMENT PASS BOOK SCHEME, BEING THE DUTY REMISS ION SCHEME; AND B) THE RATE OF DRAWBACK CREDIT ATTRIBUTABLE TO THE CUS TOMS DUTY WAS HIGHER THAN THE RATE OF CREDIT ALLOWABLE UNDER THE DUTY ENTITLEMENT PASS BOOK SCHEME, BEING THE DUTY REMISSION SCHEME. IN THE ASSESSMENT ORDER THE A.O. HELD THAT THE ASSE SSEE HAS NOT BEEN ABLE TO PROVE THAT RATE OF DUTY DRAWBACK WAS HIGHER THAN TH E RATE OF DEPB AVAILABLE. THUS, ACCORDING TO THE A.O. THE AMOUNT A VAILABLE FOR DEDUCTION UNDER SECTION 80HHC(3) CANNOT BE FURTHER INCREASED AS PER PROVISIONS OF THIRD PROVISO TO SECTION 80HHC(3). THE ASSESSING OF FICER REDUCED THE CLAIM OF THE ASSESSEE FOR DEDUCTION TO ` 48,50,885/-. AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL TO THE CIT(A) WITHOUT ANY SUCC ESS. 5. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE WAS HELD IN FAVOUR OF REVENUE BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF KALPATARU COLOURS AND CHEMICALS 328 IT R 451 ON THE ISSUE OF DPEB AND ACCORDINGLY THE GROUNDS OF APPEAL RAISED B Y THE ASSESSEE DO NOT SURVIVE. IN VIEW OF THE PRINCIPLES ESTABLISHED BY T HE HON'BLE BOMBAY HIGH ITA NO. 1323/MUM/2010 M/S. MARVEL HOUSEWARE P. LTD. 3 COURT IN THE CASE OF KALPATARU COLOURS AND CHEMICAL S (SUPRA) THE GROUNDS ARE TO BE DECIDED AGAINST THE ASSESSEE. ACCORDINGLY THE GROUNDS ARE REJECTED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH NOVEMBER 2010. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 14 TH NOVEMBER 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) IX, MUMBAI 4. THE CIT V, MUMBAI CITY 5. THE DR, J BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.