Bisazza India Limited, Mehsana V. The CIT-I, Ahmedabad

ITA 1381/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6517 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-05-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 30-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Depreciation; Principle of natural justice; Assessment record; Unabsorbed depreciation; Reassessment proceedings
• Section: 143(3); 80HHC; 147

Judgement Text

ITA NO.1381/AHD/20 10 ASSESSMENT YEAR 2000-01. 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH,AHM EDABAD. ( BEFORE SHRI D.K.TYAGI AND SHRI A.K. GARODIA) I.T .A. NO.1381/AHD/2010 (ASSESSMENT YEAR: 2000 -2001 ) M/S. BISAZZA INDIA PVT. LTD., 372/2, BUDASAN, NEAR GAIL OFFICE, GIDC KALOL, DISTRICT MEHSANA. (APPELLANT) VS. COMMISSIONER OF INCOME TAX- I, 3 RD FLOOR, INSURANCE BUILDING, ASHRAM ROAD, AHMEDABAD. (RESPONDENT) PAN: AAACB 6284 G APPELLANT BY : SHRI S.N.SOPARKAR, SR. ADVOCAT E RESPONDENT BY : SHRI ANILKUMAR CIT(DR) ( (( ( )/ )/)/ )/ ORDER PER: SHRI A.K. GARODIA , A.M. THIS IS AN ASSESSEES APPEAL DIRECTED A GAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX-I, AHMEDABAD DATED 31-12 -2009 FOR THE ASSESSMENT YEAR 2000-01 PASSED BY HIM UNDER SECTION 263. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER:- 1. LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AND ON FACTS IN PASSING ORDER U/S. 263 HOLDING THE ASSESSM ENT ORDER PASSED U/S. 143(3) R. W. S. 147 OF THE ACT AS ERRONEOUS AND PRE JUDICIAL TO THE INTEREST OF REVENUE TO THE EXTENT OF ALLOWANCE OF DEDUCTION UNDER THE PROVISIONS OF SECTION 80HHC OF THE ACT WITHOUT SETTING OFF OF UNABSORBED DEPRECIATION AND UNABSORBED BUSINESS LOSS. THE LEAR NED CIT HAS FAILED TO APPRECIATE THE FACT THAT THE ASSESSMENT ORDER SO UGHT TO BE REVISED WAS PASSED AFTER PROPER INQUIRY AND VERIFICATION BY ASSESSING OFFICER OF THE CLAIM MADE BY THE APPELLANT AND HENCE THIS ORDE R OF CIT, WHICH IS TOTALLY ERRONEOUS, PREJUDICIAL, AND AGAINST THE PRI NCIPLES OF NATURAL JUSTICE DESERVES TO BE QUASHED. 2. LD. CIT HAS FURTHER ERRED IN DIRECT ING AO TO WORK OUT THE TAX LIABILITY OF THE APPELLANT U/S. 115JA OF THE ACT MA KING APPLICABLE THE RATIO ITA NO.1381/AHD/20 10 ASSESSMENT YEAR 2000-01. 2 OF SUPREME COURT JUDGMENT IN SHIRKE CONSTRUCTION EQ UIPMENT LTD., WITHOUT APPRECIATING THE FACT THAT THE DEDUCTION U/ S. 80HHC IS TO BE WORKED OUT ON THE BASIS OF ADJUSTED BOOK PROFIT WHI LE COMPUTING LIABILITY IN MAT ASSESSMENT AND NOT ON THE BASIS OF PROFIT CO MPUTED UNDER REGULAR PROVISIONS OF LAW. THE REVISIONAL ORDER OF THE CIT IS HARSH, UNCALLED FOR AND COMPLETELY AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 3. BRIEFLY STATED, THE FACTS ARE THAT IT IS NOTED BY THE LD. CIT IN PARAGRAPH 1.1 OF THE IMPUGNED ORDER THAT THE ASSESSEE HAS FILED R ETURN OF INCOME ON 30-11- 2000 WHICH WAS PROCESSED U/S. 143(1) ON 22-6-2001 A ND THEREAFTER, REASSESSMENT PROCEEDINGS WERE UNDERTAKEN U/S. 147 O N THE GROUND THAT DEDUCTION U/S. 80HHC WAS WRONGLY CLAIMED IN AS MUCH AS EXPORT INCENTIVE RECEIVED BY THE ASSESSEE COMPANY WERE NOT TO BE IN CLUDED WHILE CALCULATING DEDUCTION IN VIEW OF THE AMENDMENT INTRODUCED BY TH E TAXATION LAWS AMENDMENT ACT, 2005 SINCE THE TURNOVER OF THE ASSES SEE COMPANY EXCEEDED RS.10 CRORES. IT IS FURTHER NOTED BY THE LD. CIT TH AT THE REASSESSMENT ORDER WAS COMPLETED ON 18-12-2007 AND AS PER THIS ORDER, THE GROSS TOTAL INCOME (AFTER CLAIM OF UNABSORBED BUSINESS LOSS OF RS.1,47,51,523 /- AND UNABSORBED DEPRECIATION OF RS. 4,14,54,030/-) WAS WORKED OUT A T RS.71,35,818/- AND DEDUCTION U/S. 80HHC WAS CALCULATED AT RS. 5,14,01, 485/- BUT WAS RESTRICTED TO THE GROSS TOTAL INCOME OF RS.71,35,818/- AND IN THI S MANNER, TOTAL INCOME WAS COMPUTED AT RS. NIL WHEREAS THE MAT LIABILITY U/S.1 15JA WAS WORKED OUT AT RS.7,74,410/-. IT IS FURTHER NOTED BY LD. CIT THAT WHILE WORKING OUT THE MAT LIABILITY U/S. 115JA, THE ASSESSING OFFICER HAS ALL OWED DEDUCTION U/S. 80HHC OF RS.5,14,01,785/- AND IN THIS MANNER, BOOK PROFIT WA S WORKED OUT AT RS.67,04,840/- 30% OF WHICH WAS WORKED OUT TO RS. 2 0,11,455/- AND TAX THEREON WAS WORKED OUT AT RS. 7,74,410/-. THE LD. CIT HAS F URTHER POINTED OUT IN PARAGRAPH 2 OF THE IMPUGNED ORDER THAT PERUSAL OF T HE ASSESSMENT RECORDS REVEALED THAT THE ASSESSEE COMPANY HAS CALCULATED D EDUCTION U/S. 80HHC WITHOUT SETTING OFF OF UNABSORBED DEPRECIATION AND BUSINESS LOSS. HE HAS REFERRED TO THE JUDGMENT OF HONBLE APEX COURT REN DERED IN C.I.T. VS. SHIRKE CONSTRUCTION EQUIPMENT LTD., REPORTED AT 161 TAXMAN 212 (SC) AND ON THE BASIS OF THIS JUDGMENT; LD. COMMISSIONER OF INCOME TAX WA S OF HIS OPINION THAT THE ITA NO.1381/AHD/20 10 ASSESSMENT YEAR 2000-01. 3 ASSESEE IS NOT JUSTIFIED IN CLAIMING DEDUCTION U/S. 80HHC BEFORE SETTING OFF OF UNABSORBED DEPRECIATION AND BROUGHT FORWARD BUSINES S LOSS. IN PARAGRAPH 2.1 OF THE IMPUGNED ORDER, IT IS FURTHER NOTED BY THE COMM ISSIONER OF INCOME TAX THAT IT IS ALSO NOTICED FROM THE RECORD THAT THE ENTIRE BRO UGHT FORWARD BUSINESS LOSS AND UNABSORBED DEPRECIATION HAS BEEN SET OFF AGAINST TH E INCOME FOR ASSESSMENT YEAR 1999-2000 AND NOTHING REMAINED TO BE ADJUSTED IN ASSESSMENT YEAR 2000- 01. IT IS FURTHER NOTED BY HIM AND HE ACCORDINGLY I SSUED A NOTICE U/S. 263 ON 4-12- 2009. BEFORE THE LD. CIT, IT WAS SUBMITTED BY THE A SSESSEE THAT WHILE WORKING OUT THE AMOUNT OF DEDUCTION AS PER THE PROVISIONS O F EXPLANATION 2 TO SECTION 115JB, THE ASSESSEE IS NOT REQUIRED TO GIVE EFFECT TO THE PROVISIONS OF SUB-SECTION (1B) OF SECTION 80HHC. IT WAS ALSO AN ARGUMENT OF T HE ASSESSEE THAT AMOUNT OF PROFITS ELIGIBLE FOR DEDUCTION U/S. 80HHC IS REQUIR ED TO BE REDUCED FOR THE PURPOSE OF COMPUTING BOOK PROFIT AND NOT THE ACTUAL AMOUNT FOR WHICH THE ASSESSEE COMPANY MAY BE ENTITLED TO CLAIM DEDUCTION U/S. 80H HC. THE LD. CIT WAS NOT SATISFIED AND HE HELD THAT THE ASSESSMENT ORDER PAS SED BY THE ASSESSING OFFICER U/S. 143(3) R. W. S. 147 DATED 18-12-2007 IS ERRONE OUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE IN VIEW OF DECISION OF HONBLE APEX COURT RENDERED IN THE CASE OF C.I.T. VS. SHIRKE CONSTRUCTION EQUIPMEN T LTD., (SUPRA). HE MODIFIED THE ASSESSMENT ORDER U/S. 263 AND COMPUTED THE BOOK PROFIT AT RS. 5,75,37,965/- AND DIRECTED THE ASSESSING OFFICER TO WORK OUT THE TAX LIABILITY U/S. 115JA ALONG WITH INTEREST CHARGEABLE AS PER THE PROVISIONS OF L AW. AGAINST THIS ORDER OF THE LD. COMMISSIONER OF INCOME TAX, THE ASSESSEE IS IN APPE AL BEFORE US. 4. THE LD. AUTHORIZED REPRESENTATIVE OF TH E ASSESSEE STARTED THE ARGUMENT ON THIS BASIS THAT THE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE AND HENCE, THE IMPUGNED ORD ER PASSED BY THE LD. C.I.T. U/S. 263 SHOULD BE QUASHED. AT THIS JUNCTURE, IT W AS POINTED OUT BY THE BENCH THAT THE LD. CIT MADE ADJUSTMENT IN THE BOOK PROFIT ON TWO COUNTS. ONE ADJUSTMENT MADE BY HIM IS BY WAY OF REDUCTION IN TH E AMOUNT OF DEDUCTION ALLOWABLE TO THE ASSESSEE U/S. 80HHC WHILE COMPUTIN G BOOK PROFIT AND HE HAS ALLOWED DEDUCTION U/S. 80HHC TO THE EXTENT OF RS. 7 1,35,818/- ONLY AS AGAINST THE DEDUCTION ALLOWED BY THE ASSESSING OFFICER U/S. 80HHC OF RS. 5,14,01,785/- ITA NO.1381/AHD/20 10 ASSESSMENT YEAR 2000-01. 4 WHILE COMPUTING THE BOOK PROFIT U/S. 115JA. THE SE COND ADJUSTMENT MADE BY LD. CIT FOR THE PURPOSE OF BOOK PROFIT IS THIS THAT HE HAS NOT ALLOWED ANY DEDUCTION ON ACCOUNT OF SET OFF OF BROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECIATION WHEREAS THE ASSESSING OFFICER HAD ALLOWED DEDUCTION OF RS. 65,67,148/- ON THIS ACCOUNT WHILE COMPUTING THE BOOK PROFIT U/S. 115JA. AS PER THE GROUNDS RAISED BY THE ASSESSEE, NO GROUND HAS BEEN RAISED REGARDIN G THIS ASPECT OF NOT ALLOWING SET OFF OF BROUGHT FORWARD LOSS OR UNABSORBED DEPRE CIATION. IT WAS POINTED OUT BY THE BENCH THAT IN THIS SITUATION, THE ASSESSMENT OR DER PASSED BY THE ASSESSING OFFICER WAS DEFINITELY ERRONEOUS AS WELL AS PREJUDI CIAL TO THE INTEREST OF THE REVENUE. IN REPLY, THE LD. A.R. OF THE ASSESSEE HAD NOTHING TO SAY. HE THEN ARGUED REGARDING THE ADJUSTMENT MADE BY THE LD. CIT IN RESPECT OF THE DEDUCTION ALLOWABLE TO THE ASSESSEE U/S. 80HHC FOR THE PURPOS E OF COMPUTING BOOK PROFIT U/S. 115JA. HE PLACED RELIANCE ON THE JUDGMENT OF F ULL BENCH OF HONBLE KERALA HIGH COURT RENDERED IN THE CASE OF C.I.T. VS. PACKW ORTH UDYOG LTD., DATED 30-11- 2010 AS REPORTED IN 2010-(IT2)GJX-0336U-KER. IT WAS SUBMITTED BY HIM THAT THIS JUDGMENT IS BY FUILL BENCH OF HONBLE KERALA HIGH COURT AFTER DULY CONSIDERING THE LATEST JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF AJANTA PHARMA LTD., AS REPORTED IN 327 ITR 305 (SC). 5. IN REPLY, IT WAS SUBMITTED BY THE LD. D. R. OF THE REVENUE THAT THE ISSUE INVOLVED IS NOT ONE BUT TWO ISSUES ARE INVOLVED. IT WAS HIS SUBMISSION THAT THE ASSESSING OFFICER SHOULD HAVE COMPUTED THE DEDUCTIO N ALLOWABLE TO THE ASSESSEE U/S. 80HHC AFTER ADJUSTMENT OF BROUGHT FOR WARD BUSINESS LOSS AND BROUGHT FORWARD UNABSORBED DEPRECIATION INSTEAD OF RESTRICTING THE DEDUCTION ALLOWABLE TO THE ASSESSEE TO THE EXTENT OF BOOK PRO FIT AFTER COMPUTING THE DEDUCTION ALLOWABLE TO THE ASSESSEE U/S. 80HHC AT R S.5,14,01,485/- WHICH IS COMPUTED WITHOUT ADJUSTMENT OF BROUGHT FORWARD LOSS AND UNABSORBED DEPRECIATION. THE SECOND ISSUE AS PER THE LD. D.R. OF THE REVENUE IS THIS THAT THE DEDUCTION ALLOWABLE TO THE ASSESSEE U/S. 80HHC FOR THE PURPOSE OF COMPUTING BOOK PROFIT U/S. 115JA SHOULD BE RESTRICT ED TO DEDUCTION ACTUALLY ALLOWABLE TO HIM U/S. 80HHC I.E. RS.71,35,818/- AS HAS BEEN DIRECTED BY THE LD. CIT. IN SUPPORT OF THIS CONTENTION, RELIANCE WAS PL ACED BY HIM ON THE JUDGMENT OF ITA NO.1381/AHD/20 10 ASSESSMENT YEAR 2000-01. 5 HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF C IT VS. AL-KABEER EXPORTS LTD., AS REPORTED IN (2010) 233 CTR (BOM.) 443. 6. IN THE REJOINDER, IT WAS SUBMITTED BY LD. A.R. OF THE ASSESSEE THAT THIS JUDGMENT OF HONBLE BOMBAY HIGH COURT CITED BY THE LD. D.R. OF THE REVENUE IS PRIOR TO THE DECISION OF HONBLE APEX COURT RENDERE D IN THE CASE OF CIT VS. AJANTA PHARMA LTD. (SUPRA). IT IS SUBMITTED BY HIM THAT IN THIS JUDGMENT, HONBLE BOMBAY HIGH COURT HAS REFERRED TO ITS OWN JUDGMENT IN THE CASE OF CIT VS.AJANTA PHARMA LTD., 233 CTR 441 (BOMBAY) WHICH HAS BEEN RE VERSED BY HONBLE APEX COURT AND HONBLE KERALA HIGH COURT HAS DULY CONSID ERED THIS LATER JUDGMENT OF HONBLE APEX COURT. IT WAS ALSO HIS SUBMISSION THAT THE ISSUE I.E. WHETHER BROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECI ATION SHOULD BE FIRST SET OFF FOR THE PURPOSE OF DETERMINING THE ALLOWABILITY OF DEDUCTION U/S. 80HHC FOR THE PURPOSE OF COMPUTING THE BOOK PROFIT WAS NOT BEFORE THE HONBLE BOMBAY HIGH COURT IN THE CASE CITED BY THE LD. DR OF REVENUE WH EREAS BEFORE HONBLE KERALA HIGH COURT, THE ISSUE INVOLVED WAS IDENTICAL AND TH EREFORE, THE JUDGMENT OF HONBLE KERALA HIGH COURT SHOULD BE FOLLOWED AND TH E JUDGMENT OF BOMBAY HIGH COURT CITED BY THE LD. D.R. OF THE REVENUE HAS NO R ELEVANCE IN THE PRESENT CASE. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AND GONE THROUGH THE IMPUGNED ORDER OF THE L D. CIT AND THE JUDGMENTS CITED BY BOTH THE SIDES. REGARDING THIS ARGUMENT OF THE LD. D.R. OF THE REVENUE THAT THERE ARE TWO ISSUES INVOLVED, WE ARE NOT SATI SFIED BECAUSE AS PER THE GROUNDS RAISED BY THE ASSESSEE BEFORE US, IT IS THE ONLY DISPUTE RAISED AS TO THE AMOUNT ALLOWABLE AS DEDUCTION U/S. 80HHC WHILE COMP UTING THE BOOK PROFIT. HENCE, ONLY ONE ISSUE IS INVOLVED IN THE APPEAL BEF ORE US THAT WHAT IS THE AMOUNT ALLOWABLE TO THE ASSESSEE AS DEDUCTION U/S. 80HHC F OR THE PURPOSE OF COMPUTING DEDUCTION U/S. 115JA. WE HAVE ALREADY NOTED THAT T HE JURISDICTION OF THE LD. CIT U/S. 263 HAS TO BE UPHELD BECAUSE THE ASSESSMENT OR DER IS DEFINITELY ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVEN UE BECAUSE THE ASSESSING OFFICER HAD ALLOWED THE DEDUCTION OF RS.65,67,148/- ON ACCOUNT OF BROUGHT FORWARD UNABSORBED DEPRECIATION FOR THE PURPOSE OF COMPUTING BOOK PROFIT U/S. 115JA WHICH HAS BEEN DENIED BY THE LD. CIT IN THE I MPUGNED ORDER PASSED BY ITA NO.1381/AHD/20 10 ASSESSMENT YEAR 2000-01. 6 HIM U/S. 263 ON THIS BASIS THAT ENTIRE AMOUNT OF BU SINESS LOSS AS WELL AS UNABSORBED DEPRECIATION WAS ALLOWED IN ASSESSMENT Y EAR 1999-2000 AND AS SUCH, NO SUCH DEDUCTION IS AVAILABLE TO BE SET OFF IN THE PRESENT YEAR. THE ASSESSEE HAS NOT EVEN RAISED GROUND AGAINST THIS DI RECTION OF THE LD. CIT AND HENCE, THE LD. CIT DEFINITELY HAD JURISDICTION U/S. 263 TO REVISE THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER. NOW, THE ONL Y DISPUTE TO BE DECIDED BY US IS WHETHER THE LD. CIT WAS JUSTIFIED IN RESTRICTING THE DEDUCTION ALLOWABLE TO THE ASSESSEE U/S. 80HHC WHILE COMPUTING BOOK PROFIT U/S . 115JA TO THE EXTENT OF RS. 71,35,818/- ONLY OR NOT WHEREAS SUCH DEDUCTION WAS ALLOWED BY THE A.O. TO THE EXTENT OF RS. 5,14,01,785/- IN THE ASSESSMENT ORDER PASSED BY HIM ON 18-12- 2007. IN THIS REGARD, WE FIND THAT THE JUDGMENT OF HONBLE KERALA HIGH COURT RENDERED IN THE CASE OF CIT VS. PACKWORTH UDYOG LTD . (SUPRA) IS SQUARELY APPLICABLE BECAUSE IN THAT CASE ALSO, THE DISPUTE W AS AS TO WHETHER THE AMOUNT OF BROUGHT BUSINESS LOSS AND UNABSORBED DEPRECIATIO N SHOULD BE FIRST SET OFF BEFORE COMPUTING THE DEDUCTION ALLOWABLE TO THE ASS ESSEE U/S. 80HHC FOR THE PURPOSE OF COMPUTING BOOK PROFIT AND IT WAS HELD BY HONBLE KERALA HIGH COURT THAT IT IS NOT SO REQUIRED. IT WAS ALSO HELD BY HON BLE KERALA HIGH COURT THAT THEY DO NOT APPROVE THE ASSESSEES CONTENTION THAT EXPOR T PROFIT HAS TO BE COMPUTED WITH REFERENCE TO THE PROFIT AND LOSS ACCOUNT PREPA RED UNDER THE COMPANIES ACT AND IT WAS HELD THAT THIS CONTENTION OF THE ASSESSE E IS EQUALLY UNACCEPTABLE. IT WAS HELD BY HON KERALA HIGH COURT THAT THE ASSESSEE IS ENTITLED TO DEDUCTION OF EXPORT PROFIT UNDER SECTION 80HHC AND THE RELIEF IS TO BE GRANTED IN TERMS OF SUB- SECTION (3) AND (3A) OF THE SAID SECTION. HON KERAL A HIGH COURT DIRECTED THE ASSESSING OFFICER TO RE-COMPUTE THE BOOK PROFIT DED UCTION BY GRANTING DEDUCTION UNDER SECTION 80HHC IN TERMS OF SUB-SECTION 3 & (3A ) AND ALSO THE DECISION OF HONBLE APEX COURT RENDERED IN THE CASE OF AJANTA P HARMA LTD. (SUPRA),. THE RELEVANT PARAGRAPH OF THIS JUDGMENT OF THE HON KERA LA HIGH COURT IS REPRODUCED BELOW:- WE FEEL THE RESTRICTION CONTAINED IN SECTION 80AB OR SECTION 80B(5) COULD NOT BE APPLIED IN AS MUCH AS CARRY FORWARD OF BUSINESS LOSS OR DEPRECIATION SHOULD NOT BE FIRST SET-OFF LEAVING GR OSS TOTAL INCOME NIL, WHICH DISENTITLES THE ASSESSEE FOR DEDUCTION UNDER OTHER PROVISIONS OF ITA NO.1381/AHD/20 10 ASSESSMENT YEAR 2000-01. 7 CHAPTER VIA-C WHICH INCLUDES SECTION 80HHC ALSO. BU T ASSESSEES CONTENTION THAT EXPORT PROFIT HAS TO BE COMPUTED WI TH REFERENCE TO THE PROFIT AND LOSS ACCOUNT PREPARED UNDER THE COMPANIE S ACT IS EQUALLY UNACCEPTABLE BECAUSE THERE IS NO SUCH PROVISION IN SECTION 80HHC TO DETERMINE EXPORT PROFIT WITH REFERENCE TO PROFIT AN D LOSS ACCOUNT MAINTAINED UNDER THE COMPANIES ACT. CONSISTENT WITH THE DECISION OF THE SUPREME COURT, WE HOLD THAT ASSESSES ARE ENTITLED T O DEDUCTION OF EXPORT PROFIT UNDER SECTION 80HHC AND THE RELIEF IS TO BE GRANTED IN TERMS OF SUB-SECTION (3) AND (3A) OF THE SAID SECTI ON. WE THEREFORE, DISPOSE OF THE APPEALS B Y VACATING THE ORDERS OF THE LOWER AUTHORITIES WITH DIRECTION TO THE ASSESSING OFFICER TO RECOMPUTED THE BOOK PROFIT BY GRANTING DEDUCTION UNDER SECTION 80H HC IN TERMS OF ABOVE FINDINGS AND THE DECISION OF THE SUPREME COUR T IN AJANTA PHARMA LTRD.S CASE REFERRED ABOVE. 8. NOW, WE CONSIDER THE JUDGMENT OF THE HO N. BOMBAY HIGH COURT CITED BY THE LD. D.R. OF THE REVENUE I.E. THE JUDGMENT IN TH E CASE OF CIT VS. AL-KABEER EXPORTS LTD., (SUPRA). IN THIS CASE, THE HON. BOMBA Y HIGH COURT HAS TAKEN THE GUIDANCE FROM ITS OWN JUDGMENT RENDERED IN THE CASE OF CIT VS. AJANTA PHARMA LTD. (SUPRA). JUDGMENT RENDERED BY HONBLE BOMBAY H IGH COURT IN THE CASE OF AJANTA PHARMA LTD. (SUPRA) HAD BEEN REVERSED BY HON BLE APEX COURT. HENCE, IN OUR CONSIDERED OPINION, THIS JUDGMENT OF HON. BOMBA Y HIGH COURT RENDERED IN THE CASE OF CIT VS. AL-KABEER EXPORTS LTD., IS NOT A GOOD LAW AFTER THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF AJANT A PHARMA LTD.(SUPRA) BECAUSE HON. BOMBAY HIGH COURT WAS GUIDED BY ITS OW N JUDGMENT RENDERED IN THE CASE OF AJANTA PHARMA LTD., (SUPRA) AND THAT DE CISION OF HON BOMBAY HIGH COURT WAS REVERSED BY HON APEX COURT. AS AGAINST T HIS, THE JUDGMENT OF KERALA HIGH COURT IS SQUARELY APPLICABLE IN THE PRESENT CA SE. WE FEEL THAT THE A>O> SHOULD RE-COMPUTE THE BOOK PROFIT AS PER THE ABOVE JUDGMENT OF HONBLE KERALA HIGH COURT AS PER WHICH, IT WAS HELD BY THE HON KER ALA HIGH COURT THAT THE A.O. SHOULD RE-COMPUTE THE BOOK PROFIT BY GRANTING DEDUC TION U/S. 80HHC IN TERMS OF THEIR FINDING WHICH HAS BEEN REPRODUCED BY US ABOVE AND AS PER THE DECISION OF HON APEX COURT RENDERED IN THE CASE OF AJANTA PHARM A LTD. (SUPRA). HENCE, IN THE PRESENT CASE ALSO, WE MODIFY THE DIRECTION GIVE N BY THE LD. CIT IN THIS REGARD AND WE DIRECT THE A.O. TO RE-COMPUTE THE BOOK PROFI T BY GRANTING DEDUCTION U/S. ITA NO.1381/AHD/20 10 ASSESSMENT YEAR 2000-01. 8 80HHC AS PER THE THIS DECISION OF FULL BENCH OF HON BLE KERALA HIGH COURT AND THE A.O. SHOULD ALSO CONSIDER THE JUDGMENT OF HON A PEX COURT IN THE CASE OF AJANTA PHARMA LTD., (SUPRA) AND THEREAFTER, HE SHOU LD DECIDE AND RE-COMPUTE THE BOOK PROFIT OF THE ASSESSEE AND PASS NECESSARY ORDER AS PER THE ABOVE DISCUSSION AFTER PROVIDING OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE. 9. IN THE RESULT, ASSESSES APPEAL STAND S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 27 05 - 2011. SD/- SD/- (D.K. TYAGI) (A. K. GARODIA) JUDICIAL MEMBER. A CCOUNTANT MEMBER. AHMEDABAD. DATED: 27 - 05 - 2011. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT-L, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR.,ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. ITA NO.1381/AHD/20 10 ASSESSMENT YEAR 2000-01. 9 1.DATE OF DICTATION 4 - 5 -2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 5 / 5 / 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 6 -5 -2011. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 27 -5 -2011 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 27 - 5 -2011 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2 7 - 5 -2011. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..