NIKHIL J. SHAH HUF, MUMBAI V. ACIT 13(3), MUMBAI

ITA 1392/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0147 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 28-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T A KHAN
• Keywords: Business income; Application of stay
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER ITA NO. 1392/MUM/2017 : A.Y : 2011 - 12 NIKHIL J SHAH HUF 20, NAGIN MAHAL, 82, V.N. ROAD, CHURCHGATE, MUMBAI 400 020. PAN : AAAHN3226M (APPELLANT) VS. ACIT - 13(3), MUMBAI (RESPONDENT) SA NO. 34/MUM/2018 (IN ITA NO. 1392/MUM/2017) : A.Y : 2011 - 12 NIKHIL J SHAH HUF 20, NAGIN MAHAL, 82, V.N. ROAD, CHURCHGATE, MUMBAI 400 020. PAN : AAAHN3226M (APPLICANT) VS. ACIT - 17(2), MUMBAI (RESPONDENT) APPLICANT BY : SHRI NISHANT THAKKAR & MS. JASMIN AMALSADVALA RESPONDENT BY : SHRI T.A. KHAN DATE OF HEARING : 09/03/2018 DATE OF PRONOUNCEMENT : 09/03/2018 O R D E R PER G.S. PANNU , AM : WHEN THE STAY APPLICATION OF THE ASSESSEE WAS CALLED OUT, IT WAS BROUGHT OUT THAT THE ISSUE RAISED IN APPEAL RELATING TO PARTIAL DENIAL OF 2 NIKHIL J SHAH HUF ITA NO. 1392/MUM/2017 & SA NO. 34/MUM/2018 ASSESSEES CLAIM OF DEDUCTION U/S 10B OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) STANDS ON AN IDENTICAL FOOTING AS WAS CONSIDERED BY THE TRIBUNAL ON AN EARLIER OCCASION IN ASSESSEES OWN CASE IN RELATION TO ASSESSMENT YEAR 2009 - 10. THUS, WITH THE CONVERGENCE OF BOTH THE SIDES, THE CAPTIONED APPEAL WAS TAKEN UP FOR HEARING. 2. NOTABLY, THE SOLITARY ISSUE IN THIS A PPEAL ARISES FROM THE ACTION OF THE ASSESSING OFFICER IN DENYING ASSESSEES CLAIM FOR DEDUCTION U/S 10B OF THE ACT WITH RESPECT TO THE FOLLOWING COMPONENTS OF INCOME : - PARTICULARS AMOUNT DUTY DRAWBACK 17,07,191 EXCISE REFUND 63,93,411 SALES TAX REFUND 25,39,490 GAIN ON FORWARD CONTRACT 7,70,807 INTEREST ON FDR 3,34,975 TOTAL 1,17,45,874 3. WE FIND THAT THE ASSESSING OFFICER AS WELL AS THE CIT(A) DENIED THE DEDUCTION U/S 10B OF THE ACT IN RELATION TO THE AFORESAID INCOMES PRIMARILY ON THE GROUND THAT SUCH INCOMES CANNOT BE SAID TO HAVE BEEN DERIVED FROM EXPORT OF GOODS. SIMILAR REASONING WAS TAKEN BY THE INCOME - TAX AUTHORITIES IN ASSESSMENT YEAR 2009 - 10 ALSO IN DENYING ASSESSEES CLAIM FOR DEDUCTION U/S 10B OF THE ACT IN RELATION TO SUCH - LIKE INCOMES. THE TRIBUNAL IN ITS ORDER FOR ASSESSMENT YEAR 2009 - 10 IN ITA NO. 4404/MUM/2013 DATED 08.03. 2018 FOUND THAT ONCE THE ASSESSING OFFICER HAD ASSESSED AN INCOME AS FORMING PART OF BUSINESS INCOME OF THE UNDERTAKING, THEREAFTER SUCH AN INCOME COULD NOT BE EXCLUDED FOR THE PURPOSE OF COMPUTING THE DEDUCTION U/S 10B 3 NIKHIL J SHAH HUF ITA NO. 1392/MUM/2017 & SA NO. 34/MUM/2018 OF THE ACT. NOTABLY, THE CONCLUSI ON OF THE TRIBUNAL WAS BASED ON THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MARAL OVERSEAS LTD. VS ADDL. COMMISSIONER OF INCOME TAX, (2012) 016 ITR (TRIB) 0565 (INDORE) AND THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF RI VIERA HOME FURNISHING VS ADDL. COMMISSIONER OF INCOME TAX, ITA NO. 459/2015 DATED 19.11.2015. 4. IN THIS BACKGROUND, IN THE INSTANT YEAR ALSO, WE HAVE EXAMINED THE ASSESSMENT ORDER AND FIND THAT WHILE THE ASSESSING OFFICER DISENTITLES THE ASSESSEE FROM TH E CLAIM OF DEDUCTION U/S 10B OF THE ACT IN RELATION TO THE AFORESAID FIVE ELEMENTS OF INCOME AMOUNTING TO RS.1,17,45,874/ - , YET WHILE FINALISING THE ASSESSMENT, SUCH INCOMES HAVE BEEN ASSESSED AS A PART OF BUSINESS INCOME OF THE ELIGIBLE UNDERTAKING. ON CE SUCH FACTUM EMERGES, THE RATIO OF THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MARAL OVERSEAS LTD. VS ADDL. COMMISSIONER OF INCOME TAX (SUPRA) AS WELL AS THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF RIVIERA HOME FURNIS HING VS ADDL. COMMISSIONER OF INCOME TAX (SUPRA) CLEARLY COMES INTO OPERATION AND ASSESSEES ENTITLEMENT FOR CLAIM OF DEDUCTION U/S 10B OF THE ACT IN RELATION TO SUCH INCOMES CANNOT BE FAULTED. THERE IS NO DENIAL TO THE AFORESAID FACTUAL MATRIX BY THE REV ENUE BEFORE US AND, THEREFORE, FOLLOWING THE AFORESAID DISCUSSION, WE SET - ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO INCLUDE THE AFORESAID ELEMENTS OF INCOME FOR THE PURPOSE OF COMPUTING DEDUCTION U/S 10B OF THE ACT AS HE HAS ASSESSE D THE SAME AS PART OF BUSINESS INCOME. 4 NIKHIL J SHAH HUF ITA NO. 1392/MUM/2017 & SA NO. 34/MUM/2018 5. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED AND CONSEQUENTLY, THE CORRESPONDING STAY APPLICATION IS RENDERED INFRUCTUOUS, WHICH IS HEREBY DISMISSED. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN COURT IN THE PR ESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING ON 9 TH MARCH, 2018. SD/ - SD/ - ( SANDEEP GOSAIN ) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 9 T H MARCH, 201 8 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, B BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI