PAHILAJRAI JAIKISHIN, MUMBAI V. JCIT RG 19(3), MUMBAI

ITA 1398/MUM/2012

• Counselvise Citation: 139819914 RSA 2012
• Duration Of Justice: 1 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 29-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR P DANIEL; M P MAKHIJA IZRFKHZ DH LS
• Keywords: Business income; Retrospective amendment; Reasonable cause
• Section: 80HHC; 28

Judgement Text

PAHILAJRAI JAIKISHIN - 1 - VK;DJ VIHYH; VF/KDJ.K LH U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI JH ,P- ,Y- DKJOK] V/;{K ,OA JH JKTSUNZ FLAG YS[KK L NL; DS LE{K BEFORE HONBLE PRESIDENT SHRI H.L. KARWA AND SHRI R AJENDRA SINGH ACCOUNTANT MEMBER VK;DJ VIHY LA[;K /ITA NO.1398/MUM/2012 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR: - 2004-05 PAHILAJRAI JAIKISHIN MAKHIJA CHAMBERS, 6 TH FLOOR, 196, TURNER ROAD, BANDRA (W) MUMBAI 400 050 CUKE@ VS. JOINT COMMISSIONER OF INCOME TAX, RANGE 19(3) 3 RD FLOOR, PIRAMAL CHAMBER, PAREL, MUMBAI 400 012. PAN:- AAAFP1242K VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT VIHYKFKHZ DH VKSJ LS @ APPELLANT BY SHRI DR. P. DANIEL & SHRI M.P. MAKHIJA IZR;FKHZ DH VKSJ LS @ RESPONDENT BY SHRI UDAYA BHASKAR JAKKE VKNS'K@ VKNS'K@ VKNS'K@ VKNS'K@ ORDER PER RAJENDRA SINGH THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 17.7.2007 OF CIT(A) FOR THE ASSESSMENT YEAR 2004-05. THE ONLY DISPUTE RAISED IN THIS APPEAL IS REGARDING ALLOWABILITY OF CLA IM OF DEDUCTION IN RESPECT OF DEPB INCOME. 2. THE APPEAL IS HOWEVER DELAYED BY 1598 DAYS. THE A PPEAL WHICH WAS DUE TO BE FILED WITHIN THE STATUTORY TIME LIMIT OF 60 DAYS FROM THE DATE OF RECEIPT OF ORDER OF CIT(A), HAS BEEN FILED BY THE ASSESSEE ONLY ON LQUOKBZ DH RKJH[K @ DATE OF HEARING 26-08-2013 ?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT 28-08-2013 PAHILAJRAI JAIKISHIN - 2 - 29.2.2012. THE ASSESSEE HAS FILED CONDONATION APPLI CATION REQUESTING FOR CONDONATION OF DELAY. THE ASSESSEE IN THE CONDO NATION APPLICATION HAS SUBMITTED THAT CLAIM OF THE ASSESSEE HAD BEEN RE JECTED BY THE AO IN VIEW OF THE RETROSPECTIVE AMENDMENT MADE TO SECTI ON 80HHC OF THE TAXATION LAWS AMENDMENT ACT 2005. IT HAS ALSO BEEN SUBMITTED THAT APPELLATE AUTHORITIES WERE ALSO NOT ALLOWING CLAIM IN RESPECT OF DEPB INCOME AND THE ASSESSEE HAD, THEREFORE, BEEN ADVISED THAT NO PURPOSE WILL BE SERVED IN FILING THE APPEAL BEFORE THE TRIBUN AL. HOWEVER THE POSITION WAS MADE CLEAR BY THE JUDGMENT OF HONBLE SUPREME COURT IN CASE OF TOPMAN EXPORTS LTD DATED 8.2.2012 (342 ITR 4 9) AFTER WHICH THE ASSESSEE WAS ADVISED TO FILE THE APPEAL WHICH W AS THE REASON FOR LONG DELAY AND ACCORDINGLY IT HAS BEEN REQUESTED THAT THE DELAY MAY BE CONDONED. 2.1 THE LEARNED AR FOR THE ASSESSEE SUBMITTED THAT T HERE WAS NO LACK OF DUE DILIGENCE IN FILING OF THE APPEAL AND THE DE LAY WAS NOT DELIBERATE. THEREFORE, THE DELAY WAS REQUIRED TO BE CONDONED. REL IANCE WAS PLACED ON THE JUDGMENT OF HONBLE HIGH COURT OF BOMBAY IN CASE OF REMEX CONSTRUCTION/REMEX ELECTRICALS V/S ITO AND OTHERS ( 166 ITR 18) IN WHICH DELAY OF THREE YEARS HAS BEEN CONDONED. REFERENC E WAS ALSO MADE TO THE RECENT DECISION DATED 8.2.2013 OF THE KO LKATA BENCH OF TRIBUNAL IN CASE OF MAGNUM EXPORTS VS. ACIT IN ITA NO. 1111/KOL/2012 IN WHICH UNDER SIMILAR SITUATION THE BE NCH HAD CONDONED THE DELAY OF 2078 DAYS IN FILING THE APPEA L. THE LEARNED DR HAD NO SERIOUS OBJECTION IN THE MATTER. 2.2 WE HAVE PERUSED THE RECORDS AND CONSIDERED MATTER CAREFULLY. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE SATISFIED THAT THERE WAS REASONABLE CAUSE FOR DELAY IN FILING T HE APPEAL. WE, THEREFORE, IN THE INTEREST OF JUSTICE, CONDONE THE DEL AY AND ADMIT THE APPEAL FOR ADJUDICATING THE DISPUTE. PAHILAJRAI JAIKISHIN - 3 - 3. COMING TO THE MERITS OF THE CASE, THE ONLY DISPUT E RAISED IN THIS APPEAL IS REGARDING ALLOWABILITY OF CLAIM OF DEDUCTI ON U/S 80HHC IN RESPECT OF DEPB INCOME. THE ASSESSEE HAD DEPB INCOME OF RS. 3,81,34,020/- IN RESPECT OF WHICH DEDUCTION U/S 80HH C HAD BEEN CLAIMED. THE ASSESSEE SUBMITTED BEFORE THE AO THAT T HE AMENDMENT MADE BY FINANCE ACT 2005 HAD BEEN CHALLENGED AND TH E MATTER WAS PENDING BEFORE THE HONBLE SUPREME COURT. IT WAS THUS REQUESTED THAT THE CLAIM MAY BE ALLOWED. THE AO HOWEVER REJECTED THE CLAIM OF THE ASSESSEE AND DID NOT ALLOW THE DEDUCTION U/S 80HHC. IN APPEAL CIT(A) CONFIRMED THE ORDER OF AO, AGGRIEVED BY WHICH THE ASS ESSEE IS IN APPEAL BEFORE TRIBUNAL. 3.1 BEFORE US LEARNED AR FOR THE ASSESSEE SUBMITTED T HAT PENDING THE VALIDITY OF RETROSPECTIVE AMENDMENT TO SECTION 80HH C BY THE FINANCE ACT, THE HONBLE SUPREME COURT HAVE DELIVERED A JUDGM ENT IN CASE OF TOPMAN EXPORTS LTD (342 ITR 49) REGARDING THE ALLOWABI LITY OF CLAIM IN RELATION TO DEPB INCOME. IT WAS, THEREFORE, REQUESTED THAT THE AO MAY BE DIRECTED TO RECOMPUTE THE DEDUCTION U/S 80HHC IN THE LIGHT OF SAID DECISION. THE LEARNED DR ON THE OTHER HAND PLACED REL IANCE ON THE ORDERS OF AUTHORITIES BELOW. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE MATT ER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABILITY OF C LAIM OF DEDUCTION IN RELATION TO DEPB INCOME. THE SPECIAL BENCH OF TRIBUNA L IN CASE OF TOPMAN EXPORTS LTD.(33 SOT 337) HAD EARLIER HELD THA T FACE VALUE OF DEPB HAS TO BE CONSIDERED AS BUSINESS INCOME U/S 28( III B) AND IN CASE OF SALE THE EXCESS OF SALE PRICE OVER THE FACE VALUE HAS TO BE CONSIDERED AS BUSINESS PROFIT U/S 28(III D) AND DEDUC TION U/S 80HHC HAD TO BE COMPUTED ACCORDINGLY. THE SAID DECISION O F TRIBUNAL HAS HOWEVER NOT BEEN UPHELD BY HONBLE HIGH COURT OF BOMB AY IN CASE OF CIT VS. KALPATARU COLOURS & CHEMICALS LTD.(328 ITR 451) IN WHICH IT WAS HELD THAT THE ENTIRE DEPB INCOME INCLUDING THE F ACE VALUE HAS TO PAHILAJRAI JAIKISHIN - 4 - BE CONSIDERED AS A PROFIT U/S 28(III D). HOWEVER THE HONBLE SUPREME COURT RECENTLY IN CASE OF TOPMAN EXPORTS LTD. (SUPRA) HAVE NOT UPHELD THE VIEW TAKEN BY THE HONBLE HIGH COURT OF BOMBAY AND HAVE CONFIRMED THE ORDER PASSED BY SPECIAL BENCH OF TRIBUNA L ON THIS ISSUE, AS PER WHICH THE FACE VALUE OF DEPB HAS TO BE CONSI DERED AS INCOME U/S 28 (IIIB) AND EXCESS OF SALE PRICE OVER THE FACE VALUE HAS TO BE CONSIDERED AS PROFIT U/S 28(III D). THE DEDUCTOR U/S 80HHC IS, THEREFORE, REQUIRED TO BE COMPUTED ACCORDINGLY. WE, THERE FORE, SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE AO TO RE COMPUTE T HE DEDUCTION U/S 80HHC IN RESPECT OF DEPB INCOME IN THE LIGHT OF JUD GMENT OF HONBLE SUPREME COURT IN CASE OF TOPMAN EXPORTS LTD (SUPRA). 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28-8-2013 SD/- SD/- (H.L. KARWA) (RAJENDRA SINGH) HONBLE PRESIDENT ACCOUNTANT MEMBER SKS SR. P.S, MUMBAI DATED 28.8.2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI