Shakti Polyweave Pvt.Ltd., Ahmedabad V. The CIT-IV, Ahmedabad

ITA 1403/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76735 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 16-05-2011
• Court: TRIBUNAL
• Department Lawyers: JAGDISH
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Business income; Reassessment proceedings
• Section: 143(3); 80HHC; 80IB; 147; 263

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD 0 00 0 0 00 0 , , , , !'# !$ !'# !$ !'# !$ !'# !$0 00 0! !! !0 00 0 %$ %$ %$ %$, , , , &' ( &' ( &' ( &' ( & & & & BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO. 1403/AHD/2011 ASSESSMENT YEAR: 2003-04 SHAKTI POLYWEAVE PVT. LTD. 801, NARNARAYAN COMPLEX, NR. SWASTIK CHAR RASTA, NAVRANGPURA, AHMEDABAD. PAN: AACCS1107M VS COMMISSIONER OF INCOME TAX-IV, AHMEDABAD. )*/ APPELLANT ,-)* / RESPONDENT REVENUE BY : SHRI JAGDISH, SR. DR ASSESSEE(S) BY : SHRI SUNIL H. TALATI, AR $'. / 0'/ // / DATE OF HEARING : 29/05/2014 123 / 0' / DATE OF PRONOUNCEMENT : 06/06/2014 &4 &4 &4 &4/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX, AHMEDABAD DATED 25.03.2 011. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF AP PEAL: 1. THE APPELLANT SUBMITS THAT THE ID. C.I.T. HAS ER RED IN LAW AND ON FACTS BY INITIATING PROCEEDINGS U/S. 263 OF THE I.T. ACT, 1961 IGNORING THE FACTS THAT THE TWO ASSESSING OFFICERS ITA NO. 1403/AHD/2011 SHAKTI POLYWEAVE PVT. LTD. AY 2003-04 - 2 - IN THEIR SEPARATE ASSESSMENT ORDERS HAD CONSIDERED ALL FACTS OF THE CASE AND NARRATED THESE FACTS IN THEIR ASSESSMENT ORDERS PASSED U/S. 143 (3) OF THE I. T. ACT, 1961 AND U/S. 143(3) R. W. S. 147 OF THE I. T. ACT, 1961 DATED 28.10.2005 AND 24.12.2008 RESPECTIVELY. THE APPELLANT, THEREFORE, SUBMITS THAT INITIATION OF PR OCEEDINGS U/S. 263 OF THE I. T. ACT IS INCORRECT AND BE CANCE LLED. 2. THE APPELLANT SUBMITS THAT THE ID. C.I.T. HAS GR OSSLY ERRED IN LAW AND ON FACTS BY PASSING ORDER U/S. 263 OF TH E I. T. ACT, 1961 AND BY CONCLUDING IN ITS ORDER REGARDING MODE OF COMPUTATION FOR DETERMINING AMOUNT OF DEDUCTION U/S . 80 HHC AND U/S. 80 I A OF THE I. T. ACT, 1961. THE APP ELLANT SUBMITS THAT ALLOWABLE' AMOUNT AS WORKED OUT BY APPELLANT AND ACCEPTED BY THE ASSESSING OFFICER BE UPHELD. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2003-04 ON 13.11.2003 DECLARING TOTAL INCOME O F RS 24,49,573/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S. 143 (3) ON 28.10.2005 ACCEPTING THE RETURNED INCOME. THEREAFTER REASSESS MENT ORDER WAS PASSED ON 24.12.2008 U/S. 143(3) READ WITH SECTION 147 OF THE I.T. ACT WHEREIN THE ASSESSING OFFICER ALLOWED THE CLAIM OF DEDUCTION U/ S. 80HHC AND 80IB OF THE ACT AS CLAIMED BY THE ASSESSEE. ON PERUSAL OF RECO RD, THE COMMISSIONER OF INCOME TAX OBSERVED THAT THE ASSESSING OFFICER ALLO WED DEDUCTION U/S.80HHC WITHOUT REDUCING THE PROFIT OF THE BUSINE SS WHICH WAS ALLOWED U/S.80IB OF THE I.T. ACT, RELYING ON THE DECISION O F THE SUPREME COURT AND SOME HIGH COURTS. THE DECISION OF HON'BLE SUPREME C OURT ON WHICH THE ASSESSING OFFICER RELIED IS GIVEN IN THE CONTEXT OF SECTION 80HH & 80I. SUB- SECTION (9) OF SECTION 80IA SAYS 'WHERE ANY AMOUNT OF PROFITS & GAINS OF AN UNDERTAKING OR OF AN ENTERPRISE IN THE CASE OF AN A SSESSEE IS CLAIMED AND ALLOWED UNDER THIS SECTION FOR ANY ASSESSMENT YEAR, TO THE EXTENT OF SUCH PROFITS AND GAINS SHALL NOT BE ALLOWED UNDER ANY OT HER PROVISIONS OF THIS CHAPTER UNDER THE HEADING C DEDUCTION IN RESPECT OF CERTAIN INCOMES' AND SHALL IN NO CASE EXCEED THE PROFITS & GAINS OF SUCH ELIGIBLE BUSINESS OF ITA NO. 1403/AHD/2011 SHAKTI POLYWEAVE PVT. LTD. AY 2003-04 - 3 - UNDERTAKING OR ENTERPRISE AS THE CASE MAY BE'. THE COMMISSIONER OF INCOME TAX OBSERVED THAT THE PROVISIONS OF SECTION 80IA(9) HAVE BEEN INSERTED WITH EFFECT FROM 1/4/1999 AND, THUS, ARE APPLICABLE FROM THE ASSESSMENT YEAR 1999-2000, WHILE JUDGEMENT OF HON'BLE SUPREME COURT ON WHICH THE ASSESSING OFFICER RELIED IS IN CONTEXT OF SECTION 8 0HH & 80I, HENCE APPARENTLY APPEARS TO BE NOT APPLICABLE. HE FURTHE R OBSERVED THAT HON'BLE ITAT, CHENNAI BENCH IN THE CASE OF ACIT VS. ROGINI GARMENTS - 108 ITD 49 - HAS HELD 'IN VIEW OF THE SPECIFIC RESTRICTION PROVI DED U/S,80IA(9), RELIEF U/S.80IA SHOULD BE DEDUCTED FROM THE PROFITS & GAIN S OF BUSINESS BEFORE COMPUTING RELIEF U/S.80HHC.' IN VIEW OF THIS DECISI ON, THE COMMISSIONER OF INCOME TAX CONCLUDED THAT THE ASSESSING OFFICER APP EARS TO HAVE WRONGLY COMPUTED DEDUCTION U/S.80HHC WITHOUT REDUCING THE P ROFIT OF UNDERTAKING WHICH WAS ALLOWED AS A DEDUCTION U/S.80IB AND THERE FORE, IN THE OPINION OF THE COMMISSIONER OF INCOME TAX, THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF RE VENUE. 4. THEREFORE, A SHOW CAUSE NOTICE U/S. 263 WAS ISS UED TO THE ASSESSEE. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED A WRITTEN SUBMISSION. AFTER CONSIDERING THE SAME, THE COMMISSIONER OF INC OME TAX HELD AS UNDER: 5. I HAVE CAREFULLY CONSIDERED THE ORAL ARGUMENTS AS WELL AS THE WRITTEN SUBMISSIONS OF THE A.R., BUT THE SAME ARE N OT FOUND SATISFACTORY. THE CONTENTION OF THE ASSESSEE AS WE LL AS THE A.O. THAT THE ASSESSEES CASE IS COVERED BY HONBLE SUPREME C OURTS DECISION IN THE CASE OF JCIT VS. MANDIDEEP ENGINEERING & PACKAG ING PVT. LTD. (2007) 292 ITR 1 IS NOT CORRECT. THE HONBLE SUPRE ME COURTS DECISION IS GIVEN IN THE CONTEXT OF SECTION 80HH AN D 80I WHILE IN THE PRESENT CASE, THE CLAIM OF THE ASSESSEE IS U/S. 80H HC AND 80IB. THEREFORE, THE FACTS OF BOTH THE CASES ARE DIFFEREN T. IN THE RELIED CASE, HONBLE SUPREME COURT HAS HELD THAT 80HH & 801 ARE INDEPENDENT OF EACH OTHER AND THEREFORE A NEW INDUSTRIAL UNIT CAN CLAIM DEDUCTION UNDER BOTH THE SECTIONS ON THE GROSS TOTAL INCOME I NDEPENDENTLY. THE AO ALSO RELIED UPON THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF ISABGUL PROCESSING CO, -171 CTR 106 (252 IT R 777), BUT THAT DECISION IS ALSO NOT HELPFUL TO THE ASSESSEE BECAUS E THIS DECISION HAS BEEN GIVEN IN THE CONTEXT OF CLAIM U/S.80HH & 80J O F THE IT ACT. THE AO ALSO RELIED UPON THE DECISION OF HON'BLE BOMBAY HIGH COURT REPORTED IN THE CASE OF NIMA SPECIFIC FAMILY TRUST 165 CTR 518 AND ITA NO. 1403/AHD/2011 SHAKTI POLYWEAVE PVT. LTD. AY 2003-04 - 4 - RAJASTHAN HIGH COURT DECISION IN THE CASE OF CIT VS . CHOKSI CONTACTS 166 CTR 383. BOTH THE DECISIONS HAVE BEEN GIVEN IN THE CONTEXT OF SECTION 80HH & 80I AND ACCORDINGLY NOT APPLICABLE I N THE PRESENT CASE. THE ISSUE INVOLVED IN THIS CASE HAS BEEN COVERED BY THE DECISION OF ITAT SPL. BENCH, CHENNAI REPORTED IN 108 ITD 49. TH E RELEVANT PART OF THE DECISION IS REPRODUCED AS UNDER:- 'WITH A VIEW TO PROVIDE SUITABLE STATUTORY SAFEGUAR DS FOR THE I.T. ACT 1961, AND TO PREVENT TAX PAYERS FROM TAKING UNDUE A DVANTAGE OF EXISTING PROVISIONS OF THE ACT BY CLAIMING REPEATED DEDUCTIONS IN RESPECT OF THE SAME AMOUNT OF ELIGIBLE INCOME, INBU ILT RESTRICTION IN SECTION 80IA WAS PROVIDED BY AMENDING THE SECTION, SO THAT UNINTENDED BENEFITS MAY NOT BE PASSED ON TO THE ASS ESSES. THIS IS A SPECIAL PROVISION AND A SPECIAL PROVISION PREVAILS OVER THE GENERAL PROVISION. IN VIEW OF THE SPECIFIC RESTRICTIONS PRO VIDED U/S.80IA(9), THE DEFINITION OF BUSINESS PROFIT AS CONTAINED IN CLAUS E B(AA) OF EXPLANATION TO SECTION 80HHC(4C) HAS TO BE CONSTRUED IN THE LIG HT OF THE RESTRICTIONS. IF RESPECTIVE CLAUSE, NOT IN THE SAME SECTION BUT IN OTHER PROVISION, IS CLEARLY SHOWING THE MENS LEGI, IT HAS TO BE GIVEN FULL EFFECT. THEREFORE, IF RESTRICTION IS PLACED ON THE CLAIM OF REPETITIVE DEDUCTIONS IN SECTION 80IA(9), AND IS MADE APPLICAB LE IN RESPECT OF DEDUCTIONS UNDER CHAPTER VIA, THEN THIS RESTRICTION IS TO BE APPLIED. SINCE THE WORDINGS USED ARE 'ANY OTHER DEDUCTION UN DER CHAPTER VIA' FULL EFFECT IS TO BE GIVEN TO THIS PROVISION AND WH ENEVER AN ASSESSEE WANTS TO CLAIM DEDUCTION U/S. 80IA(9) IS TO BE READ IN EVERY OTHER PROVISION PROVIDING FOR DEDUCTION UNDER CHAPTER VIA . APROPOS THE ARGUMENTS THAT THE PROVISION IS COUCHED WITH AMBIGU ITIES, AND THEREFORE, THE SPIRIT OF THE ACT IS TO BE SEEN AND JUSTICE BE DONE, IT IS FOUND THAT THE FREEDOM FOR THE SEARCH OF THE SPIRIT OF THE ACT OR THE MISCHIEF AT WHICH IT IS AIMED OPENS THE POSSIBILITY OF LIBERAL INTERPRETATION. THIS FINER ASPECT CANNOT BE NARROWL Y WATCHED. IT IS THAT DELICATE AND IMPORTANT BRANCH OF JUDICIAL POWER, TH E CONCESSION OF WHICH IS DANGEROUS. DENIAL IS DISASTROUS. THE INTEN TION OF LEGISLATURE IS A VERY SLIPPERY PHASE. WHEN THE LANGUAGE OF THE STA TUTE IS TRANSPARENTLY PLANNED, IT IS WRONG TO GIVE IT COLOU R ACCORDING TO THE TEMPER OF TIME. WHEN THE LANGUAGE EMPLOYED BY THE ENACTMENT IS CLEA R, THERE IS NO QUESTION OF INTERPRETING THE PROVISIONS IN ANY MANN ER EXCEPT BY GIVING THEM VERY PLANNED AND OBVIOUS MEANING. NEBULOUS CON CEPT OF THE LEGISLATIVE INTENT CANNOT BE USED TO CURTAIL THE EX PLICIT PROVISION IN A STATUTE. A STATUTE OR ANY ENACTING PROVISIONS THERE IN MUST BE SO CONSTRUED SO AS TO MAKE IT EFFECTIVE AND OPERATIVE ON THE PRINCIPAL EXPRESSION IN THE MAXIM, UT RES MAGIS VALEAT QUAM T EREAT. THERE IS NO SCOPE FOR IMPORTING INTO STATUTE THE MEANING WHICH IS ALIEN TO IT. A STATUTE IS THE EDICT OF THE LEGISLATURE AND THE DUT Y OF THE JUDICATURE IS TO ACT UPON SENTETIA LEGIS. THERE IS NO ESTOPPLE AG AINST THE STATUTE. CIRCULAR NO.772 DATED 23RD DECEMBER 1998 NOWHERE SU GGESTS THAT MORE THAN 100% DEDUCTION ON THE SAME PROFIT CAN BE GRANTED TO THE ASSESSEE UNDER VARIOUS SECTIONS ENUMERATED IN CHAPT ER VIA. THE ITA NO. 1403/AHD/2011 SHAKTI POLYWEAVE PVT. LTD. AY 2003-04 - 5 - RESTRICTIVE CLAUSE IN SECTION 80IA MAKES IT ABUNDAN TLY CLEAR THAT WHEREVER DEDUCTION UNDER ANY OTHER SECTION OF CHAPT ER VIA(C) IS CLAIMED, THE COMPUTATION WILL BE SUBJECT TO THE RES TRICTIONS LAID DOWN IN SECTION 80IA(9). IT PRECLUDES PROTANTO, ALL THE DEDUCTIONS OF SUCH PROFITS AND GAINS CLAIMED UNDER CHAPTER VIA(C). SEC TION 80HHC IS PART OF CHAPTER VIA(C) AND IT IS NOT A SELF-CONTAINED PR OVISION. THERE IS ABSOLUTELY NO AMBIGUITY OF THIS ASPECT. THEREFORE, RELIEF U/S.80IA SHOULD BE DEDUCTED FROM THE PROFITS AND GAINS OF TH E BUSINESS BEFORE COMPUTING RELIEF U/S.80HHC.' 6. ITAT SPL. BENCH, DELHI IN THE CASE OF ACIT VS. H INDUSTAN MINT & AGRO PRODUCTS P. LTD., REPORTED IN 119 ITD 107 HAS ALSO HELD THAT 'IN VIEW OF THE PROVISIONS OF SECTION 80IA(9) DEDUCTION U/S.80HHC IS TO BE ALLOWED ON PROFITS AND GAINS AS REDUCED BY THE DEDU CTION CLAIMED AND ALLOWED U/S.80IB/80IA' THE ABOVE SPL BENCH DECISION HAS BEEN AFFIRMED BY THE DELHI HIGH COURT IN THE CASE OF GRE AT EASTERN EXPORTS VS. CIT 237 CTR 264(DELHI). 7. HON'BLE KERALA HIGH COURT IN THE CASE OF OLAM EX PORTS (INDIA) LTD., VS. CIT HAS HELD THAT 'BY VIRTUE OF SPECIFIC EXCLUS ION U/S. 80IB(13) R.W.S. 80IA(9) THE ASSESSEE IS NOT ENTITLED TO SIMU LTANEOUS DEDUCTION OF BOTH U/S.80IB & 80HHC. WHILE COMPUTING DEDUCTION U/S.80HHC, DEDUCTION U/S.80IB HAS TO BE EXCLUDED.' 8. IN VIEW OF THE ABOVE JUDICIAL DECISIONS, IT IS C RYSTAL CLEAR THAT DEDUCTION U/S.80HHC HAS TO BE COMPUTED AFTER REDUCI NG THE DEDUCTION ALLOWED U/S.80IB/80IA. HOWEVER, IN THE PRESENT CASE , THE ASSESSING OFFICER HAS ALLOWED DEDUCTION U/S.80HHC WITHOUT RED UCING THE DEDUCTION ALLOWED U/S.80IB AND ACCORDINGLY SUCH ORD ER PASSED BY HIM IS APPARENTLY ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF REVENUE. 9. DURING THE COURSE OF HEARING, THE A.R. FURTHER P RODUCED A COPY OF BOMBAY HIGH COURT DECISION IN THE CASE OF ASSOCIATE D CAPSULES (P) LTD VS. DCIT 236 CTR 408 AND CONTENDED THAT HON'BLE BOM BAY HIGH COURT HAS OVER-RULED THE SPL CHENNAI'S DECISION IN THE CA SE OF ROGINI GARMENTS. HE HAS ALSO CONTENDED THAT COURT HAS CO NSIDERED THE DECISION OF SPL BENCHES, DELHI HIGH COURT'S DECISIO N AND KERALA HIGH COURT'S DECISION AND THEREAFTER HELD THAT 'SECTION 801 A(9) DOES NOT AFFECT THE COMPUTABILITY OF DEDUCTION UNDER VARIOUS PROVISIONS UNDER HEADING CHAPTER VIA, BUT IT AFFECTS THE ALLOWABILIT Y OF DEDUCTIONS COMPUTED UNDER VARIOUS PROVISIONS UNDER HEADING C' OF CHAPTER VI-A SO THAT THE AGGREGATE DEDUCTION U/S. 80IA AND OTHER PROVISIONS UNDER HEADING 'C' OF CHAPTER VI-A SO THAT THE AGGREGATE D EDUCTION U/S. 80IA AND OTHER PROVISIONS UNDER HEADING C OF CHAPTER V I-A DO NOT EXCEED 100% OF THE PROFITS OF BUSINESS OF THE ASSESSEE.... ......' 10. IN VIEW OF THE ABOVE DECISIONS, THE FACTS IN TH E PRESENT CASE ARE TO BE RE-EXAMINED AND FRESH DECISION IS REQUIRED TO BE TAKEN. IN THE PRESENT CASE, THE ORDER PASSED BY THE ASSESSING OFF ICER IS ERRONEOUS ITA NO. 1403/AHD/2011 SHAKTI POLYWEAVE PVT. LTD. AY 2003-04 - 6 - AND PREJUDICIAL TO THE INTEREST OF REVENUE IN VIEW OF THE DECISION OF SPL BENCHES AS WELL AS DELHI & KERALA HIGH COURTS DECIS IONS (SUPRA). THEREFORE, THE ORDER OF A.O. TO THE EXTENT OF ALLOW ANCE OF DEDUCTION U/S.80HHC IS SET ASIDE WITH THE DIRECTION TO RE-EXA MINE THE ISSUE IN LIGHT OF ABOVE DECISIONS OF HIGH COURTS AND TAKE A FRESH DECISION AS PER LAW. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD . IN THE INSTANT CASE, THE ASSESSMENT WAS ORIGINALLY COMPLETED U/S. 143(3) OF THE ACT ON 28.10.2005 WHEREIN THE ASSESSEE WAS ALLOWED DEDUCTION U/S. 80I B AT RS 32,77,522/- AND SECTION 80HHC AT RS 53,82,417/-. WHILE ALLOWING DEDUCTION U/S. 80HHC, THE ASSESSING OFFICER HAS NOT REDUCED THE AMOUNT WH ICH WAS ALLOWED AS DEDUCTION U/S. 80IA FROM THE PROFITS AND GAINS OF BUSINESS OR PROFESSION. THEREAFTER, THE ASSESSING OFFICER INITIATED PROCEED INGS U/S. 147 OF THE ACT AND THE ASSESSEE OBJECTED AGAINST THE INITIATION OF REASSESSMENT PROCEEDINGS AND SUBMITTED THAT DEDUCTION U/S. 80IB AND 80HHC AL LOWED IN THE ORIGINAL ASSESSMENT WERE WITHIN THE PARAMETERS OF LAW AND RE LIED UPON THE DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF JCIT VS. MA NDIDEEP ENGINEERING & PACKAGING (P) LTD. (2007) 292 ITR 1, THE DECISION O F HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIDHPUR ISABGUL PROCES SING CO. (2001) 171 CTR 206, THE DECISION OF HONBLE BOMBAY HIGH COURT IN T HE CASE OF CIT VS NIMA SPECIFIC FAMILY TRUST (2001) 165 CTR 518 AND THE DE CISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. CHOKSHI CONTACTS (P) LTD. (2001) 166 CTR 383. 6. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, TH E ASSESSING OFFICER FOUND THE SUBMISSION OF THE ASSESSEE AS ACC EPTABLE AND THEREFORE, COMPLETED THE REASSESSMENT ON 24.12.2008 BY ASSESSI NG THE TOTAL INCOME AND DEDUCTION ALLOWABLE U/S. 80IB AND 80HHC AT THE VERY SAME FIGURE AT WHICH IT WAS DONE IN THE ORIGINAL ASSESSMENT. ITA NO. 1403/AHD/2011 SHAKTI POLYWEAVE PVT. LTD. AY 2003-04 - 7 - 7. THEREAFTER, THE COMMISSIONER OF INCOME TAX ISSU ED NOTICE U/S. 263 ON 01.03.2011 AS HE CONSIDERED THE ORDER PASSED U/S. 147 AS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVEN UE INSOFAR AS DEDUCTION U/S. 80HHC WAS ALLOWED TO THE ASSESSEE WITHOUT REDUCING DEDUCTION ALLOWED U/S. 80IB FROM BUSINESS INCOME. THE COMMISSIONER OF INC OME TAX OBSERVED THAT THE ISSUE WAS COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF THE MADRAS SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT, CIRCLE-1, TIRUPUR VS. ROGINI GARMENTS (2007) 108 ITD 49 (CHENNAI)(SB) AND OF THE HONBLE DELHI HIGH COURT IN THE CASE OF GREAT EASTERN EXPOR TS VS. CIT 237 CTR 264(DELHI) AND THE HONBLE KERALA HIGH COURT IN THE CASE OF OLAM EXPORTS (INDIA) LIMITED VS. CIT (2011) 332 ITR 40. 8. AS AGAINST THIS, THE ASSESSEE RELIED UPON THE D ECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ASSOCIATED CAPSULE S (P) LTD. VS. DCIT (2011) 332 ITR 42 WHEREIN THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND THE ORDER OF THE ASSESSING OFFICER WAS IN CONFO RMITY WITH THE SAID DECISION. THE COMMISSIONER OF INCOME TAX COULD NOT BRING ANY MATERIAL TO CONTROVERT THE SUBMISSION OF THE ASSESSEE. HE, THE REAFTER, SET ASIDE THE ORDER OF THE ASSESSING OFFICER AND RESTORED THE MAT TER BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION AS UNDER: IN VIEW OF THE ABOVE DECISION, THE FACTS IN THE PRE SENT CASE ARE TO BE RE-EXAMINED AND FRESH DECISION IS REQUIRED TO BE TAKEN. IN THE PRESENT CASE, THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E IN VIEW OF THE DECISION OF SPL BENCHES AS WELL AS DELHI & KERA LA HIGH COURTS DECISIONS (SUPRA). THEREFORE, THE ORDER OF A.O. TO THE EXTENT OF ALLOWANCE OF DEDUCTION U/S. 80HHC IS SET ASIDE WITH THE DIRECTION TO RE-EXAMINE THE ISSUE IN LIGHT OF ABOVE DECISIONS OF HIGH COURTS AND TAKE A FRESH DECISION AS PER LAW. 9. WE FIND THAT IN THE INSTANT CASE, THE ISSUE INV OLVED WAS WHETHER DEDUCTION U/S. 80HHC IS ALLOWABLE TO THE ASSESSEE W ITH REFERENCE TO ITA NO. 1403/AHD/2011 SHAKTI POLYWEAVE PVT. LTD. AY 2003-04 - 8 - BUSINESS INCOME ARRIVED AT AFTER REDUCING DEDUCTION ALLOWED TO THE ASSESSEE U/S. 80IB FROM THE BUSINESS INCOME OR NOT. THE ABO VE ISSUE IS A PURELY LEGAL ISSUE AND NO FRESH INVESTIGATION INTO FACTS WAS REQ UIRED. THEREFORE, IN OUR CONSIDERED VIEW, THE COMMISSIONER OF INCOME TAX WAS NOT JUSTIFIED IN SETTING ASIDE THE ORDER AND DIRECTING FOR INVESTIGA TING THE FACTS AFRESH WITHOUT POINTING OUT ANY SPECIFIC FACT WHICH REQUIR ED FURTHER INVESTIGATION. 10. FURTHER, THE COMMISSIONER OF INCOME TAX COULD NOT POINT OUT HOW THE VIEW ADOPTED BY THE ASSESSING OFFICER WAS N OT A POSSIBLE VIEW IN VIEW OF THE DECISION OF THE HONBLE BOMBAY HIGH COU RT IN THE CASE OF ASSOCIATED CAPSULES (P) LTD. (SUPRA) EITHER ON 24.1 2.2008 I.E. THE DATE ON WHICH ORDER U/S. 147 WAS PASSED OR ON 01.03.2011 I. E. THE DATE ON WHICH NOTICE U/S. 263 WAS ISSUED WHEN THE COMMISSIONER OF INCOME TAX CONSIDERED THE ORDER OF THE ASSESSING OFFICER AS ER RONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 11. IN THE INSTANT CASE, IT IS OBSERVED FROM THE O RDER OF THE COMMISSIONER OF INCOME TAX THAT ON THE ISSUE INVOLV ED, THERE WERE CONTRARY DECISIONS OF THE HIGH COURTS I.E. HONBLE BOMBAY HI GH COURT SUPPORTS THE VIEW ADOPTED BY THE ASSESSING OFFICER AND THE CONTR ARY VIEW WAS ADOPTED BY THE HONBLE DELHI HIGH COURT AND HONBLE KERALA HIG H COURT AND NONE OF THE HIGH COURTS WAS THE JURISDICTIONAL HIGH COURT. IN THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, ON 01.03.2011 IT COULD NOT BE HELD BY THE COMMISSIONER OF INCOME TAX THAT THE VIEW TAKEN BY T HE ASSESSING OFFICER WAS NOT A POSSIBLE VIEW AND THEREFORE, UNSUSTAINABL E. IT IS AN ESTABLISHED POSITION OF LAW THAT WHEN TWO VIEWS WERE POSSIBLE I N RESPECT OF AN ISSUE AND THE ASSESSING OFFICER HAS ADOPTED ONE OF THE POSSIB LE VIEWS, SUCH AN ORDER OF THE ASSESSING OFFICER CANNOT BE DEEMED AS ERRONE OUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE FOR WHIC H RELIANCE MAY BE PLACED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. MAX INDIA LIMITED (2007) 295 ITR 282 (SC). THEREFORE, WE SET ASIDE THE ORDER OF ITA NO. 1403/AHD/2011 SHAKTI POLYWEAVE PVT. LTD. AY 2003-04 - 9 - THE COMMISSIONER OF INCOME TAX PASSED U/S. 263 DATE D 25.03.2011 AND ALLOW THE APPEAL OF THE ASSESSEE. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 6 TH OF JUNE, 2014 AT AHMEDABAD. SD/- SD/- (G.C. GUPTA) VICE PRESIDENT ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 30/ 06/6/2014 GHANSHYAM MAURYA, SR. P.S. TRUE COPY &4 / ,5 6&53 &4 / ,5 6&53 &4 / ,5 6&53 &4 / ,5 6&53/ COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. ,-)* / THE RESPONDENT. 3. ## 7 / CONCERNED CIT 4. 7() / THE CIT(A)-III, AHMEDABAD 5. 5': ,$ , , / DR, ITAT, AHMEDABAD 6. ;< =. / GUARD FILE. &4$ &4$ &4$ &4$ / BY ORDER, / // / # # # # ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD