M/s. Epic Exports, Kolkata V. ACIT, Circle - 32, Kolkata, Kolkata

ITA 1415/KOL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75093 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 19-10-2011
• Court: TRIBUNAL
• Department Lawyers: SANJAY MUKHERJEE JDIT
• Keywords: Deemed export
• Section: 10AA; 10B

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 1415/KOL/2011 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2008-09 M/S. EPIC EXPORTS VS. ASSISTANT COMMISSIONER OF INCOME-TAX, (PAN: AAAFE9780D) CIRCLE-32, KOLKATA (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 05.03.2014 DATE OF PRONOUNCEMENT: 13.03.2014 FOR THE APPELLANT: SHRI RAJEEV KUMAR, ADVOCATE FOR THE RESPONDENT: SHRI SANJAY MUKHERJEE, JDIT, SR. DR $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XIX, KOLKATA IN APPEAL NO. 136/CIT(A)-XIX/ACIT,CIR-32/KOL/10-11 DATED 28.07.20 11. ASSESSMENT WAS FRAMED BY ACIT, CIRCLE-32, KOLKATA U/S. 144/143(3) OF THE INCOME-TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008-09 VIDE HIS ORDER D ATED 29.12.2010. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN DISALLOWING DEDUCTION U/S. 10AA OF THE ACT ON JOB WORK/SERVICE CHARGES. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.1: 1. THAT THE LD. CIT(A) ERRED IN NOT ALLOWING DEDUC TION U/S. 10AA OF THE I. TAX ACT OF THE SEZ UNITS INCOME OF THE ASSESSEE ON THE GROUN D THAT INCOME FROM JOB WORK/SRVICES DOES NOT COME UNDER THE PURVIEW OF SEC . 10AA. THE LD. CIT(A) HAS NOT CORRECTLY APPRAISED THE PROVISIONS OF SEC. 10AA OF THE I. TAX ACT CLAIM OF DEDUCTION U/S. 10AA NEED TO BE ALLOWED. 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE STAT ED THAT THE RELEVANT ASSESSMENT YEAR INVOLVED IS 2008-09 AND IN THE IMMEDIATE PRECEDING YEAR I.E. IN AY 2007-08 THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 410/KOL/2011 VIDE OR DER DATED 11.11.2011 ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER: 4. AT THE TIME OF HEARING THE LD. COUNSEL APPEARIN G ON BEHALF OF ASSESSEE HAS CONTENDED THAT THE ONLY REASON FOR REJECTING THE CLAIM OF ASS ESSEE BY THE REVENUE IS THAT NO SALE PROCEEDS OF ASSESSEE COMPANY WERE RECEIVED BY HIM I N CONVERTIBLE FOREIGN EXCHANGE AND THE REVENUE HAS FURTHER OBSERVED THAT THE RECEIPTS TREATED BY THE LD. CIT(A) FOR SUCH UNIT WERE MAINLY ON ACCOUNT OF STITCHING CHARGES OR FINI SHING/ PACKING CHARGES. AS PER CLAUSE (I) OF THE EXPLANATION-I OF SECTION 10AA OF THE IT ACT EXPORT TURNOVER MEANS THE 2 ITA NO.1415/K/2011 M/S. EPIC EXPORTS , AY:2008-09 CONSIDERATION IN RESPECT OF EXPORT BY THE UNDERTAKI NG BEING THE UNIT OF ARTICLES OR THINGS OR SERVICES RECEIVED IN OR BROUGHT INTO INDIA BY AS SESSEE BUT DOES NOT INCLUDE FRIGHT, TELE- COMMUNICATION CHARGES OR INSURANCE ATTRIBUTABLE TO THE DELIVERY OF THE ARTICLES OR THINGS OUTSIDE INDIA. HOWEVER, BY REFERRING TO THE SPECIAL ECONOMIC ZONE ACT, 2005 THE LD. COUNSEL APPEARING FOR ASSESSEE HAS CONTENDED THAT I N THE SAID ACT NOWHERE IT IS MENTIONED THAT IN ORDER TO EXEMPT U/S 10AA OF THE I T ACT THE SALE PROCEEDS OF ASSESSEE SHOULD BE IN THE FORM OF CONVERTIBLE FOREIGN EXCHAN GE. THEREFORE HE REQUESTED TO ALLOW THE CLAIM OF ASSESSEE U/S 10AA OF THE IT ACT BY SET TING ASIDE THE ORDERS OF THE REVENUE AUTHORITIES. 5. ON THE OTHER HAND, THE LD. DR APPEARING ON BEHAL F OF THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 6.AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREFU L PERUSAL OF MATERIALS AVAILABLE ON RECORD, IT IS OBSERVED THAT IN THE CASE OF ITO VS ANITA SYNTHETICS PVT. LTD. REPORTED IN 100 TTJ 277 HAS HELD AS UNDER :- EXPORT OF GOODS VIS--VIS SALE OF GOODS TO ANOTHER EOU- THE REQUIREMENT UNDER S. 10B AS IT EXISTED AT THE RELEVANT TIME TO RECEIV E SALE PROCEEDS ____________CONVERTIBLE FOREIGN EXCHANGE IN THE A BSENCE OF ANY SPECIFIC DEFINITION IN THE ACT, THE WORD ______HAS TO BE INT ERPRETED IN ACCORDANCE WITH THE MEANING ASCRIBED TO IT UNDER RELEVANT EXIM_____ ______WHIC DEEMS THE SALE BY ONE EOU TO ANOTHER AS EXPORT FURTHER, ASSESSEE IS CLAIMING EXEMPTION ONLY IN RESPECT OF PROFITS ACCRUING TO IT FROM THE UNDER TAKING AFTER THE DATE OF GRANT OF APPROVAL AS EOU AND THE PROFITS FROM TRADING ACTIVI TIES ARE NOT CONSIDERED FOR EXEMPTION THEREFORE, THE FACT THAT THE ASSESSEE I S ALSO ENGAGED IN TRADING CANNOT DISENTITLE IT IN RESPECT OF ITS OTHERWISE VA LID CLAIM-CONTENTION OF AO THAT THE UNDERTAKING WAS NOT A NEW ONE AND WAS FORMED BY SPLITTING OR RECONSTRUCTION OF BUSINESS ALREADY IN EXISTENCE IS NOT CORRECT-OWN ERSHIP, MANAGEMENT AND CONTROL OF THE ASSETS OF THE BUSINESS CONTINUED TO VEST IN THE HANDS OF SAME ASSESSEE BOTH PRIOR TO AND SUBSEQUENT TO ITS BEING ACCORDED APPROVAL HENCE, ASSESSEES CLAIM FOR EXEMPTION UNDER S.10B COULD NO T BE DISALLOWED ON ANY OF THE AFORESAID GROUNDS. 6.1. AGAIN THE ITAT, COCHIN BENCH IN THE CASE OF M/ S.ELECTRONIC CONTRALS AND DISCHARGE SYSTEMS PVT. LTD. VS ITO.WARD-1(1)ERNAKULAM VIDE IT A NOS.415&416/COCH/09 ORDER DATED 6TH NOVEMBER, 2009 HAS HELD AS UNDER :- 12. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AND PERUSED THE CITED TRIBUNAL ORDER. THE TRIBUNAL WHILE INTERPRETING THE BENEFICIAL DEDCUCTION APPROACHED THE ISSUE ON LIBERAL CONNOTATION AS THE SALE TO ANOTHER SEZ BY THE ASSESSEE SEZ WHICH RECOGNIZED DEEMED EXPORT. THE DE CISIONS OF THE AHEMEDABAD AND MUMBAI BENCH OF THE ITAT SUPPORT THE ASSESSEES CONTENTIONS. RESPECTFULLY FOLLOWING THESE DECISIONS OF THE TRIBUNAL, WE HAVE NO HESITATION TO DECIDE THAT THE ASSESSEE HAS FULFILLED THE REQUIREMENTS AND HENCE, THE ASSESSEE IS ENTITLED TO 10A DEDUCTION AS CLAIMED. UNDER THE ABOVE FACTS AND CIR CUMSTANCES, THE ORDER OF THE AUTHORITIES ARE SET ASIDE AND ALLOW THE APPEALS OF THE ASSESSEE. 6.2. KEEPING IN VIEW OF THE ABOVE TWO TRIBUNAL DECI SIONS AND THE FACTS OF THE PRESENT CASE WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED FO R DEDUCTION U/S 10AA OF THE IT ACT. THEREFORE, WE SET ASIDE THE ORDERS OF THE REVENUE A UTHORITIES AND DIRECT THE AO TO ALLOW THE CLAIM OF ASSESSEE U/S 10AA OF THE IT ACT. ON QUERY FROM THE BENCH, THE LD. SR. DR FAIRLY CONC EDED THAT THE ISSUE IS COVERED BUT HE ALSO STATED THAT THE REVENUE HAS PREFERRED APPEAL BEFORE HONBLE HIGH COURT AGAINST THIS ORDER OF 3 ITA NO.1415/K/2011 M/S. EPIC EXPORTS , AY:2008-09 TRIBUNAL IN ASSESSMENT YEAR 2007-08. WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISIO N OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN IMMEDIATELY PRECEDING YEAR. SINCE THE ISSUE IS COV ERED, WE DIRECT THE AO TO ALLOW EXEMPTION U/S. 10AA OF THE ACT TO THE ASSESSEE. THE APPEAL O F ASSESSEE IS ALLOWED. 4. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 5. ORDER IS PRONOUNCED IN THE OPEN COURT ON 13.03.2 014. SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13TH MARCH, 2014 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT- M/S. EPIC EXPORTS, 25, PARK LANE, KOLKA TA-700 016 2 ./,- / RESPONDENT ACIT, CIRCLE-32, KOLKATA. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .