M/s. K.H Shoes Pvt. Ltd., CHENNAI V. ITO (OSD), CHENNAI

ITA 1559/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52102 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 13-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RANGARAJAN JUNIOR
• Assessee Lawyers: G BASKAR
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1559/MDS/2011 (ASSESSMENT YEAR : 2004-05) M/S K.H. SHOES PVT. LTD., K H CENRE, 15/2, COLLEGE ROAD, NUNGAMBAKKAM, CHENNAI 600 006. PAN : AAACK1394E (APPELLANT) V. THE INCOME TAX OFFICER (OSD), COMPANY CIRCLE II(4), CHENNAI 600 034. (RESPONDENT) APPELLANT BY : SHRI G. BASKAR, ADVOCATE RESPONDENT BY : SHRI K.E .B. RANGARAJAN, JUNIOR STANDING COUNSEL DATE OF HEARING : 24.11.2011 DATE OF PRONOUNCEMENT : 24.11.2011 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, IT HAS RAIS ED SIX GROUNDS IN TOTAL, OUT OF WHICH, GROUND NOS.5 AND 6 ARE GENERAL IN NATURE NEEDING NO ADJUDICATION. THOUGH AT GROUND NO.1, ASSESSEE H AS RAISED A GRIEVANCE THAT NO OPPORTUNITY WAS GIVEN TO IT BY LD . CIT(APPEALS), THIS I.T.A. NO. 1559/MDS/11 2 GROUND WAS NOT SERIOUSLY PRESSED BY THE LEARNED COU NSEL FOR THE ASSESSEE. THIS LEAVES US WITH GROUND NOS.2, 3 AND 4 FOR ADJUDICATION. GRIEVANCE OF THE ASSESSEE IN ITS GRO UND NO.2 IS THAT CIT(APPEALS) ERRED HOLDING THE ASSESSING OFFICER JU STIFIED IN EXCLUDING 90% OF THE SALE PROCEEDS OF THE DEPB LICE NCES, WHILE COMPUTING ITS ELIGIBLE DEDUCTION UNDER SECTION 80HH C OF INCOME-TAX ACT, 1961 (IN SHORT THE ACT). VIDE GROUND NO.3, GRIEVANCE OF THE ASSESSEE IS THAT CIT(APPEALS) ERRED IN UPHOLDING TH E EXCLUSION OF 90% OF THE JOB WORK RECEIPTS WHILE COMPUTING ITS DE DUCTION UNDER SECTION 80HHC OF THE ACT. FINALLY VIDE ITS GROUND NO.4, GRIEVANCE RAISED BY THE ASSESSEE IS THAT CIT(APPEALS) CONFIRM ED THE EXCLUSION OF 90% OF THE INTEREST RECEIPTS, WHILE COMPUTING IT S ELIGIBLE DEDUCTION UNDER SECTION 80HHC OF THE ACT. 2. WHEN THE MATTER CAME UP BEFORE US, LEARNED COUNS EL FOR THE ASSESSEE RELYING ON THE ORDER OF THE CO-ORDINATE BE NCH OF THIS TRIBUNAL IN THE CASE OF ACIT V. S.P.G. RAMASAMY NAD AR & SONS (I.T.A. NOS. 1657 & 1659/MDS/10 DATED 18.3.2011), S UBMITTED THAT IN SO FAR AS THE ISSUE OF DEPB LICENCES WERE CONCERNED , THE MATTER REQUIRED A RE-VISIT BY THE A.O. IN VIEW OF THE VARI OUS DECISIONS NOW I.T.A. NO. 1559/MDS/11 3 AVAILABLE ON THIS ISSUE. IN SO FAR AS THE CLAIM OF JOB WORK CHARGES WERE CONCERNED, LEARNED COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE A.O. AS WELL AS CIT(APPEALS) ERRED IN CONSIDERING G ROSS JOB WORK CHARGES FOR EXCLUSION, WHEREAS ACCORDING TO HIM, ON LY THE PROFITS ARISING THROUGH JOB WORK OUGHT HAVE BEEN RECKONED. ON ITS GROUND NO.4, LEARNED COUNSEL FOR THE ASSESSEE FAIRLY ADMIT TED THAT THE ISSUE STOOD DECIDED AGAINST ASSESSEE BY VIRTUE OF DECISIO N OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. V. CHINNAPANDI (282 ITR 389). 3. PER CONTRA, LEARNED D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. IN SO FAR AS THE ISSUE RELATING TO DEPB LICENCES AND P ROFIT ON SALE THEREOF ARE CONCERNED, IN OUR OPINION, IT REQUIRE A DE NOVO CONSIDERATION BY THE ASSESSING OFFICER IN VIEW OF T HE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. KAL PATHARU COLOUR AND CHEMICALS (233 CTR 313) AND ALSO THE PRINCIPLE LAID DOWN BY THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF TOPMA N EXPORTS V. ITO I.T.A. NO. 1559/MDS/11 4 (29 DTR 153) TO THE EXTENT IT HAS NOT BEEN REVERSED BY THE HON'BLE BOMBAY HIGH COURT. WE, THEREFORE, SET ASIDE THE OR DERS OF THE AUTHORITIES BELOW AND REMIT THE ISSUE BACK TO THE F ILE OF THE A.O. FOR DE NOVO CONSIDERATION IN ACCORDANCE WITH THE LAW LAID DOWN BY THE VARIOUS HIGHER JUDICIAL FORUMS IN THIS REGARD. A.O . HAS TO CONSIDER THE DECISIONS CITED BY THE ASSESSEE IN THIS REGARD. 5. SIMILARLY, ON THE ISSUE RELATING TO JOB WORK CHA RGES ALSO, THERE ARE VARIOUS DECISIONS OF HIGHER JUDICIAL FORUMS THA T COULD THROW LIGHT INCLUDING THAT OF HON'BLE APEX COURT IN THE CASE OF CIT V. K. RAVINDRANATHAN NAIR (295 ITR 228). WE ARE OF THE O PINION THAT THIS ALSO HAS TO BE RECONSIDERED BY THE A.O. VIS--VIS T HE CLAIM OF THE ASSESSEE THAT ONLY THE NET AMOUNT SHOULD BE CONSIDE RED AND NOT GROSS. HENCE, THIS ISSUE IS ALSO REMITTED BACK TO THE FILE OF THE A.O. FOR CONSIDERATION AFRESH. 6. REGARDING GROUND NO.4, WE ARE OF THE OPINION THA T THERE IS NOTHING ERRONEOUS IN THE DECISIONS OF THE AUTHORITI ES BELOW, IN VIEW OF THE LAW LAID DOWN BY HON'BLE JURISDICTIONAL HIGH CO URT IN THE CASE OF V. CHINNAPANDI (SUPRA). THIS GROUND THEREFORE STAN DS DISMISSED. I.T.A. NO. 1559/MDS/11 5 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 24 TH NOVEMBER, 2011. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 24 TH NOVEMBER, 2011. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-III, CHENNAI (4) CIT, CHENNAI-I, CHENNAI (5) D.R. (6) GUARD FILE