The ACIT,A'bad Circle1, Ahmedabad V. M/s. Ambuja Intermediates Ltd., Ahmedabad

ITA 157/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73075 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-03-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 21-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Assessee Lawyers: JAIMIN B SHAH
• Section: 143(3); 80HHC; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M. I.T. A. NO. 157/AHD/2011 & CO. NO.28/AHD/2011) (ASSESSMENT YEAR: 2004-05) ACIT, AHMEDABAD CIRCLE-1, AHMEDABAD V/S AMBUJA INTERMEDIATES LTD. 901-A, NARAYAN COMPLEX, SWASTIC CHAR RASTA, OFF C G RD., NAVRANGPURA, AHMEDABAD (APPELLANT) (RESPONDENT) AMBUJA INTERMEDIATES LTD. 901-A, NARAYAN COMPLEX, SWASTIC CHAR RASTA, OFF C G RD., NAVRANGPURA, AHMEDABAD V/S ACIT, AHMEDABAD CIRCLE-1, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AACCA 1236B APPELLANT BY : SHRI R.K. DHANESTA, SR. D. R. RESPONDENT BY : SHRI JAIMIN B. SHAH A.R. ( )/ ORDER DATE OF HEARING : 10-03-2014 DATE OF PRONOUNCEMENT : 14 -03-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-VI, AHMEDABAD DATED 09.11.2010 FOR A.Y. 2004-05 AND ASS ESSEE HAS ALSO FILED A C.O. ITA NO 157/A/2011 & C O. NO. 28/A/2011 . A.Y. 2004- 05 2 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI AL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORT OF INTERMEDIATE DYES AND CHEMICALS. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 04-05 ON 20.10.2004 DECLARING TOTAL INCOME OF RS. 26,06,860/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) VIDE ORDER DATED 22.09.2006 AND THE TOTAL INCOME WAS ASSESSED AT RS. 87,82,625/-. SUBSEQUENTLY NOTICE UNDER SECTION 148 OF THE ACT WA S ISSUED ON 28.05.2008 AND THEREAFTER ASSESSMENT WAS FRAMED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT VIDE ORDER DATED 30.03.2009 AND THE TOTAL INCOME WAS DETERMINED AT RS. 89,28,620/-. AGGRIEVED BY THE OR DER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) VIDE ORDER DATED 09.11.2010 GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE AF ORESAID ORDER OF CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US AND ASSESSEE HAS ALSO FILED A C.O. THE GROUND RAISED BY THE REVENUE READS AS UNDER:- 1. THE LD CIT(A) ERRED IN LAW AND ON FACTS IN DIREC TING THE A.O. TO COMPUTE DEDUCTION U/S. 80HHC BY EXCLUDING SALES TAX AND EXCISE DUTY INSPITE OF THE PROVISIONS OF SECTION 145A OF THE IT ACT. 4. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS, A.O. NOTICED THAT ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80HHC OF THE AC T. WHILE CLAIMING THE DEDUCTION UNDER SECTION 80HHC, ASSESSEE HAD EXCLUDE D SALES TAX AND EXCISE DUTY FROM TOTAL TURNOVER. A.O. WAS OF THE VI EW THAT IN VIEW OF THE PROVISIONS OF SECTION 145A OF THE ACT, SALES TAX AN D EXCISE DUTY HAS TO BE INCLUDED IN THE TOTAL TURNOVER. HE ACCORDINGLY WOR KED OUT THE DEDUCTION UNDER SECTION 80HHC AT RS. 8,77,217/-. AGGRIEVED BY THE O RDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) DELETED TH E ADDITION MADE BY THE A.O. BY HOLDING AS UNDER:- 3.3 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER AND APPELLANT'S SUBMISSION. THE ISSUE RELATING TO INCLUSION OF SALES TAX EXCISE DUTY IN T OTAL TURNOVER FOR THE PURPOSE OF CALCULATING DEDUCTION UNDER SECTION 80 HHC IS SETTLED BY THE DE CISION OF HONORABLE SUPREME COURT IN THE CASE OF LAKSHMI MACHINE WORKS LTD, 290 ITR WHEREIN IT IS CL EARLY HELD THAT THESE ITEMS WILL NOT BE INCLUDED IN TOTAL TURNOVER SINCE THESE ARE NOT THE PART OF EXPO RT PROFITS AND ALSO EXPORT TURNOVER. RESPECTFULLY FOLLOWING THIS DECISION, ASSESSING OFFICER IS DIREC TED TO COMPUTE DEDUCTION UNDER SECTION 80HHC BY EXCLUDING SALES TAX AND EXCISE DUTY FROM TOTAL TURN OVER. ITA NO 157/A/2011 & C O. NO. 28/A/2011 . A.Y. 2004- 05 3 5. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US. 6. BEFORE US AT THE OUT SET, THE LD. A.R. SUBMITTED THAT THE ISSUE IN APPEAL IS COVERED IN FAVOUR OF ASSESSEE BY HONBLE HIGH COURT S DECISION IN ASSESSEES OWN CASE IN TAX APPEAL NO. 1452/AHD/2008 ORDER DATED 21.12.2013. HE PLACED ON RECORD THE AFORESAID DECIS ION OF HONBLE HIGH COURT. HE FURTHER SUBMITTED THAT SINCE THE FACTS O F THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF EARLIER YEARS, FOLL OWING THE DECISION OF HONBLE GUJARAT HIGH COURT, THE ISSUE BE DECIDED IN FAVOUR OF THE ASSESSEE. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT IN THE ASSESSEES OWN CASE IN TAX APPEAL NO. 1452/AHD/2008, THE ISSUE BEFORE THE HONBLE HIGH COURT WAS ABOUT THE E XCLUSION OF EXCISE DUTY AND SALES TAX FROM THE TOTAL TURNOVER FROM COMPUTIN G THE DEDUCTION UNDER 80 HHC. THE QUESTION BEFORE THE HONBLE HIGH COURT WAS :- WHETHER THE APPELLATE TRIBUNAL IS RIGHT IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFICER TO EXCLUDE EXCISE DUTY AND SALES TAX FROM THE TOTAL TU RNOVER COMPUTING DEDUCTION U/S. 80HHC, EVEN AFTER INSERTION OF SECTION 145A? 8. THE HONBLE GUJARAT HIGH COURT DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER:- 5. IT IS REQUIRED TO BE NOTED THAT INITIALLY MS. MA UNA BHATT, LEARNED COUNSEL APPEARING ON BEHALF OF THE REVENUE TRIED TO DISTINGUISH THE AFORESAID TWO DECISIONS BY SUBMITTING THAT IN THE SAID DECISIONS SECTION 145A OF THE INCOME TAX ACT, 1961 (HEREINAFT ER REFERRED TO AS THE ACT) HAS NOT BEEN CONSIDERED AND DEALT WITH. HOWEVER, CONSIDERING THE FACT THAT AS SUCH THERE IS NO AMENDMENT IN SECTION 80HHC OF THE ACT AND CONSIDERING THE OBSERVATIONS M ADE BY THE HONBLE SUPREME COURT IN PARAS 16 TO 18 IN THE CASE OF LAKSHMI MACHINE WORKS (SUPRA), MS. MAUNA BHATT, LEARNED COUNSEL APPEARING ON BEHALF OF THE REVENUE IS NOT IN A POSITION TO SATIS FY THE COURT AS TO HOW THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASES OF LAKHMI MACHINE WORKS (SUPRA) AND SHIVA TEX YARN LTD. (SUPRA) WOULD NOT BE APPLICABLE TO THE FACTS OF THE CASE ON HAND. 6. .. 7. APPLYING RATIO LAID DOWN BY THE HONBLE SUPREME COU RT IN THE CASE OF LAKSHMI MACHINE WORKS (SUPRA) AND SHIVA TEX YARN LTD. (SUPRA) AS WELL AS RECENT DECISION OF THIS COURT IN TAX APPEAL NO. 884 OF 2006 AND OTHER ALLIED APPEALS, TO THE FACTS OF T HE CASE ON HAND THE QUESTION RAISED IN THE PRESENT TAX APPEAL IS ANSWERED AGAINST THE REVENUE AND IT IS HE LD THAT THE LEARNED TRIBUNAL HAS NOT COMMITTED ANY ERROR IN HOLDING THAT THE COMPONENTS OF SALES TAX A ND CENTRAL EXCISE DO NOT FORM PART OF SALE PROCEEDS FOR THE PURPOSE OF SECTION 80HHC OF THE ACT DESPITE INSERTI ON OF SECTION 145A OF THE ACT. ITA NO 157/A/2011 & C O. NO. 28/A/2011 . A.Y. 2004- 05 4 9. BEFORE US, THE REVENUE HAS NOT BROUGHT ANY CONT RARY BINDING DECISION NOR COULD DISTINGUISH THE FACTS OF THE CASE WITH THAT O F EARLIER YEARS. FURTHER, SINCE THE FACTS OF THE CASE OF THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF EARLIER YEARS, WE FIND NO REASON TO INTERFERE WITH THE ORDE R OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 11. BEFORE US, THE LD. A.R. DID NOT PRESS THE GROUN DS RAISED IN C.O. AND WE THEREFORE DISMISS THE C.O. OF ASSESSEE AS NOT PRESS ED. 12. IN THE RESULT, APPEAL OF REVENUE AND CO OF ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 14 - 03 - 2014. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHM EDABAD