The DCIT, Circle-7, Ahmedabad V. M/s. Ashish Chemicals, Ahmedabad

ITA 1575/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 7748 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 15-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S CHAUDHARY
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH (BEFORE S/SHRI T.K. SHARMA, JUDICIAL MEMBER AND D.C.AGRAWAL, ACCOUNTANT MEMBER) ITA.NO.1575/AHD/2009 [ASSTT.YEAR : 2002-2003] DCIT, CIR.7 AHMEDABAD. VS. M/S.ASHISH CHEMICALS LANE NO.13, B.NO.246, SATYAGRAH CHHAVANI SATELLITE ROAD, AHMEDABAD. PAN : AABFA 6775 F REVENUE BY : SHRI D.S.CHAUDHARY ASSESSEE BY : NONE O R D E R PER D.C.AGRAWAL, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-XI, AHMEDAB AD DATED 03.03.2009, RAISING THE ISSUE THAT LEARNED CIT(A) HAS WRONGLY D ELETED THE ADDITION OF RS.8,68,040/- ON ACCOUNT OF EXCESS CLAIM UNDER SECT ION 80HHC ON SALE OF DEPB LICENSE. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, THEREFO RE, WE PROCEED TO DISPOSE OF THE APPEAL AFTER HEARING LEARNED DR AND CONSIDERING MATERIAL AVAILABLE ON RECORD. 3. THE LEARNED CIT(A) HAS STATED THE FACTS AND SUBM ISSIONS AS UNDER: 2. IT IS SUBMITTED BY THE AR THAT THE APPELLANT IS MAINLY AGITATED AGAINST REDUCING THE DEDUCTION OF RS.8,678,040/- WH ILE COMPUTING THE DEDUCTION U/S.80HHC OF THE INCOME TAX ACT. IT IS F URTHER SUBMITTED THAT THE AO HAS NOT APPRECIATED THE FACT THAT IN APPELLA NTS CASE THE EXPORT TURNOVER DID NOT EXCEED RS.10 CRORES. THEREFORE, I T IS NOT WARRANTED FOR THE AO TO REDUCE THE DEPB OF RS.12,40,055/- WHILE C OMPUTING THE 80HHC DEDUCTION FROM THE BUSINESS PROFITS. IN SUPP ORT OF HIS ITA.NO.1575/AHD/2009 -2- SUBMISSION, THE AR HAS ALSO FURNISHED WRITTEN SUBMI SSIONS WHICH IS REPRODUCED AS UNDER: THE LD.AO WHILE APPLYING THE AMENDMENT SECTION 80H HC FAILED TO APPRECIATE THE PROVISO TO SUB-SECTION 3 OF SECTI ON 80HHC WHICH IS REPRODUCED AS UNDER: PROVIDED FURTHER THAT IN THE CASE OF AND ASSESSEE H AVING EXPORT TURNOVER NOT EXCEEDING RUPEES TEN CRORE DURING THE PREVIOUS YEAR, THE PROFITS COMPUTED UNDER CLAUSE (A) OR CLAUSE (B) OR CLAUSE (C) OF THIS SUB-SECTION OR AFTER GIVING EFFECT TO THE F IRST PROVISO, AS THE CASE MAY BE, SHALL BE FURTHER INCREASED BY THE AMOU NT WHICH BEARS TO NINETY PER CENT OF ANY SUM REFERRED TO IN CLAUSE(IIID) AND (IIIC) OF SECTION 28, THE SAME PROPORTION AS THE EX PORT TURNOVER BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE. YOUR APPELLANT VIDE LETTER DATED 12 TH FEBRUARY 2007 HAVE SUBMITTED THE FACT THAT THE TOTAL EXPORT TURNOVER O F APPELLANT IS LESS THAN RS.10 CRORE AND THEREFORE DEPB INCOME AS STATED IN SECTION 28(IIID) OF THE IT ACT IS ELIGIBLE FOR DEDU CTION U/S.80HHC OF THE ACT. 3. IN THE LIGHT OF THE ABOVE WRITTEN SUBMISSIONS, I T IS THE ARGUMENT OF THE AR THAT THE AO IS NOT JUSTIFIED TO REDUCE THE A PPELLANTS CLAIM OF DEDUCTION U/S.80HHC OF THE INCOME-TAX ACT. 4. THE SUBMISSIONS MADE BY THE AR HAVE BEEN PERUSED . THE OBSERVATIONS OF THE AO ARE ALSO TAKEN INTO CONSIDER ATION. IT IS SEEN FROM THE FACTS OF THE CASE, THE APPELLANT DO NOT HA VE EXPORT TURNOVER EXCEEDING RS.10 CRORES. THEREFORE, AS PER THE PROV ISIONS OF SUB-SECTION 3 OF SECTION 80HHC OF THE INCOME-TAX ACT, THE APPEL LANT IS ENTITLED TO HAVE DEDUCTION OF THE PROFITS WHICH ARE INCREASED B Y 90% OF DEPB. THEREFORE, THIS GROUND OF APPEAL IS ALLOWED. 4. WE HAVE HEARD LEARNED DR. IN OUR CONSIDERED VIE W, THE DECISION OF THE LEARNED CIT(A) IS IN ACCORDANCE WITH THE LAW AS THE AO HAS IGNORED THE PROVISION OF PROVISO TO SECTION 3 WHILE MAKING ADDI TION. THE LEARNED CIT(A) HAS CORRECTLY APPLIED THE PROVISIONS OF LAW AS THE EXPORT TURNOVER OF THE ASSESSEE DID NOT EXCEED RS.10 CRORES. AS THERE IS NO INFIRMITY IN THE ORDER ITA.NO.1575/AHD/2009 -3- PASSED BY THE LEARNED CIT(A), WE CONFIRM THE SAME A ND DISMISS THE APPEAL OF THE REVENUE. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 24 TH JULY, 2009. SD/- SD/- (T.K. SHARMA) JUDICIAL MEMBER (D.C. AGRAWAL) ACCOUNTANT MEMBER PLACE : AHMEDABAD DATE : 24-07-2009 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR, ITAT, AHMEDABAD