Biyani Impex Pvt. Ltd., Surat V. The Income tax Officer, Ward-1(1), Surat

ITA 1615/AHD/2005

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57301 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-03-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 15-06-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment
• Section: 80HHC

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , !', #$ # % BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.1615/AHD/2005 ( ( ( ( ( / / / / ASSESSMENT YEAR : 2003-04) BIYANI IMPEX PVT.LTD. 5101-B BLOCK RAGHUKUL MARKET RING ROAD, SURAT 395 002` / VS. THE ITO WARD-1(1) SURAT ) #$ ./*+ ./ PAN/GIR NO. : AABCB 4332 L ( ), / // / APPELLANT ) .. ( -.), / RESPONDENT ) ), / # / APPELLANT BY : SHRI HARDIK VORA -.), 0 / # / RESPONDENT BY : SHRI BHUVNESH KULSHRESTHA, SR. D.R. 1 0 '$ / / / / DATE OF HEARING : 01/03/2012 23( 0 '$ / DATE OF PRONOUNCEMENT : 26.03.2012 #4 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-I, SURAT DATED 31/03/2005 PASSED FOR A.Y. 2003-04 AND THE GROUNDS RAISED BY THE ASSESSEE WERE AS FOLLOWS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT THE LEARNED C.I.T.(A)-I, SURAT HAS ERRE D IN DISMISSING THE APPEAL OF THE APPELLANT AND THEREBY CONFIRMING THE ITA NO.1615/AHD /2005 BIYANI IMPEX PVT.LTD. VS. ITO ASST.YEAR - 2003-04 - 2 - DISALLOWANCE OF DEDUCTION U/S.80HHC TO THE TUNE OF RS.46,66,558/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT, THE LEARNED C.I.T.(A) HAS ERRED IN NOT ACC EPTING THE PROFIT ON SALE OF DUTY ENTITLEMENT PASS BOOK LICENSE (D.E. P.B.) AND THE SUM OF DUTY ENTITLEMENT PASS BOOM INCOME (D.E.P.B.) AS EXPORT INCENTIVE FOR CLAIMING DEDUCTION U/S.80HHC. 3. THE LEARNED C.I.T.(A) FAILED TO APPRECIATE THAT THE LEARNED A.O HAD WRONGLY CONSIDERED THE APPELLANT COMPANY AS MAN UFACTURING EXPORTER INSTEAD OF TRADING EXPORTER AND WRONGLY WO RKED OUT THE DEDUCTION U/S.80HHC AT RS.NIL. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE WELL AS LAW ON THE SUBJECT, THE LEARNED C.I.T.(A)-I, SURAT HAS ERRED I N DISMISSING THE APPEAL RELYING ON THE OPINION OF HONBLE SUPREME CO URT IN THE CASE OF IPCA LABORATORIES VS. DCIT (266 ITR 521) WI THOUT APPRECIATING THAT THE FACTS AND CIRCUMSTANCES OF TH E APPELLANT WERE DIFFERENT FROM THE IPCAS CASE. 5. THE APPELLANT CRAVES LEAVE TO ADD TO ALTER OR T O AMEND THE PRESENT GROUNDS OF APPEAL. 2. APROPOS TO ABOVE GROUNDS, FACTS IN BRIEF AS EM ERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T.ACT DATED 15/7/2004 WERE THAT THE ASSESSEE-COMPANY IS IN THE BUSINESS OF EXPORT OF ART SILK CLOTH. THE ASSESSEE HAS CLAIMED A DEDUCT ION U/S.80HHC OF RS.46,66,558/-. AS AGAINST THAT, THE AO HAS RE COMPUTED THE WORKING AND ARRIVED AT A CONCLUSION THAT DUE TO THE NEGATIV E PROFIT, THE ASSESSEE WAS NOT ENTITLED FOR ANY CLAIM OF DEDUCTION U/S.80H HC. RESULTANTLY, THE AFORESAID CLAIM WAS DISALLOWED. ITA NO.1615/AHD /2005 BIYANI IMPEX PVT.LTD. VS. ITO ASST.YEAR - 2003-04 - 3 - 2.1. THE REJECTION OF DEDUCTION U/S.80HHC HAD T WO COMPONENTS. THE FIRST COMPONENT WAS IN RESPECT OF PROFIT ON SALE OF DUTY ENTITLEMENT PASS BOOK LICENCE (DEPB). IN THIS REGARD, LD.AR HAS PLA CED BEFORE US A LATEST DECISION DATED 8 TH FEBRUARY-2012 OF THE HONBLE SUPREME COURT PRONOUNCED IN THE CASE OF TOPMAN EXPORTS 18 TAXMAN. COM 120(SC). THIS DECISION OF THE HONBLE APEX COURT HAS LAID DO WN CERTAIN GUIDELINES FOR THE PURPOSE OF COMPUTATION OF DEDUCTION IN RESP ECT OF DEPB PROFIT. THIS DECISION OF THE APEX COURT WAS NOT AVAILABLE W HEN THE ASSESSMENT WAS MADE. AN ANOTHER LEGAL ASPECT HAS ALSO BEEN BROUGHT TO OUR NOTICE THAT AN AMENDMENT TOOK PLACE IN THE PROVISIONS OF S ECTION 80HHC BY INSERTION OF CERTAIN PROVISO UNDER SUB-SECTION(3) T O SECTION 80HHC. THE INSERTION OF A PROVISO BELOW SUB-SECTION(3) OF SECT ION 80HHC IS WITH RETROSPECTIVE EFFECT FROM 01/04/1992. IN THIS REG ARD, WE HAVE BEEN INFORMED THAT THE ASSESSMENT YEAR UNDER CONSIDERATI ON IS AY 2003-04. WHEN THE ASSESSMENT WAS MADE AND THE MATTER WAS CHA LLENGED BEFORE THE CIT(A), A VIEW WAS TAKEN FOLLOWING THE DECISION OF IPCA LABORATORY LTD. VS. DCIT [2004] 266 ITR 521(SC). NOW DUE TO THE INSERTION OF A PROVISO AND THE AMENDMENT TOOK PLACE; THE ENTIRE DI SALLOWANCE HAS TO BE CALCULATED AGAIN. AT THIS JUNCTURE, LD.DR MR.BHU VNESH KULSHRESTHA HAS SUGGESTED THAT IF THE MATTER IS GOING BACK TO THE F ILE OF AO, THEN THE RE- WORKING OF DEDUCTION U/S.80HHC BE IN ACCORDANCE WIT H OTHER LEGAL DEVELOPMENTS WHICH HAVE TAKEN PLACE AFTER THE COMPL ETION OF THE ASSESSMENT. NATURALLY, THE RE-COMPUTATION OF DEDU CTION U/S.80HHC HAS TO BE WORKED OUT AS PER LAW. WE DIRECT ACCORDING LY. SINCE THE MATTER ITA NO.1615/AHD /2005 BIYANI IMPEX PVT.LTD. VS. ITO ASST.YEAR - 2003-04 - 4 - HAS BEEN RESTORED BACK TO THE FILE OF THE AO, THERE FORE ALL THE GROUNDS SHALL BE TREATED AS ALLOWED ONLY FOR STATISTICAL PU RPOSES. 3. IT IS WORTH TO PLACE ON RECORD THAT IN ASSESSEE S OWN CASE FOR AY 2002-03, THE ITAT AHMEDABAD BENCH (SURAT CAMP - SU RAT) IN THE CASE OF ITO VS. BIYANI IMPEX (P) LTD. IN ITA NO.4315/AHD /2003 VIDE PARA-4 HAS HELD AS UNDER:- 4. IT WAS THE COMMON CONTENTION OF BOTH THE PARTI ES THAT RECENTLY THE SECOND, THIRD AND FOURTH PROVISO HAVE BEEN ADDE D TO SECTION 80HHC (3) BY THE TAXATION LAWS (AMENDMENT) ACT, 200 5 WITH RETROSPECTIVE EFFECT FROM 1.4.1998 IN THE STATUTE A ND THEREFORE, THE CLAIM OF THE ASSESSEE HAS TO BE RECONSIDERED IN ACC ORDANCE WITH THOSE PROVISOS, HENCE THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF AO FOR COMPUTATION. 4. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSES. SD/- SD/- ( ANIL CHATURVEDI ) ( MUKUL KR . SHRAWAT ) ACCOUNTANT MEMBER JUDI CIAL MEMBER AHMEDABAD; DATED 26/ 03 /2012 5'.., .../ T.C. NAIR, SR. PS #4 0 -6 7#6( #4 0 -6 7#6( #4 0 -6 7#6( #4 0 -6 7#6(/ COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. 8 / CONCERNED CIT 4. 8() / THE CIT(A)-I, SURAT 5. 6;< - , , / DR, ITAT, AHMEDABAD 6. <= >1 / GUARD FILE. #4 #4 #4 #4 / BY ORDER, .6 - //TRUE COPY// ? ?? ?/ // / * * * * ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD