Sheena Overseas (P) Ltd, V. ACIT Panipat Circle,

ITA 1660/DEL/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61631 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 16-04-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 01-05-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S MOHANTY
• Assessee Lawyers: RAJ KUMAR S
• Keywords: Business income; Reassessment proceedings
• Section: 80HHC; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NOS.1660 TO 1662/DEL/2008 ASSESSMENT YEARS :1999-2000, 2000-01 & 2001-02 M/S SHEENA OVERSEAS (P) LTD., UJHA ROAD, PANIPAT. PAN : AAEFS4230N VS. ACIT, PANIPAT CIRCLE, PANIPAT. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH & SHRI RAJ KUMAR, ADVOCATES REVENUE BY : MS S. MOHANTY, DR ORDER PER BENCH: ALL THESE APPEALS ARE FILED BY THE ASSESSEE. THEY ARE D IRECTED AGAINST THE THREE ORDERS PASSED BY THE CIT (A): TWO DAT ED 17 TH MARCH, 2008 IN RESPECT OF ASSESSMENT YEARS 1999-2000 AND 2000-01 AND ONE DATED 6 TH MARCH, 2008 FOR ASSESSMENT YEAR 2001-02. SINCE COMMON ISSUES ARE INVOLVED IN THE PRESENT APPEALS, THESE WERE AR GUED TOGETHER BY BOTH THE PARTIES, HENCE, FOR THE SAKE OF CONVENIEN CE ALL THESE APPEALS ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER . THE GROUNDS OF APPEAL IN RESPECT OF EACH YEAR READ AS UNDER:- ITA NO.1660/DEL/2008 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE FOLLOWING ACTIONS OF THE ASSESSING OFFICER IN :- ITA NOS.1660-1662/DEL/2008 2 A) REOPENING THE ASSESSMENT U/S 147 READ WITH SECTION 1 48 OF THE INCOME TAX ACT, 1961 WITHOUT EVEN COMPLYING WITH THE STATUTORY REQUIREMENT AND PROCEDURES; B) REASSESSING THE INCOME OF THE APPELLANT AT RS.80,07, 526/- AS AGAINST NIL RETURNED INCOME; C) RESTRICTING THE EXEMPTION U/S 80HHC OF THE ACT AT RS.41,70,226/- AS AGAINST RS.1,32,69,366/- CLAIMED B Y THE APPELLANT. D) EXCLUDING A SUM OF RS.59,00,775/- EARNED ON ACCO UNT O FOREIGN CURRENCY FLUCTUATIONS FROM THE EXPORT TURNOVER W HILE ALLOWING EXEMPTION U/S 80HHC OF THE ACT. E) HOLDING THAT DUTY DRAW BACK AND DEPB RECEIVED BY THE APPELLANT IS A SEPARATE SOURCE OF INCOME AND AS NOT A N AMOUNT WHICH WOULD REDUCE THE COST OF PURCHASE. F) EXCLUDING A SUM OF RS.10,91,604/- BEING THE EXEMP TION ALLOWABLE U/S 80IA WHILE COMPUTING EXEMPTION U/S 80HH C OF THE ACT; G) RESTRICTING EXEMPTION U/S 80IA OF THE ACT TO RS.10,91, 604/-; H) EXCLUDING EXPORT INCENTIVES AND INTEREST INCOME WHIL E COMPUTING BUSINESS INCOME FOR THE PURPOSE OF ALLOWING EXEMPTION U/S 80IA OF THE ACT. IT IS PRAYED THAT THE ORDER OF THE LD. CIT (A) BEING ERR ONEOUS, ARBITRARY, UNJUST AND UNLAWFUL MUST BE QUASHED WITH DIR ECTIONS FOR RELIEF. ITA NO.1661/DEL/2008 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE FOLLOWING ACTIONS OF THE ASSESSING OFFICER IN :- A) REOPENING THE ASSESSMENT U/S 147 READ WITH SECTION 1 48 OF THE INCOME TAX ACT, 1961 WITHOUT EVEN COMPLYING WITH THE STATUTORY REQUIREMENT AND PROCEDURES; B) REASSESSING THE INCOME OF THE APPELLANT AT RS.64,07, 906/- AS AGAINST NIL RETURNED INCOME; C) RESTRICTING THE EXEMPTION U/S 80HHC OF THE ACT AT RS.8,49,78,167/- AS AGAINST RS.12,75,00,149/- CLAIME D BY THE APPELLANT. ITA NOS.1660-1662/DEL/2008 3 D) EXCLUDING A SUM OF RS.71,19,896/- EARNED ON ACCO UNT OF EXPORT INCENTIVES FROM THE BUSINESS PROFITS WHILE ALLOW ING EXEMPTION U/S WHILE ALLOWING EXEMPTION U/S 80HHC OF TH E ACT. E) HOLDING THAT DUTY DRAW BACK AND DEPB RECEIVED BY THE APPELLANT IS A SEPARATE SOURCE OF INCOME AND AS NOT AN AMOUNT WHICH WOULD REDUCE THE COST OF PURCHASE. F) EXCLUDING A SUM OF RS.3,61,14,076/- BEING THE EXE MPTION ALLOWABLE U/S 80IA WHILE COMPUTING EXEMPTION U/S 80HH C OF THE ACT; G) RESTRICTING EXEMPTION U/S 80IA OF THE ACT TO RS.3,61,1 4,076/-; H) EXCLUDING EXPORT INCENTIVES AND INTEREST INCOME WHIL E COMPUTING BUSINESS INCOME FOR THE PURPOSE OF ALLOWING EXEMPTION U/S 80IA OF THE ACT. IT IS PRAYED THAT THE ORDER OF THE LD. CIT (A) BEING ERR ONEOUS, ARBITRARY, UNJUST AND UNLAWFUL MUST BE QUASHED WITH DIR ECTIONS FOR RELIEF. ITA NO.1662/DEL/2008 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE FOLLOWING ACTIONS OF THE ASSESSING OFFICER IN :- I) ASSESSING THE INCOME OF THE APPELLANT AT RS.46,60,76 6/- AGAINST RETURNED INCOME OF RS.1010170/- BY NOT ALLOWIN G EXEMPTION U/S 80HHC OF THE ACT AMOUNTING TO RS.3650598/- ; II) HOLDING THAT DUTY DRAW BACK/DEPB RECEIVED BY THE APPELLANT IS A SEPARATE SOURCE OF INCOME AND NOT AN AM OUNT WHICH WILL REDUCE THE COST OF PURCHASES. IT IS PRAYED THAT THE ABOVE ORDER BEING ERRONEOUS, ARBI TRARY, AND UNLAWFUL MUST BE QUASHED. 2. APART FROM THE ABOVE, THE LEARNED AR HAS FURNISHED APPLICATIONS FOR ADMISSION OF ADDITIONAL GROUNDS OF APPEAL WHICH PE RTAINS TO REOPENING IN RESPECT OF ASSESSMENT YEARS 1999-2000 AND 20 00-01 WHICH READ AS UNDER:- ITA NO.1660/D/08 ( ASSESSMENT YEAR : 1999-2000) THAT THE CONFIRMATION BY THE CIT (A) OF THE ACTION OF TH E ASSESSING OFFICER IN RE-COMPUTING INCOME PERTAINING TO OTHER ITA NOS.1660-1662/DEL/2008 4 HEAD WHICH WAS NEITHER PART OF THE REASONS RECORDED NO R WAS THE BASIS OF INITIATION UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 IS ARBITRARY, ERRONEOUS AND ILLEGAL AND SO MUST BE ANNULLED. ALL ADDITIONS MADE ON THAT BASIS MUST BE UNDONE. ITA NO.1661/D/08 ( ASSESSMENT YEAR : 2000-01) THAT THE CONFIRMATION BY THE CIT (A) OF THE ACTION OF THE ASSESSING OFFICER IN RE-COMPUTING INCOME PERTAINING TO OTHER HEAD WHICH WAS NEITHER PART OF THE REASONS RECORDED NO R WAS THE BASIS OF INITIATION UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 IS ARBITRARY, ERRONEOUS AND ILLEGAL AND SO MUST BE ANNULLED. ALL ADDITIONS MADE ON THAT BASIS MUST BE UNDONE. 3. AT THE OUTSET, IT WAS SUBMITTED BY THE LD. COUNSEL T HAT THE GROUNDS RELATING TO VALIDITY OR OTHERWISE OF RE-ASSESSMEN T PROCEEDINGS IN RESPECT OF ASSESSMENT YEAR 1999-2000 AND 2000-01 ARE NOT PRESSED. HE FURTHER SUBMITTED THAT IN THE APPEALS FOR A SSESSMENT YEAR 1999-2000 AND 2000-01 THE ISSUES WHICH REMAINS FOR ADJU DICATION ARE RELATING TO DEDUCTION U/S 80HHC AND 80IA. HE SUBMITT ED THAT IN VIEW OF RECENT PRONOUNCEMENTS OF HONBLE SUPREME COURT ON BOTH THE ISSUES AS WELL AS THE DECISIONS OF HONBLE JURISDICTIONAL H IGH COURT, BOTH THESE DEDUCTIONS HAVE TO BE WORKED OUT FRESHLY IN ACCO RDANCE WITH THOSE DECISIONS. HE, THEREFORE, SUBMITTED THAT IT WILL BE APPROPRIATE IF THE ISSUE OF RE-COMPUTATION OF THESE DEDUCTIONS ARE REST ORED TO THE FILE OF ASSESSING OFFICER AS IT WOULD FACILITATE THE ASSESSEE AS W ELL AS THE DEPARTMENT TO COMPUTE THESE DEDUCTIONS AS PER PROVISION S OF LAW. HE SUBMITTED THAT IN RESPECT OF ASSESSMENT YEAR 2001-02 ALSO AS THE ISSUE RELATES TO DEDUCTION U/S 80HHC, THE MATTER MAY BE RESTORED BACK TO THE FILE OF ASSESSING OFFICER. HE FURTHER SUBMITTED THAT THOUGH SOME OF THE ISSUES ARE COVERED BY THE EARLIER DECISIONS OF TH E ITAT, BUT, IT WILL BE PROPER IF THE MATTERS ARE RESTORED BACK TO THE FIL E OF ASSESSING OFFICER FOR RE-COMPUTATION OF THESE DEDUCTIONS. 4. ON THE OTHER HAND, IT WAS SUBMITTED BY THE LEARNED DR THAT ON CERTAIN ISSUES THERE ARE DECISIONS ALSO IN FAVOUR OF THE REVENUE, ITA NOS.1660-1662/DEL/2008 5 THEREFORE, RELYING UPON THE ORDER OF CIT (A), SHE PL EADED THAT THE ORDER OF THE CIT (A) SHOULD BE UPHELD IN RESPECT OF THESE YE ARS. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. WE FIND SUBSTANCE IN THE SUBMISSIONS MADE BY THE LEARNED AR. ACCEPTING HIS REQUEST, WE RE STORE ALL THESE THREE YEARS TO THE FILE OF ASSESSING OFFICER WITH A DIRE CTION TO RE- COMPUTE THE DEDUCTION U/S 80HHC AND 80IA IN RESPECT O F ASSESSMENT YEARS 1999-2000 AND 2000-01 AND DEDUCTION U/S 80HHC F OR ASSESSMENT YEAR 2001-02. IT CAN BE SEEN FROM THE GROUND S OF APPEAL FILED BY THE ASSESSEE THAT THERE IS NO GRIEVANCE OF THE ASSESSEE WITH REGARD TO DEDUCTION U/S 80IA IN RESPECT OF ASSESSMENT YEA R 2001-02. THEREFORE, THE DIRECTION IS GIVEN ONLY IN RESPECT OF RE-COMPUTATION OF DEDUCTION U/S 80HHC SO AS IT RELATES TO ASSESSMENT YEAR 200 1-02. NEEDLESS TO OBSERVE THAT WHILE RE-COMPUTING THESE DEDUC TIONS AS PER OUR DIRECTIONS, THE ASSESSING OFFICER WILL GIVE REASONABL E AND ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE AND AFTER PROVID ING SUCH OPPORTUNITY, THESE DEDUCTIONS WILL BE RE-COMPUTED AS P ER OUR ABOVE DIRECTIONS. WE DIRECT ACCORDINGLY. 6. SO FAR AS IT RELATES TO ISSUE REGARDING VALIDITY OR OTHERWISE OF REASSESSMENT PROCEEDINGS, IT HAS ALREADY BEEN MENTIONED T HAT THE LEARNED AR HAS NOT PRESSED THE SAID GROUND. THESE GROU NDS PERTAINS TO A.Y. 1999-2000 AND 2000-01, THEREFORE, THESE GROU NDS INCLUDING THE ADDITIONAL GROUNDS ARE DISMISSED BEING NOT PRESSED. 7. IN THE RESULT, APPEALS FOR A.Y. 1999-2000 AND A.Y. 2000-01 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES, AND THE APPEAL FOR A.Y. 2001-02 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.1660-1662/DEL/2008 6 THE ORDER PRONOUNCED IN THE OPEN COURT ON 20.04.201 2. SD/- SD/- [SHAMIM YAHYA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 20.04.2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES