ACIT CIR 16(2), MUMBAI V. MINESTONE, MUMBAI

ITA 1662/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7939 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 03-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Assessee Lawyers: D R RAIYANI
• Keywords: Business income; Opportunity of being heard
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SMT.ASHA VIJAYARAGHAVA N, JM ITA NO.1662/MUM/2010 : ASST.YEAR 2003-2004 THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 16(2) MUMBAI. VS. M/S.MINESTONE 9, B KRISHNA SANGHI PATH, GAMDEVI MUMBAI 400 006. PAN : AAAFM0444L. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARI GOVIND SINGH RESPONDENT BY : SHRI D.R.RAIYANI O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 03.12.2009 IN RELATION TO ASSESSMENT YEAR 2003-2004 . 2. GROUND NO.1 IS AGAINST THE TREATMENT GIVEN TO FO REIGN EXCHANGE RATE DIFFERENCE OF EARLIER YEARS EXPORT AS EXPORT TURNO VER FOR THE YEAR DISREGARDING THE PROVISIONS OF SECTION 80HHC (4C) EXPLANATION (B) . 3. BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS A ND CIRCUMSTANCES OF THIS GROUND ARE SIMILAR TO THOSE OF THE ORDER OF THE SPE CIAL BENCH OF THE TRIBUNAL IN ACIT VS. PRAKASH L SHAH [(2008) 115 ITD 167 (MUM)(S B)] WHEREIN IT HAS HELD THAT FOREIGN EXCHANGE GAIN IS PART OF EXPORT TURNOV ER FOR THE PURPOSES OF SECTION 80HHC AND FURTHER IT HAS BEEN HELD THAT THE DEDUCTI ON IS TO BE ALLOWED IN THE FIRST YEAR AND NOT IN THE SECOND YEAR. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFF ICER FOR DECIDING IT AFRESH IN THE LIGHT OF THE AFORE-NOTED SPECIAL BENCH ORDER, AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO.1662/MUM/2010 M/S.MINESTONE 2 4. GROUND NO.2 IS AGAINST THE TREATMENT OF INTEREST INCOME EARNED ON FIXED DEPOSIT AS `BUSINESS INCOME INSTEAD OF `INCOME FRO M OTHER SOURCES AND THEREAFTER NETTING OF SUCH INTEREST AGAINST THE INTEREST PAID. THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD A COPY OF THE ORDER P ASSED BY THE TRIBUNAL IN ITS OWN CASE IN THE IMMEDIATELY TWO PRECEDING YEARS BY WHIC H SUCH GROUND HAS BEEN DECIDED AGAINST THE ASSESSEE. RESPECTFULLY FOLLOWIN G THE PRECEDENT AND IN THE ABSENCE OF ANY DISTINGUISHING FEATURE IN THE FACTS OF THIS YEAR VIS-A-VIS OF THE EARLIER YEAR, HAVING BEEN BROUGHT TO OUR NOTICE, WE ALLOW T HIS GROUND OF APPEAL. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 25 TH DAY OF MARCH, 2011 . SD/- SD/- (ASHA VIJAYARAGHAVAN) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 25 TH MARCH, 2011. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) XXVII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.