ACIT CIR 16(1), MUMBAI V. MAYFAIR INTERNATIONAL, MUMBAI

ITA 1750/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59845 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-02-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 05-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, B, MUMBAI BEFORE HONBLE PRESIDENT SHRI G.E.VEERABHADRAPPA AND SHRI D.K.AGARWAL (JM) ITA NO.1749 AND 1750/MUM/2010 (ASSESSMENT YEARS:2002-03 AND 2003-04) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-16(1), MATRU MANDIR, MUMBAI-400007. M/S MAYFAIR INTERNATIONAL 16, SARVODAYA MILL COMPOUND, UNIT NO.15(15) & 15(16), TARDEO ROAD, MUMBAI-400034 PAN: AAFFM7392E APPELLANT V/S RESPONDENT DATE OF HEARING : 14.2.2012 DATE OF PRONOUNCEMENT : 22.2.2012 APPELLANT BY : SHRI ARUN KUMAR RESPONDENT BY : NONE O R D E R PER D.K.AGARWAL (JM) THESE TWO APPEALS PREFERRED BY THE REVENUE ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 3.12.20 09 AND 15.12.2009 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEARS 2002-03 AND 2003-04 AGAINST THE DIRECTION TO THE AO TO TREAT THE SALE OF DEPB LICE NSES AS DECIDED BY THE SPECIAL BENCH OF TRIBUNAL IN TOPMAN EXPORTS V/S ITO (2010) 318 ITR 87 ITA NO.1749 AND 1750/MUM/2010 (AYS:2002-03 AND 2003-04) 2 (MUM)(SB)(AT) AND CALCULATE DEDUCTION U/S 80HHC. SINCE FACTS ARE IDENTICAL AND ISSUES INVOLVE ARE COMMON, BOTH THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN THIS CASE, THE ORIGINAL NOTICE OF DATE OF HEARING WAS SENT BY RPAD FIXING THE CASE FOR 3.2.2011. HOWEVER, THE CASE WAS ADJOURNED AND THE FINAL NOTICE OF DATE OF HEARING WAS PLACED ON NOTI CE BOARD FIXING THE DATE OF HEARING ON 14.2.2012. HOWEVER, AT THE TIME OF HEARING, NONE WAS PRESENT O N BEHALF OF THE ASSESSEE NOR FILED ANY APPLICATION FO R ADJOURNMENT OF THE CASE. THEREFORE, IT WAS DECIDED TO DISPOSE OF THE APPEAL EX-PARTE, QUA THE ASSESSEE, O N MERITS AFTER HEARING THE LEARNED D.R. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF EXPORT. THE SCRUTINY ASSESSMENTS U/S 143(3) WERE COMPLETED FOR THE ASSESSMENT YEARS 2002-03 AND 2003-04 ON 31.1.2005 AND 14.9.2005 DETERMINING THE TOTAL INCOM E OF THE ASSESSEE AT RS.73,60,470/- AND RS.41,89,020 /- AS AGAINST THE RETURNED INCOME OF RS.22,28,580/- A ND RS.19,63,656/- RESPECTIVELY. ON APPEAL, THE LD. ITA NO.1749 AND 1750/MUM/2010 (AYS:2002-03 AND 2003-04) 3 CIT(A), HOWEVER, DIRECTED THE AO TO GIVE OPPORTUNI TY TO THE ASSESSEE TO PROVE THAT IT HAD FULFILLED CONDITIONS AS PROVIDED UNDER THE 3 RD PROVISO TO SECTION 80HHC(3) OF THE INCOME TAX ACT, 1961 (THE ACT). ACCORDINGLY, FRESH OPPORTUNITY WAS PROVIDED TO THE ASSESSEE. THE AO OBSERVED THAT THE MAJOR ADDITION TO THE RETURNED INCOME WAS ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 80HHC OF THE ACT ON ACCOUNT OF S ALE OF DEPB LICENSE. ACCORDING TO THE AO, THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS LAID DOWN UNDER T HE THIRD PROVISO TO SECTION 80HHC(3) AND THE BOARD CIRCULAR NO.2/06 DATED 17.1.2006 AND, HENCE, THE AO COMPLETED THE ASSESSMENTS AT THE SAME INCOME AS ASSESSED ORIGINALLY VIDE SEPARATE ORDERS DATED 4.3.2008. ON APPEAL, THE LD. CIT(A) FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF TOPMAN EXPORTS VS. ITO (SUPRA) DIRECTED T HE AO TO TREAT THE SALE OF DEPB LICENSE AS PER THE O RDER OF THE TRIBUNAL (SUPRA) AND RECALCULATE THE DEDUC TION U/S 80HHC OF THE ACT. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US CHALLENGING I N ALL THE GROUNDS THE DIRECTION OF THE LD. CIT(A) TO ITA NO.1749 AND 1750/MUM/2010 (AYS:2002-03 AND 2003-04) 4 RECOMPUTE THE DEDUCTION AS PER THE ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL (SUPRA). 5. AT THE TIME OF HEARING, THE LD.DR FAIRLY SUBMIT S THAT THAT THIS ISSUE STANDS COVERED IN FAVOUR OF T HE ASSESSEE BY THE RECENT DECISION OF THE HONBLE SUPREME COURT IN M / S TOPMAN EXPORTS V/S CIT AND ORS. CONNECTED APPEALS IN CIVIL APPEAL NO.1699 OF 2012 ARISING OUT OF SLP ( C ) NO . 26558 OF 2010, DATED 8.2.2012, THEREFORE, THE ISSUE MAY BE DECIDED ACCORDINGLY. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD.DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE ARE OF THE OPINION THAT THE ISSUE INVO LVED IN THE PRESENT CASE IS NO MORE RES INTEGRA AND IS COVERED BY THE DECISION OF THE HONBLE APEX COU RT IN THE CASE OF TOPMAN EXPORTS V/S CIT (SUPRA) WHERE IN IT HAS BEEN HELD THAT NOT THE ENTIRE AMOUNT RECEIVE D BY THE ASSESSEE ON SALE OF DEPB, BUT THE SALE VALUE LESS THE FACE VALUE OF THE DEPB WILL REPRESENT PROF IT ON TRANSFER OF DEPB BY THE ASSESSEE. RESPECTFULLY FOLLOWING THE ABOVE AUTHORITATIVE PRONOUNCEMENT OF THE HONBLE SUPREME COURT, WE DIRECT THE AO TO ITA NO.1749 AND 1750/MUM/2010 (AYS:2002-03 AND 2003-04) 5 RECOMPUTE THE DEDUCTION U/S 80HHC IN ACCORDANCE WITH THE AFORESAID JUDGMENT OF THE HONBLE APEX COU RT AND ACCORDINGLY THE ORDERS PASSED BY THE LD.CIT(A ) FOR THE ABOVE ASSESSMENT YEARS DO NOT CALL FOR AN Y INTERFERENCE. THE GROUNDS TAKEN BY THE REVENUE ARE , THEREFORE, REJECTED. 7. IN THE RESULT, THE REVENUES APPEALS STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22ND FEB.,2 012. SD SD (G.E.VEERABHADRAPPA) (D.K.AGARWAL ) PRESIDENT JUDICIAL MEMBER MUMBAI, DATED 22ND FEBRUARY,2012. SRL: COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUM BAI