GSNS SPUNTEX P. LTD, MUMBAI V. ITO WD 4(2)(3), MUMBAI

ITA 1754/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2301 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 20-08-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 13-03-2012
• Court: TRIBUNAL
• Department Lawyers: HARSHAR VENGURLEKAR
• Section: 80HHC; 28

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE HONBLE S/SHRI SAKTIJIT DEY (JM) , AND ASHWANI TANEJA (AM) ./I.T.A. NO.1754/MUM/2012 ( / ASSESSMENT YEAR:2001-02) GSNS SPUNTEX PVT. LTD., RAJESH KALYAN BHAVAN, GROUND FLOOR, 307-309, KALBADEVI ROAD, MUMBAI-400002. / VS. THE INCOME TAX OFFICER, 4(2)(3), AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020 ( / APPELLANT) .. ( / RESPONDENT) ./ ./PAN. :AABCG6262G / APPELLANT BY SHRI KAPIL JAIN /RESPONDENT BY SHRI HARSHAR VENGURLEKAR ! / DATE OF HEARING : 20.10.2015 ! /DATE OF PRONOUNCEMENT: 04. 12.2015 / O R D E R PER ASHWANI TANEJA, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE CHALLE NGING THE APPEAL ORDER PASSED BY THE COMMISSIONER OF INCOME TAX- (AP PEALS) DATED 10.1.2012 FOR THE ASSESSMENT YEAR 2001-02. ITA NO1754/M/2012. 2 2. THE SOLITARY ISSUE RAISED BY THE ASSESSEE BEFORE US IS THAT WHILE COMPUTING THE DEDUCTION U/S 80HHC, WHETHER THE AMOU NT OF CASH ASSISTANCE RECEIVED BY WAY OF EXCISE REFUND SHALL BE ADDED BACK AT THE RATE OF 90% OR NOT. 3. IT HAS BEEN ARGUED BY THE LD. COUNSEL THAT THE A SSESSEE IS 100% EXPORT ORIENTED ORGANIZATION. AS PER THE PROVISIONS OF SECTION 28(IIIB), THE CASH ASSISTANCE, BY WHATEVER NAME MAY BE CALLED , SHALL BE ASSESSED AS PROFIT AND GAINS OF BUSINESS OR PROFESS ION OF THE ASSESSEE. FURTHER, AS PER THE PROVISIONS OF SECTION 80HHC(3), THE FIRST PROVISO OF THE SECTION 28 (IIIB) SHALL BE TAKEN INT O CONSIDERATION FOR COMPUTATION DEDUCTION U/S 80 HHC I.E.90% OF THIS AM OUNT SHALL BE DEDUCTED AND ADDED BACK FOR COMPUTING THE AMOUNT O F PROFIT ELIGIBLE FOR DEDUCTION U/S 80HHC. IN SUPPORT OF HIS CONTENT ION, HE HAS PLACED RELIANCE ON THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF HERO HONDA VS JCIT 103 ITD 0157. HE ALSO DREW OU R ATTENTION TO PAGE FOUR OF THE SAID JUDGMENT. 4. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE WORD USED IN SECTION IS CASH ASSISTANCE AND THEREFORE EXCISE REF UND SHOULD NOT BE INCLUDED THEREIN. IT IS ALSO SUBMITTED THAT THE EX CISE REFUND RECEIVED IS NOT GRANTED FOR THE PURPOSE OF EXPORT PROMOTION ETC AND THE LEGISLATURE HAS NOT ENVISAGED TO PROVIDE BENEFIT U/ S 80HHC ON THE AMOUNTS OF THIS NATURE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTI ES, GONE THROUGH THE RECORD AVAILABLE BEFORE US, THE ORDERS OF AUTHORITIES ITA NO1754/M/2012. 3 BELOW AND CASE LAW RELIED UPON BY THE PARTIES. SE CTION 28(IIIB) READS AS UNDER : 28. PROFITS AND GAINS OF BUSINESS OR PROFESSION.- THE FOLLOWING INCOME SHALL BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, .... (IIIB) CASH ASSISTANCE (BY WHATEVER NAME CALLE D) RECEIVED OR RECEIVABLE BY ANY PERSON AGAINST EXPORTS UNDER ANY SCHEME OF THE GOVERNMENT OF INDIA ; THE PERUSAL OF THIS SECTION SUGGESTS THAT CASH ASSI STANCE BY WHATEVER NAME CALLED HAS BEEN ENVISAGED TO BE INCLUDED UNDER THIS SECTION. THIS SECTION HAS BEEN PROVIDED IN THE MANNER THAT I T CAN INCLUDE AMOUNT OF ANY NATURE WHICH HAS BEEN RECEIVED BY WAY OF CASH ASSISTANCE. LD COUNSEL HAS PLACED RELIANCE ON THE DIRECT JUDGMENT OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF HERO HONDA (SUPRA) WHEREIN IT HAS BEEN HELD THAT: AS FAR AS THE CUSTOMS DUTY BENEFIT RECEIVED BY THE ASSESSEE UNDER THE ADVANCE LICENSING SCHEME IS CONCERNED, AS RIGHTLY HELD BY THE CIT(A), THE SAME WOULD NOT FALL WITHIN THE AMBIT OF SECTION 28(IIIC) OF THE ACT, BUT WOULD FALL WIT HIN THE PARAMETERS OF SECTION 28(IIIB)OF THE ACT. THIS WOUL D BE A RESIDUARY CLAUSE AS HELD BY THE TRIBUNAL AND, THERE FORE, ANY OTHER RELIEFS GIVEN IN ANY FORM TO AN EXPORTER WILL FALL WITHIN THE SAID CLAUSE. THE EXCISE DUTY BENEFIT SHOULD FORM PA RT OF THE INCOME FROM BUSINESS OF THE ASSESSEE WHILE COMPUTIN G DEDUCTION UNDER SECTION 80HHC OF THE ACT. PRATIBHA SYNTEX LTD. (1999) 63 TTJ (AHD) 409 RELIED ON: 5. THUS, THIS ISSUE IS SQUARELY COVERED IN FAVOUR O F THE ASSESSEE BY THE AFORESAID DECISION. NO CONTRARY DECISION WAS BROUGHT TO OUR NOTICE BY THE OTHER SIDE. THUS RESPECTFULLY FOLLOWI NG THE SAME, WE ALLOW THE GROUND OF APPEAL TAKEN BY THE ASSESSEE. ITA NO1754/M/2012. 4 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED ACCORDINGLY ON 4 TH DEC, 2015. $ % & '( ) 4 TH DEC, 2015 SD/- SD/- (SAKTIJIT DEY) (ASHWANI TANEJA) JUDICIAL MEMBER ACCO UNTANT MEMBER % MUMBAI: 4 TH DEC, 2015. . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. - ( ) / THE CIT(A)- CONCERNED 4. - / CIT CONCERNED 5. ./ 0 , ! 0 , % / DR, ITAT, MUMBAI CONCERNED 6. 1 / GUARD FILE. ( / BY ORDER, (ASSTT. REGISTRAR) ! 0 , % /ITAT, MUMBAI