MID INDIA POWWER AND STEEL LTD, MUMBAI V. ACIT 6(3), MUMBAI

ITA 1777/MUM/2010

• Counselvise Citation: 177719914 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-08-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 08-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Assessee Lawyers: AJAY R SINGH
• Section: 143(3); 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI, J. SUDHAKAR REDDY, ACCOUNTANT MEMBER A ND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 1777/MUM./2010 (ASSESSMENT YEAR : 2003-04 ) MID INDIA POWER & STEEL LTD. 621, TULSIANI CHAMBERS NARIMAN POINT, MUMBAI 400 021 PAN AACM7130L .. APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX-6(3) AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020 .... RESPONDENT ASSESSEE BY : MR. AJAY R. SINGH REVENUE BY : MR. P.C. MAURYA DATE OF HEARING 23.8.2011 DATE OF ORDER 30.8.2011 O R D E R PER J. SUDHAKAR REDDY, A.M. THIS APPEAL PREFERRED BY THE REVENUE, IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 9 TH NOVEMBER 2009, PASSED BY THE COMMISSIONER (APPEALS)-XII, MUMBAI, FOR ASSESSMENT YEAR 2003-04. GROUND NO.1, READS AS FOLLOWS:- 1. THE LEARNED CIT(A) ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER WHEREIN DEDUCTION UNDER SECTION 80HHC IS CA LCULATED BY REDUCING FREIGHT AND INSURANCE OF ` 1,12,20,850 FROM EXPORT TURNOVER WITHOUT REDUCING THE SAID AMOUNT FROM DIRECT COST. MID INDIA POWER & STEEL LTD. ITA NO.1777/M./2010 2 2. THE ASSESSING OFFICER, WHILE DETERMINING THE EXPORT TURNOVER, HAS REDUCED FREIGHT AND INSURANCE AND WHEREAS THESE ITE MS WERE NOT REDUCED FROM THE AMOUNT OF DIRECT COST. 3. LEARNED COUNSEL, MR. AJAY R. SINGH, ON BEHALF OF TH E ASSESSEE, SUBMITS BEFORE US THAT THE FREIGHT AND INSURANCE SHOULD NOT ONLY BE REDUCED FROM THE EXPORT TURNOVER BUT ALSO SHOULD BE REDUCED FROM THE DIRECT COST WHILE COMPUTING RELIEF UNDER SECTION 80HHC OF THE ACT. R ELIANCE IS PLACED ON THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN CI T V/S KING METAL WORKS, 329 ITR 426 (BOM.). THE HON'BLE JURISDICTIONAL HIGH COURT IN THIS CASE HAS HELD THAT FREIGHT AND INSURANCE CANNOT BE REGARDED AS COST DIRECTLY ATTRIBUTABLE TO THE TRADING GOODS WITHIN THE MEANIN G OF CLAUSE (B) OF EXPLANATION TO SUB-SECTION 3 OF SECTION 80HHC. IN V IEW OF THIS BINDING JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT, WE S ET ASIDE THE IMPUGNED ORDER OF THE COMMISSIONER (APPEALS) AND ALLOW GROUN D NO.1 OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO RE-COMPUTE THE RELIEF UNDER SECTION 80HHC, AFTER REDUCING FREIGHT AND INSURANCE FROM TH E DIRECT COST. 4. GROUNDS NO.2 AND 3, READ AS FOLLOWS:- 2. THE LEARNED CIT(A) ERRED IN NOT ADJUDICATING THE GROUND INTEREST TO DISALLOWANCE OF ` 75,000 AS CAPITAL LOSS ON SALE OF MOTORCAR. 3. THE SAID CAPITAL LOSS ON SALE OF MOTORCAR WAS AL READY OFFERED AND ADDED BACK TO TOTAL INCOME IN THE ORIGINAL ASSE SSMENT ORDER PASSED U/S 143(3) THEREFORE THIS WOULD AMOUNT TO DO UBLE ADDITION. 2. LEARNED COUNSEL FOR THE ASSESSEE DID NOT WISH TO PR ESS THESE GROUNDS. CONSEQUENTLY, THESE GROUNDS ARE DISMISSED AS NOT PRESSED . 3. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST 2011 SD/- VIJAY PAL RAO JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 30.8.2011 MID INDIA POWER & STEEL LTD. ITA NO.1777/M./2010 3 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, B BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI