The ACIT, Circle-9, Surat V. M/s. R. Jaykumar & Co., Surat

ITA 1787/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9196 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 28-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Keywords: Gross profit estimation; Set aside
• Section: 143(3); 142(1); 80HHC; 143(2); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI D.C.AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 27/08/09 DRAFTED ON:02/09/09 ITA NO.1787/AHD/2009 ASSESSMENT YEAR : 2004-05 THE ACIT CIRCLE-9 SURAT VS. M/S.R.JAYKUMAR & CO. A/1 KRINK TOWER, MINI BAZAR VARACHHA ROAD SURAT PAN/GIR NO. : AADFR 1175 N (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI C.K.MISHRA, DR RESPONDENT BY: SHRI HARDIK VORA, AR O R D E R PER D.C.AGRAWAL , ACCOUNTANT MEMBER :- THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE L EARNED CIT(APPEALS)-V, SURAT DATED 27/02/2009 PASSED FOR ASSESSMENT YEAR 2004-05, BY RAISING FOLLOWING GROUND(S): 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) IS RIGHT IN LAW ALLOWING THE CLAIM OF THE ASSESSEE U/S.80HHC OF THE ACT ENHANCING VIDE HIS CERTIFICATE IN FORM NO.10CCA FROM RS.2,89,427/- TO RS.9,64,758/- ? IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT( A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2004-05 ON 04/02/2005 DECLARING THE ITA NO.1787/AHD /2009 ACIT VS. M/S. R.JAYKUMAR & CO. ASST.YEAR 2004-05 - 2 - TOTAL NET PROFIT OF RS.9,64,758/- AND HAS CLAIMED D EDUCTION U/S.80HHC OF THE I.T. ACT, 1961 OF RS.2,89,427/-. T HE RETURN WAS TAKEN UP FOR SCRUTINY U/S. 143(3) OF THE I.T. ACT, 1961 AND ASSESSMENT OF THE INCOME OF THE ASSESSEE WAS MADE AT RS.31,54, 688/-. DEDUCTION U/S.80HHC OF THE I.T. ACT, 1961 WAS ENHANCED TO R S.9,46,406/-IN VIEW OF INCREASE IN THE PROFIT. THE ASSESSEE PREF ERRED APPEAL BEFORE CIT(APPEALS) AGAINST THE ADDITION MADE WHICH WAS D ISMISSED REJECTING THE CONTENTION OF THE ASSESSEE. HOWEVER, IT WAS NOTICED SUBSEQUENTLY THAT THE DOCUMENTS WHICH COULD PROVE T HAT ASSESSEE HAS RECEIVED THE SALE PROCEEDS OF FOREIGN EXCHANGE IN T IME WERE NOT PLACED ON RECORD AS THE ASSESSEE HAS NOT PLACED TH E CERTIFICATE IN FORM NO.10CCAC. CONSIDERING THIS FACT, THE ELIGIBILITY OF ASSESSEE FOR CLAIM U/S. 80HHC OF THE I.T. ACT, 1961 WAS DOUBTED . IN VIEW OF THIS, THE ASSESSMENT WAS RE-OPENED U/S. 147 OF THE IT ACT. NOTICE U/S. 148 OF THE IT ACT WAS ISSUED TO THE ASSESSEE WHICH WAS DULY SERVED ON HIM ASSESSEE ON 28/03/2008. ASSESSEE VIDE LETTER DATED 30/04/2008 REQUESTED TO CONSIDER THE RETURN OF INC OME FILED BY HIM FOR A.Y.2004-05 ON 04/02/2005 AS A RETURN FILED IN RESPONSE TO NOTICE ISSUED U/S. 148 OF THE IT ACT. HE ASKED FOR THE C OPY OF THE REASONS FOR REOPENING THE CASE. IT WAS PROVIDED TO HIM. SUBSEQUENTLY, NOTICE ITA NO.1787/AHD /2009 ACIT VS. M/S. R.JAYKUMAR & CO. ASST.YEAR 2004-05 - 3 - U/S. 143(2) AND 142(1) OF THE I.T. ACT, 1961 WERE I SSUED ASKING THE ASSESSEE TO FILE THE DOCUMENTS IN SUPPORT OF HIS CL AIM OF 80HHC. IN RESPONSE TO IT, THE ASSESSEE FURNISHED DOCUMENTS IN SUPPORT OF HIS CLAIM THAT EXPORT SALE PROCEEDS HAVE BEEN RECEIVED WITHIN TIME BY THE ASSESSEE AND THE SAME HAS BEEN VERIFIED AND PLACED ON RECORD. THE ASSESSING OFFICER NOTICED THAT THE CLAIM U/S.80HHC OF THE I.T. ACT, 1961 AS PER THE CERTIFICATE FURNISHED ALONG WITH RETURN OF INCOME IN FORM NO.10CCAC IS ONLY RS.2,89,427/-. THE SAID D EDUCTION U/S.80HHC WAS ENHANCED TO RS.9,46,406/- IN VIEW OF THE ADDITION ON ACCOUNT OF GROSS PROFIT BY ASSESSING OFFICER THROU GH ORDER PASSED U/S. 143(3) OF THE I.T. ACT, 1961. 3. ASSESSING OFFICER NOTICED FROM THE ASSESSMEN T ORDER PASSED BY ASSESSING OFFICER U/S.143(3) OF THE I.T. ACT DATED 21.12.2006 THAT THE ADDITION ON ACCOUNT OF GROSS PROFIT WAS MADE ON THE GROUND THAT THE CLOSING STOCK VALUE WAS NOT VERIFIABLE. THE ASS ESSING OFFICER HELD THAT IT HAS NOTHING TO DO WITH THE EXPORT PRO FITS OF THE ASSESSEE. HENCE, ENHANCEMENT OF THE DEDUCTION U/S.80HHC AS CL AIMED BY ASSESSEE VIDE HIS CERTIFICATE IN FORM NO.10CCAC FRO M RS.2,89,427/- TO RS.9,64,758/- WAS NOT ACCEPTED AND, HENCE, THE DEDUCTION ITA NO.1787/AHD /2009 ACIT VS. M/S. R.JAYKUMAR & CO. ASST.YEAR 2004-05 - 4 - U/S.80HHC WAS RESTRICTED TO RS.2,89,427/-. THE LD. ASSESSING OFFICER DISALLOWED THE CLAIM U/S.80HHC OF THE I.T. ACT, 196 1 ON THE ADDITION OF GROSS PROFIT ORIGINALLY MADE AND ACCEPTED THE CL AIM OF THE ASSESSEE THAT THE FOREIGN EXCHANGE WAS RECEIVED IN TIME. 4. IN APPEAL, THE LEARNED CIT(APPEALS) HELD THAT ONCE THE ESCAPED ASSESSMENT WAS EXPLAINED RELATING TO NON-RE CEIPT OF FOREIGN EXCHANGE WITHIN THE TIME LIMIT, THE JURISDICTION OF THE ASSESSING OFFICER STOPPED AT THAT TIME AND HE COULD NOT TAX ANY OTHER INCOME. ON MERIT, THE LEARNED CIT(APPEALS) ALLOWED THE CLAI M ON THE GROUND THAT EVEN ENHANCED GROSS PROFIT IS EXPORT PROFIT ON WHICH ASSESSEE IS ENTITLED TO DEDUCTION U/S.80HHC OF THE I.T. ACT, 19 61. 5. WE HAVE HEARD THE LD.DR AND THE LEARNED AUTHORIS ED REPRESENTATIVE OF THE ASSESSEE. THE DEPARTMENT HA S NOT RAISED ANY ISSUE REGARDING ALLOWANCE OF DEDUCTION U/S.80HHC OF THE I.T. ACT, 1961 ON ADDITIONS MADE FOR LOW GROSS PROFIT. IT H AS ONLY CHALLENGED THAT CLAIM U/S.80HHC OF THE I.T. ACT, 1961 WAS ALLO WED ON THE BASIS OF CERTIFICATE IN FORM NO.10CCA OF THE I.T. ACT, 1 961. IN OUR CONSIDERED VIEW, THIS OBJECTION IS UNCALLED FOR. ONCE THE ASSESSING ITA NO.1787/AHD /2009 ACIT VS. M/S. R.JAYKUMAR & CO. ASST.YEAR 2004-05 - 5 - OFFICER IS SATISFIED THAT FOREIGN EXCHANGE REMITTAN CE WAS RECEIVED IN TIME AND HE HAS NOT PROPOSED ANY ADDITION ON THIS A CCOUNT, THE QUESTION OF CHALLENGING THE SAME BEFORE THE TRIBUNA L SHOULD NOT ARISE. EVEN OTHERWISE, WE AGREE WITH THE FINDINGS OF THE LEARNED CIT(APPEALS) THAT ADDITION ON ACCOUNT OF GROSS PROF IT WILL ONLY ENHANCE EXPORT PROFIT WHICH IS ELIGIBLE FOR DEDUCT ION U/S.80HHC OF THE I.T. ACT, 1961. THEREFORE, THERE IS NO MERIT I N THE APPEAL FILED BY THE REVENUE, THE SAME IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 04/09/2009. SD/- SD/- ( MAHAVIR SINGH ) ( D.C.AG RAWAL ) JUDICIAL MEMBER ACCOUNTANT ME MBER AHMEDABAD; DATED 04/09/2009 T.C. NAIR COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. TH E RESPONDENT 3. THE CIT CONCERNED. 4. THE LD. CIT(APPEALS)-V, SURAT 5. THE DR, AHMEDABAD BENCH. 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD