ACIT 12(3), MUMBAI V. RAMA EXPORTS, MUMBAI

ITA 1795/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48904 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2001-2002
• Appeal Filed On: 08-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALEXANDER CHANDY
• Section: 80HHC; 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D : MUMBAI BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA. NO. 1795/MUM/2010 ASSESSMENT YEAR 2001-2002 ACIT 12 (3) MUMBAI 400 020 VS. M/S. RAMA EXPORTS MUMBAI 400 021 PAN AAAFR4632F (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI ALEXANDER CHANDY (SR. D.R.) FOR RESPONDENT : -NONE- ORDER PER D. MANMOHAN, V.P. 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 10-12-2009, PASSED BY THE CIT(A)-XXIII, MUMBA I. FACTS CONCERNING THE ONLY ISSUE IN DISPUTE ARE STATED IN BRIEF. ASSESSMENT WAS ORIGINALLY COMPLETED UNDER SECTION 143 (3) OF T HE ACT WHEREIN DEDUCTION UNDER SECTION 8HHC WAS DENIED ON THE GROU ND THAT THE ASSESSEE HAS NOT DERIVED ANY PROFIT FROM THE EXPORT S, AFTER EXCLUDING INCENTIVES I.E., DEPB RECEIPTS ETC., ASSESSEE WAS U NSUCCESSFUL BEFORE THE FIRST APPELLATE AUTHORITY; WHEREAS THE ITAT, K BENCH, MUMBAI RESTORED THE QUESTION OF COMPUTATION OF DEDUCTION U NDER SECTION 80HHC WITH CERTAIN DIRECTIONS. ACCORDINGLY, AN ORDE R WAS PASSED UNDER SECTION 143 (3) READ WITH SECTION 254 OF THE I.T. ACT DETERMINING THE DEDUCTION UNDER SECTION 80HHC AT NIL. 2. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A). IT WAS CONTENDED THAT EVEN BY VIRTUE OF PRO VISIONS TO SECTION 80HHC, AS AMENDED BY TAXATION LAWS AMENDMENT ACT, 2 005, INTEREST HAS TO BE NETTED OUT. LEARNED CIT(A) DECID ED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE MATTER I S SQUARELY COVERED BY THE DECISION OF THE SPECIAL BENCH OF ITAT, MUMBA I IN THE CASE OF 2 TOPMAN EXPORTS VS. ITO (2009) 318 ITR (AT) 87 (MUM. ) (SB). ACCORDINGLY, ASSESSING OFFICER WAS DIRECTED TO RECO MPUTE THE DEDUCTION UNDER SECTION 80HHC. 3. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), R EVENUE PREFERRED AN APPEAL BY RAISING THE FOLLOWING GROUND S : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE EN TIRE SALE PROCEEDS OF THE DEPB LICENCE CANNOT BE TAKEN A S PROFIT FOR THE COMPUTATION OF DEDUCTION U/S. 80HHC IN THE CASE OF THE ASSESSEE WITH A TURNOVER OF MORE TH AN RS. 10.00 CRORES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) BY FOLLOWING THE DECISION OF ITA T, MUMBAI SPECIAL BENCH IN THE CASE OF M/S. TOPMAN EXPORTS VS. ITO (OSD) 14 (2) IN ITA. NO. 5769/MUM/2006 DATED 11-08-2009 FAILED TO APPRECIATE THAT THE ASSESSEE WITH A TURNOVER OF MORE THAN RS.1 0.00 CRORES IS NOT ENTITLED FOR DEDUCTION U/S. 80HHC IN RESPECT OF DEPB RECEIPTS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE DE CISION OF ITAT MUMBAI SPECIAL BENCH IN THE CASE OF M/S. TOPMAN EXPORTS VS. ITO (OSD) 14(2) IN ITA NO. 5769/MUM/2006 DATED 11-08-2009 IS NOT ACCEPTED BY THE DEPARTMENT AND FURTHER APPEAL U/S. 260A IS BEIN G FILED BY THE DEPARTMENT. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESS ING OFFICER BE RESTORED. 4. NONE APPEARED FOR THE ASSESSEE. WE HAVE HEARD T HE LEARNED D.R. AND CAREFULLY PERUSED THE RECORD. THER E IS NO DISCUSSION IN THE ORDER OF THE ASSESSING OFFICER AS WELL AS TH E CIT(A) WITH REGARD TO THE ISSUE AS TO WHETHER SALE PROCEEDS OF DEPB LI CENCE SHOULD BE 3 TAKEN INTO CONSIDERATION AS PROFIT FOR THE COMPUTAT ION OF DEDUCTION UNDER SECTION 80HHC OF THE ACT. HOWEVER, THE ONLY P LEA OF THE REVENUE, IN THE INSTANT APPEAL, IS THAT THE DECISIO N OF THE ITAT, SPECIAL BENCH, MUMBAI IN THE CASE OF TOPMAN EXPORTS (SUPRA) IS NOT ACCEPTED BY THE DEPARTMENT AND AN APPEAL IS FILED A GAINST THE SAID ORDER ON THE GROUND THAT AN ASSESSEE WITH A TURNOVE R OF MORE THAN RS. 10 CRORES IS NOT ENTITLED FOR DEDUCTION UNDER S ECTION 80HHC IN RESPECT OF DEPB RECEIPTS. IT IS DIFFICULT TO APPREC IATE AS TO HOW THIS ISSUE ARISES OUT OF THE IMPUGNED ORDER OF THE LEARN ED CIT(A). HOWEVER, IN THE LIGHT OF DECISION OF THE HONBLE BOMBAY HIGH COURT, REVERSING THE DECISION OF THE ITAT, MUMBAI, SPECIAL BENCH IN THE CASE OF TOPMAN EXPORTS { SEE CIT VS. KALPATARU COLOURS & CH EMICALS (2010) 328 ITR 451 (BOM.) } WE SET ASIDE THE ISSUE TO THE FILE OF LEARNED CIT(A) WHO IS DIRECTED TO VERIFY AS TO WHETHER SUCH ISSUE ARISES OUT OF THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143 (3) READ WITH SECTION 254 AND IF SO, APPLY THE DECISION OF THE HO NBLE BOMBAY HIGH COURT (SUPRA). WITH THESE OBSERVATIONS THE APPEAL F ILED BY THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01 ST DAY OF JUNE, 2011. SD/- SD/- (T.R. SOOD) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 01 ST JUNE, 2011 VBP/- COPY TO 1. ACIT 12 (3), ROOM NO. 121, AAYAKAR BHAVAN, M.K. ROA D, MUMBAI 400 020. 2. M/S. RAMA EXPORTS, 404, TULSIANI CHAMBERS, 212, NAR IMAN POINT, MUMBAI 400 021 PAN AAAFR4632F 3. COMMISSIONER OF INCOME TAX (APPEALS)-23, MUMBAI 4. CIT-12, MUMBAI 5. DR D BENCH 6. GUARD FILE. (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI.