Mr George Varughese, Kottayam V. Assistant Commissioner of Income Tax, Kottayam

ITA 181/COCH/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4585 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 07-04-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 03-04-2009
• Court: TRIBUNAL
• Department Lawyers: T J VINCENTSR
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NO.181/COCH/2009 ASSESSMENT YEAR:2002-03 MR. GEORGE VARGHESE, KOTTAYAM. PA NO.ABLPV 1502A VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOTTAYAM. (APPELLANT) ( RESPONDENT ) & I.T.A.NO.183/COCH/2009 ASSESSMENT YEAR:2002-03 THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOTTAYAM. VS. MR. GEORGE VARGHESE, KOTTAYAM. PA NO.ABLPV 1502A (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI MATHEW JOSEPH REVENUE BY SHRI T.J.VINCENT,SR.DR O R D E R PER N.VIJAYAKUMARAN,J.M: THESE ARE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE FOR THE ASSESSMENT YEAR 2002-03. BOTH THE APPEALS ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(APPEALS)-IV, KOCHI, DATED 30-12-2008. ITA NOS. 181 & 183/COCH/2009 SHRI GEORGE VARGHESE 2 2. IN THE ASSESSEES APPEAL THE FIRST ISSUE IS ON T HE ELIGIBILITY OF DEDUCTION U/S.80IB OF THE ACT. AFTE R CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT THE COCHIN BENC H OF THE TRIBUNAL HAS DECIDED THE VERY SAME ISSUE IN THE ASS ESSEES OWN CASE FOR THE ASSESSMENT YEAR 1999-2000, 2000-01 , 2001-02, 2003-04 AND 2004-05 IN ITA NOS. 593 TO 596 AND 728/COCH/2007 DATED 19-12-2008, IN FAVOUR OF THE AS SESSEE AND AGAINST THE REVENUE. FOLLOWING THE SAID ORDE R, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) ON THIS ISS UE OF 80IB DEDUCTION AND HOLD THAT THE ASSESSEE IS ELIGIBLE TO THIS CLAIM. ACCORDINGLY, WE ALLOW THE APPEAL OF THE ASSESSEE ON THIS ISSUE. 3. THE NEXT ISSUE IS ON THE DEDUCTION U/S.80HHC VIS --VIS 80IB OF THE ACT. AFTER HEARING BOTH SIDES, WE AR E OF THEE VIEW THAT THE DECISION OF THE JURISDICTIONAL HIGH C OURT IN THE CASE OF OLAM EXPORTS(I) LTD. REPORTED IN(2011) 332 ITR 40 AND THE DECISION OF THE SPECIAL BENCH OF INCOME-TAX APPELLATE TRIBUNAL, CHENNAI BENCH IN THE CASE OF RO GINI GARMENTS 294 ITR (AT) 15 ARE DIRECTLY ON THE ISSUE. HENCE, WE CONFIRM THE ORDER OF THE LD. CIT(APPEALS) ON TH IS POINT AND DECIDE THE ISSUE IN FAVOUR OF THE REVENUE AND A GAINST THE ASSESSEE. ITA NOS. 181 & 183/COCH/2009 SHRI GEORGE VARGHESE 3 4. THE LAST ISSUE IN THE ASSESSEES APPEAL IS WHETH ER THE EXCHANGE RATE FLUCTUATION WILL QUALIFY FOR DEDUCTIO N U/S.80IB. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE LD. CIT (APPEALS) CAME TO THE CONCLUSION THAT IT IS NOT ARISING OUT O F THE ACTIVITY OF THE INDUSTRIAL UNDERTAKING. IN OTHER W ORDS, IT IS NOT DERIVED FROM THE INDUSTRIAL UNDERTAKING BUT ONL Y INCIDENTAL TO THE PROFIT AND GAINS. HENCE, HE HAS RIGHTLY TREATED THIS AS MISCELLANEOUS INCOME. THEREFORE, WE AGREE WITH THE FINDINGS OF THE LD. CIT(APPEALS) THAT THIS AMOUNT ARISING FROM FOREIGN EXCHANGE RATE FLUCTUATION WILL NOT QUALIFY UNLESS THE NEXUS IS ESTABLISHED. THIS GR OUND IS ALSO DECIDED AGAINST THE ASSESSEE AND IN FAVOUR OF THE R EVENUE. 5. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. 6. IN THE DEPARTMENTAL APPEAL, THE FIRST ISSUE IS O N THE ISSUE OF DELETION U/S.36(1)(III). WE HAVE HEARD R IVAL SUBMISSIONS AND PERUSED THE ENTIRE MATERIALS AVAILA BLE ON RECORD. WE FIND THAT THIS ISSUE HAS BEEN DEALT BY THE TRIBUNAL AT LENGTH IN ITS ORDER DATED 19-12-2008 IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1999-20 00, 2000-01, 2001-02, 2003-04 AND 2004-05 IN ITA NOS. 5 93 TO 596 AND 728/COCH/2007, I.E. EXCEPT FOR THE ASSESSME NT YEAR ITA NOS. 181 & 183/COCH/2009 SHRI GEORGE VARGHESE 4 2002-03 AND DECIDED IN FAVOUR OF THE ASSESSEE AND A GAINST THE REVENUE. THE FACTS BEING IDENTICAL AND NO OTH ER CHANGE IN THE CIRCUMSTANCES HAS BEEN BROUGHT ON BEHALF OF THE DEPARTMENT, WE ARE UNABLE TO ACCEPT THE ARGUMENT OF THE LD. SR.DR. THEREFORE, THIS GROUND NO.2 IS DECIDED AGA INST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 7. COMING TO THE DEPB RECEIPTS WILL QUALIFY FOR DED UCTION U/S.80IB, THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT (2009) 317 ITR 218 IS DIRECTLY AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. RESPECTFULLY FOLLOWING THE SAID DECISION OF THE HON BLE APEX COURT, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEAL S) AND RESTORE THAT OF THE ASSESSING OFFICER. ACCORDING LY, THIS ISSUE IS DECIDED IN FAVOUR OF THE REVENUE AND AGAIN ST THE ASSESSEE. THUS, THE APPEAL OF THE REVENUE PARTLY ALLOWED. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AND THE REVENUE ARE PARTLY ALLOWED. SD/- SD/- (SANJAY ARORA) (N.VIJAYKUMARAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM, DATED THE 18 TH APRIL,2011. PM. ITA NOS. 181 & 183/COCH/2009 SHRI GEORGE VARGHESE 5 COPY FORWARDED TO: 1. MR. GEORGE VARGHESE,(PROP. M/S. GENERAL RUBBERS, P. JOHN ZACHARIA BUILDING, KOTTAYAM. 2. THE ACIT., CIRCLE-1, KOTTAYAM. 3. CIT(A)-IV, KOCHI. 4. CIT, KOTTAYAM. 5. D.R.