Bosch Rexroth (India) Ltd., Ahmedabad V. The ACIT.,Range-1, Ahmedabad

ITA 1927/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9206 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 11-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P M SHUKLA
• Assessee Lawyers: MRS APARNA PARELKAR
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI P.K.BANSAL, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.1927/AHD/2009 ASSESSMENT YEAR:2003-04 DATE OF HEARING:3.8.09 DRAFTED:3.8.09 BOSCH REXROTH (INDIA) LIMITED, NR. VATVA RAILWAY STATION, VATVA, AHMEDABAD PAN NO.AAACM9898F V/S . ASST. COMMISSIONER OF INCOME-TAX (OSD), RANGE-1, AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- MRS. APARNA PARELKAR, AR RESPONDENT BY:- SHRI P.M. SHUKLA, SR. DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-VI, AHMEDABAD IN APPEAL NO. CI T(A)-VI/ACIT(OSD) R- I/250/08-09 DATED 24-02-2009. THE ASSESSMENT WAS FR AMED BY THE DCIT (OSD), RANGE-1, AHMEDABAD U/S.143(3) OF THE INCOME-TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 28-02-2006 FOR T HE ASSESSMENT YEAR 2003-04. THE PENALTY UNDER DISPUTE WAS LEVIED BY THE ACIT(OSD), RANGE-1, AHMEDABAD U/S./271(1)(C)(C) OF THE ACT VIDE HIS ORDER 28-03-2 008. 2. AT THE OUTSET THE LD. COUNSEL FOR THE ASSESSEE S TATED THAT THE DISALLOWANCE MADE ON THE CLAIM OF DEDUCTION U/S.80HHC OF THE ACT IS THE SUBJECT-MATTER FOR LEVY OF PENALTY U/S.271(1) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE FILED THE COPY OF TRIBUNALS ORDER IN QUANTUM IN ITA NO.30 AND CO 76/AHD/2007 DATED 15-05-2009, WHEREBY THE TRIBUNAL HAS ALLOWED THE CLAIM OF THE A SSESSEE BY GIVING FOLLOWING FINDING IN PARA-10 AND 11:- 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THIS ISSUE TO BE SQUARELY COVERED IN FA VOUR OF THE ASSESSEE BY THE ITA NO.1927/AHD/2009 A.Y.2003-04 BOSCH REXROTH (I) LTD. V. ACIT (OSD) RNG-1, ABD PAGE 2 DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F CIT V. LAKSHMI MACHINE WORKS (2007) 290 ITR 667 (SC)AND THE DECISION OF THE SPCI AL BENCH OF ITAT CALCUTTA IN THE CASE OF IFB AGRO INDUSTRIES LTD. V. DCIT (2002) 83 ITD 97 (CAL) ((SB)), WHEREIN THE SPECIAL BENCH OF TRIBUNAL HELD THAT THE EXCISE DUTY AND SALES TAX DO NOT FORM PART OF TURNOVER FOR THE PURPOSE OF COMPUTING DEDUCTION U/S . 80HHC. 11. SIMILARLY, THE HON'BLE SUPREME COURT IN THE CAS E OF CIT V. LAKSHMI MACHINE WORKS (2007) 290 ITR 667 (SC) HAS HELD AS UNDER: THE PRINCIPAL REASON FOR ENACTING A FORMULA IN SEC TION 80HHC OF THE INCOME- TAX ACT, 1961, IS TO DISALLOW A PART OF THE CONCESS ION THEREUNDER WHEN THE ENTIRE DEDUCTION CLAIMED CANNOT BE REGARDED AS RELATING TO EXPORTS. THEREFORE, WHILE INTERPRETING THE WORDS TOTAL TURNOVER IN THE FORM ULA IN SECTION 80HHC ONE HAS TO GIVE A SCHEMATIC INTERPRETATION. THE VARIOUS AMENDM ENTS MADE THEREIN SHOW THAT RECEIPTS BY WAY OF BROKERAGE, COMMISSION, INTEREST, RENT, ETC., DO NOT FORM PART OF BUSINESS PROFITS AS THEY HAVE NO NEXUS WITH THE ACT IVITY OF EXPORT. THE AMENDMENTS MADE FROM TIME TO TIME INDICATE THAT THEY BECAME NE CESSARY IN ORDER TO MAKE THE FORMULA WORKABLE. IF SO, EXCISE DUTY AND SALES TAX ALSO CANNOT FORM PART OF THE TOTAL TURNOVER UNDER SECTION 80HHC(3): OTHERWISE THE FOR MULA BECOMES UNWORKABLE. RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND ALLOW THE GROUND RAISED BY THE ASSESSE E. IN VIEW OF THE ABOVE, WE FIND THAT THIS IS NOT AT A LL THE ISSUE WHICH ATTRACTS PENALTY PROVISIONS U/S.271(1) OF THE ACT AND ACCORDINGLY WE DELETE TH E PENALTY AND REVERSE THE ORDERS OF THE LOWER AUTHORITIES. ACCORDINGLY, THIS APPEAL OF THE ASSESSEE IS ALLOWED. 3. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 04/09/2009 SD/- SD/- (P.K.BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED :04/09/2009 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- VI, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD