ACIT Range-II, V. Sag New Look,

ITA 1985/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8099 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 08-07-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 21-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MISRA
• Assessee Lawyers: B KISHORE
• Keywords: Depreciation
• Section: 80HHC; 80IB; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `G: NEW DELHI BEFORE SHRI R.P.TOLANI,JM AND SHRI K.D. RANJAN, A M I.T.A. NO.1601 & 1985/DEL OF 2008 ASSESSMENT YEARS: 2003-04 &2004-05 ACIT, RANGE-II, M/S SAG NEW LOOK. MORADABAD. VS TAVELA STREET, MORADABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B. KISHORE DEPARTMENT BY : S HRI P.K. MISRA ORDER PER R.P. TOLANI: JM THESE ARE TWO REVENUES APPEALS, ONE COMMON GROUND RAISED IN BOTH THE APPEALS ARE AS UNDER: 1. THAT THE LD. CIT(A), BAREILLY, HAS ERRED IN LAW IN ALLOWING DEDUCTION U/S 80IB AND 80HHC OF THE INCOME-TAX ACT, 1961 ON GROSS BUSINESS PROFIT. 2. LEARNED COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT GROUND NO.1 IS COVERED IN FAVOUR OF REVENUE AND AGAINST THE ASSESS EE BY DELHI SPECIAL BENCH JUDGMENT IN THE CASE OF ACIT VS M/S HINDUSTAN MINT AGRO PRODUCTS PVT. LTD., ITA NO.1537 TO 1539/DEL/2007 HOLDING THA T WHILE COMPUTING THE TWIN DEDUCTION U/S 80-IB AND 80HHC, THE INCOME SHAL L BE FIRST REDUCED BY 2 DEDUCTION U/S 80-IB AND THEREAFTER, THE DEDUCTION U /S 80HHC SHALL BE CALCULATED ON SUCH REDUCED FIGURE. 3. THE LEARNED DR RELIES ON THIS SPECIAL BENCH JUD GMENT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL PLACED ON RECORD. THE CIT(A) IN THE INSTANT CASE HAS HELD THAT DEDUCTION U/S 80-IB AND 80HHC ARE INDEPENDENT AND TO ALLOW BOTH OF THEM ON SAME GROSS BUSINESS PROFITS. RESPECTFULLY FOLLOWING THE SPECI AL BENCH JUDGMENT (SUPRA), THE ORDER OF CIT(A) IS REVERSED ON THIS IS SUE AND THAT OF AO IS RESTORED. 5. THE REMAINING GROUND PERTAINS TO ASSESSMENT YEAR 2003-04 ARE AS UNDER: 2. THAT THE LD. CIT(A), BAREILLY HAS ERRED BY REDUCING THE ADDITIONS ON ACCOUNT OF DISALLOWANCES IN RESPECT OF TELEPHONE EXPENSES AND CART EXPENSES AND DEPRECIATION, FOREIGN TOUR EXPENSES FROM 10% TO 5%. 3. THAT THE LD. CIT(A), BAREILLY HAS ERRED IN ALLOWING RELIEF OF RS.4,28,286/- OUT OF STAFF WELFA RE EXPENSES. 6. THE LEARNED DR SUPPORTED THE AO. 7. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDS TH AT ASSESSEE IS 100% EXPORTER. AO MADE OUT 10% AD HOC DISALLOWANCE ON P RESUMPTIONS. CIT(A) 3 HAS REDUCED 5% AGAIN ON AN AD HOC ESTIMATE. TO AVO ID LITIGATION, ASSESSEE HAS ACCEPTED THE ORDER. IN VIEW THEREOF, CIT(A)S ORDER MAY BE UPHELD. 8. WE HAVE HEARD THE RIVAL CONTENTIONS. APROPOS GRO UND NOS.2 & 3 ABOVE, THE AO MADE 10% DISALLOWANCE ON AD HOC BASIS WHICH WAS HELD TO BE EXCESSIVE AND REDUCED TO 5% BY THE CIT(A). LEARNED DR COULD NOT BRING OUT ANY NEW EFFECT TO TAKE A CONTRARY VIEW AT VARIA NCE WITH CIT(A). IN VIEW THEREOF, WE SEE NO INFIRMITY IN RESPECT OF REDUCING THE DISALLOWANCE OF 5% IN RESPECT OF TELEPHONE, CART EXPENSES, DEPRECIATION, FOREIGN TOUR AND STAFF WELFARE. IN VIEW THEREOF, GROUND NOS.2 & 3 OF REVE NUES APPEAL FOR ASSTT. YEAR 2003-04 IS DISMISSED. 9. BOTH THE APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JULY, 2009. (K.D. RANJAN) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7 TH JULY, 2009 VIJAY COPY TO:- 1. APPELLANT. 2. RESPONDENT 3. CIT 4. CIT(A), BAREILLY. 5. THE DR ASSISTANT REGISTRAR.