CREATIVE MOBUS FABRICS LTD 9 NOW KNOWN AS CREATIOVE PARTICO (INIDA) P . LTD, MUMBAI V. ITO WD 6(2)-1, MUMBAI

ITA 2002/MUM/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1385 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-07-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 12-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Set aside
• Section: 234B; 115JB; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'SMC' BENCH, MUMBAI BEFORE SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 2002/MUM/2010 (ASSESSMENT YEAR: 2006-07) M/S. CREATIVE MOBUS FABRICS LTD. INCOME TAX OFFICER - 6(2)(1) (NOW KNOWN A CREATIVE PORTICO MUMBAI (INDIA) PVT. LTD.),SUN MILL COMPOUND VS. LOWER PAREL, MUMBAI 400013 PAN - AAACC 5458 P APPELLANT RESPONDENT APPELLANT BY: SHRI VIJAY MEHTA RESPONDENT BY: SHRI S.K. SINGH O R D E R PER A.L. GEHLOT, A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)- XII, MUMBAI DATED 23.11.2009. 2. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON FACTS AND IN LAW, THE LEARNED CIT(A) HAD ERR ED IN HOLDING THAT EXPORT ENTITLEMENTS OF RS.1,05,02,778/- ARE NOT ELI GIBLE FOR DEDUCTION U/S. 80-IB OF THE I.T. ACT, 1961. UNDER T HE FACTS AND CIRCUMSTANCES OF THE MATTER, HE OUGHT TO HAVE HELD THE SAME. 2. ON FACTS AND IN LAW, THE LEARNED CIT(A) HAD ERRE D IN UPHOLDING THE LEVY OF INTEREST U/S 234B AT A SUM OF RS.6,38,136/- WITHOUT APPRECIATING THE FACT THAT IN THE ASSESSMENT ORDER, THE INTEREST U/S. 234B HAD BEEN LEVIED ON BANK PROFIT U/S. 115JB. UND ER THE FACTS AND CIRCUMSTANCES OF THE MATTER HE OUGHT TO HAVE DE LETED THE LEVY OF INTEREST U/S. 234B. THE ASSESSEE ALSO HAS RAISED ADDITIONAL GROUND, WHI CH READS AS UNDER: - 1. ON FACTS AND IN LAW, THE LEARNED CIT(A) HAD ER RED IN NOT HOLDING THAT NO INTEREST U/S. 234C IS LEVIABLE, AS THE INCO ME IS DETERMINED U/S. 115JB OF THE INCOME-TAX ACT. UNDER THE FACTS A ND CIRCUMSTANCES OF THE MATTER, HE OUGHT TO HAVE DELET ED THE INTEREST CHARGED U/S. 234C OF RS.1,08,984/-. 3. AFTER HEARING THE LEARNED REPRESENTATIVES OF BOTH T HE PARTIES THE ADDITIONAL GROUND RAISED IS ADMITTED. ITA NO. 2002/MUM/2010 M/S. CREATIVE MOBUS FABRICS LTD. 2 4. AT THE OUTSET THE LEARNED A.R. OF THE ASSESSEE SUBM ITTED THAT THE FIRST GROUND IS COVERED AGAINST THE ASSESSEE BY THE JUDGE MENT OF THE APEX COURT IN THE CASE OF LIBERTY INDIA VS. CIT 217 ITR 281 WH EREIN IT WAS HELD THAT DEPB/DUTY DRAWBACK ARE INCENTIVES WHICH FLOW FROM T HE SCHEMES FRAMED BY CENTRAL GOVERNMENT OR FROM S. 75 OF THE CUSTOMS ACT, 1962, HENCE, INCENTIVES PROFITS ARE NOT PROFITS DERIVED FROM THE ELIGIBLE BUSINESS AND THEREFORE, DUTY DRAWBACK RECEIPT/DEPB BENEFITS DO N OT FORM PART OF NET PROFITS OF THE INDUSTRIAL UNDERTAKING FOR THE PURPO SES OF S. 80-IA OR 80-IB. HE FURTHER SUBMITTED THAT GROUND NO. 2 AND THE ADDITIO NAL GROUND ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF THE J URISDICTIONAL HIGH COURT IN THE CASE OF SNOWCEM INDIA LTD. VS. DCIT 313 ITR 170 WHEREIN IT WAS HELD THAT INTEREST UNDER SECTIONS 234B AND 234C IS NOT L EVIABLE IN CASE OF COMPUTATION OF INCOME UNDER S. 115JA. 5. AFTER HEARING THE LEARNED D.R. WE NOTICED THAT THE ISSUES RAISED IN THE GROUNDS OF APPEAL, INCLUDING THE ADDITIONAL GROUND, ARE COVERED BY THE JUDGEMENTS OF THE APEX COURT AND THE JURISDICTIONAL HIGH COURT. WE RESPECTFULLY FOLLOW THESE JUDGEMENTS AND IN THE LIG HT OF THAT THE ISSUE RELATED TO EXPORT ENTITLEMENT IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB OF THE ACT. ON THIS ISSUE THE ORDER OF THE CIT(A) IS CONFI RMED. HOWEVER, REGARDING CHARGING OF INTEREST UNDER SECTION 234B AND 234C WH ILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JB, WE FOLLOW THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT AND IN THE LIGHT OF THAT ORDERS OF THE REVENU E AUTHORITIES ARE SET ASIDE AND THE GROUNDS OF THE ASSESSEE ARE DECIDED IN FAVO UR OF THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JULY 2010. SD/- (A.L. GEHLOT) ACCOUNTANT MEMBER MUMBAI, DATED: 6 TH JULY 2010 ITA NO. 2002/MUM/2010 M/S. CREATIVE MOBUS FABRICS LTD. 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XII, MUMBAI 4. THE CIT VI, MUMBAI CITY 5. THE DR, SMC BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.