M/s Abad Fisheries, Cochin V. ITO, Ernakulam

ITA 219/COCH/2005

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64826 (ITAT-COCHIN)
• Duration Of Justice: 7 year(s) 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 06-08-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 10-02-2005
• Court: TRIBUNAL
• Department Lawyers: VANI RAJ
• Assessee Lawyers: P K SASIDHARAN
• Keywords: Reason to believe
• Section: 143(3); 80HHC; 234B; 14A; 10B; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A NOS. 219 & 220/COCH/2005 ASSESSMENT YEARS : 1999-2000 & 2000-01 M/S. ABAD FISHERIES, ABAD BUILDING, KOCHANGADI, KOCHI-2. [PAN: AADFA 9900C] VS. THE INCOME TAX OFFICER, WARD- 1(1), RANGE-1, ERNAKULAM. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) I.T.A NO. 104/COCH/2007 ASSESSMENT YEARS : 2002-03 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), ERNAKULAM. VS. M/S. ABAD FISHERIES, ABAD BUILDING, KOCHANGADI, KOCHI-2. [PAN: ADFA 9900C] (REVENUE-APPELLANT) (ASSESSEE - RESPONDENT) ASSESSEE BY SHRI P.K.SASIDHARAN, CA REVENUE BY SMT. VANI RAJ, JR. DR DATE OF HEARING 06/08/2012 DATE OF PRONOUNCEMENT 28/09/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: ALL THESE THREE APPEALS ARE DIRECTED AGAINST THE O RDERS PASSED BY LD CIT(A)-II, KOCHI AND THEY RELATE TO THE ASSESSMENT YEARS 1999- 2000, 2000-01 AND 2002-03. THE ASSESSEE HAS FILED APPEALS RELATING TO THE ASSESSME NT YEARS 1999-2000 AND 2000-01 AND THE REVENUE HAS FILED APPEAL FOR THE ASSESSMENT YEAR 2002-03. I.T.A. NOS. 219 & 220/COCH/2005 & 104/COCH/2007 2 2. ALL THESE ASSESSMENTS WERE COMPLETED U/S 147 R.W.S. 143(3) OF THE ACT BY THE ASSESSING OFFICER. EARLIER TO THAT THE RESPECTIVE RE TURNS HAD BEEN PROCESSED U/S 143(1) OF THE ACT. BEFORE LD CIT(A), THE ASSESSEE HAD CHA LLENGED THE RE-OPENING OF ASSESSMENTS ON THE GROUND THAT THE RE-OPENING CANNO T BE MADE IN THE ABSENCE OF A REGULAR ASSESSMENT U/S 143(3) OF THE ACT. THE LD C IT(A) DID NOT ACCEPT THE SAID PLEA IN THE FIRST TWO YEARS BY PLACING RELIANCE ON THE DECI SION OF HONBLE SUPREME COURT IN THE CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD (291 ITR 500). HOWEVER, ANOTHER LD CIT(A), WHO HEARD THE APPEAL FOR ASSESSMENT YEAR 20 02-03 DECLARED THE REASSESSMENT AS INVALID AND THUS ALLOWED THE APPEAL OF THE ASSES SEE FOR THAT YEAR. BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT FILED APPEALS BEFORE THE TRIBUNAL AGAINST THE ORDERS PASSED BY THE RESPECTIVE LD CIT(A)S. 3. BEFORE THE TRIBUNAL, THE ASSESSEE SUBMITTED THAT THE AO HAS ISSUED THE REASSESSMENT NOTICES FOR THESE THREE YEARS UNDER CO NSIDERATION, WHEN THE TIME LIMIT FOR ISSUING NOTICE U/S 143(2) WAS STILL AVAILABLE. ACC ORDINGLY, IT WAS CONTENDED THAT REASSESSMENT NOTICES WERE BAD IN LAW. THE CO-ORDIN ATE BENCH OF TRIBUNAL ACCEPTED THE SAID PLEA BY PLACING RELIANCE ON THE FOLLOWING DECI SIONS AND ACCORDINGLY SET ASIDE THE ASSESSMENT ORDERS:- (A) CIT VS. TCP LTD (323 ITR 34 (MAD) (B) CIT VS. QATALYS SOFTWARE TECHNOLOGIES LTD (308 ITR 249) (C) KLM ROYAL DUTCH AIRLINES VS. ASST. DIRECTOR O F INCOME TAX (292 ITR 49) HOWEVER, WHEN THE MATTER WAS TAKEN BEFORE THE HONB LE HIGH COURT OF KERALA, BOTH THE PARTIES HAVE SUBMITTED THAT THE REASSESSMENT NOTICE S FOR THE YEARS UNDER CONSIDERATION WERE ISSUED ONLY AFTER THE EXPIRY OF TIME LIMIT PRE SCRIBED U/S 143(2) OF THE ACT. SINCE THERE WAS FACTUAL ERROR IN THE ORDERS OF THE TRIBUN AL, THE HONBLE HIGH COURT OF KERALA SET ASIDE THE ORDERS OF THE TRIBUNAL FOR THESE YEAR S AND ALSO THE ORDER OF THE LD CIT(A) PASSED FOR THE ASSESSMENT YEAR 2002-03 AND RESTORED THE APPEALS BACK TO THE TRIBUNAL FOR CONSIDERING WHETHER THE REASONS RECORDED FOR RE OPENING OF THE ASSESSMENTS UNDER SECTION 147 OF THESE YEARS JUSTIFY THE SAME. THE H IGH COURT ALSO HELD THAT THE ASSESSEE IS FREE TO ARGUE APPEALS ON MERIT BEFORE THE TRIBUN AL. I.T.A. NOS. 219 & 220/COCH/2005 & 104/COCH/2007 3 4. ACCORDINGLY, THESE APPEALS WERE POSTED FOR H EARING AND PARTIES WERE HEARD. WE SHALL FIRST TAKE UP THE APPEAL FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2002-03. WE HAVE ALREADY NOTICED THAT THE HONBLE JURISDICTIONA L HIGH COURT OF KERALA HAS SET ASIDE THE ORDER PASSED BY LD CIT(A) ALSO FOR THE ASSESSME NT YEAR 2002-03. TO RECAPITULATE, THE LD CIT(A) HAD SET ASIDE THE ASSESSMENT ORDER ON THE LEGAL GROUND THAT THE REASSESSMENT NOTICE WAS BAD IN LAW. HOWEVER, BEFOR E THE HONBLE HIGH COURT, THE ASSESSEE HAS CONCEDED THAT THE REASSESSMENT NOTICE WAS ISSUED BY THE AO, ONLY AFTER THE EXPIRY OF THE TIME LIMIT PRESCRIBED FOR ISSUING NOTICE U/S 143(2) OF THE ACT. HENCE THE HONBLE HIGH COURT, WHILE RESTORING THE APPEALS TO THE TRIBUNAL, ALSO SET ASIDE THE ORDER OF LD CIT(A) FOR THIS ASSESSMENT YEAR. HENCE , IN EFFECT, THE ORDER OF LD CIT(A) DOES NOT EXIST IN THE EYES OF LAW. IN THE ABSENCE OF THE ORDER OF LD CIT(A), IT WOULD NOT BE PROPER FOR THE TRIBUNAL TO PASS ANY ORDER ON THE APPEAL FILED BY THE REVENUE, AS IT BECOMES INFRUCTUOUS DUE TO THE ORDER OF THE HONBLE HIGH COURT. ACCORDINGLY, WE ARE OF THE VIEW THAT THE APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2002-03 BEFORE LD CIT(A) NEEDS TO BE ADJUDICATED FIRST BY THE FIR ST APPELLATE AUTHORITY. ACCORDINGLY, WE RESTORE ALL THE MATTERS RELATING TO THE ASSESSME NT YEAR 2002-03 TO THE FILE OF LD CIT(A) WITH THE DIRECTION TO DISPOSE THE APPEAL FIL ED BY THE ASSESSEE AFRESH. AS OBSERVED BY THE HONBLE HIGH COURT, THE LD CIT(A) S HALL ALSO CONSIDER WHETHER THE REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT J USTIFY THE SAID RE-OPENING. THE ASSESSEE IS FREE TO ARGUE THE APPEAL ON MERITS ALSO . THE APPEAL OF THE REVENUE STANDS DISPOSED OF ACCORDINGLY. 5. WE SHALL TAKE UP THE APPEALS FILED BY THE ASS ESSEE FOR THE ASSESSMENT YEARS 1999- 2000 AND 2000-01. THE HONBLE HIGH COURT OF KERALA HAS DIRECTED THE TRIBUNAL TO CONSIDER WHETHER THE REASONS RECORDED BY THE AO JUS TIFY THE REOPENING OF THE ASSESSMENTS OF THE TWO YEARS REFERRED ABOVE. THE R EVENUE HAS SUBMITTED COPIES OF REASONS RECORDED BY THE AO FOR THE TWO YEARS CITED ABOVE. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE SAID REASONS:- I.T.A. NOS. 219 & 220/COCH/2005 & 104/COCH/2007 4 (A) ASSESSMENT YEAR 1999-2000:- FOR THE A.YS 1998-99 AND EARLIER YEARS, THE FOLLOW ING POINTS WERE INVOLVED IN THIS CASE:- (1) ALLOWABIITY OF EXEMPTION U/S. 10B ON C/APS UN IT. (2) COMPUTATION OF DEDUCTION U/S . 80HHC. (3) TREATMENT OF INTEREST ON LERM S A/C. (4) EXPORT HOUSE MARGIN WHETHER T O BE CONSIDERED AS EXPORT PROFIT. (5) ASSESSMENT OF INTEREST ON RE FUND OF INCOME TAX. (6) TREATMENT OF UNREALISED SALE PROCEEDS ON EXPORT. (7) COMPUTATION OF DEDUCTION U/S . 80HHC ON EACH UNIT SEPARATELY. (8) LIABILITY TO INTEREST U/S. 2 34B (9) DISALLOWANCE U/S. 43B. AS THE RETURN WAS ACCEPTED U/S. 143(1) AND THEREFOR E THE ABOVE POINTS HAVE NOT BEEN CONSIDERED, WHICH RESULTED IN ESCAPE MENT OF INCOME. I HAVE, THEREFORE, REASON TO BELIEVE THAT INCOME H AS ESCAPED ASSESSMENT WITHIN THE MEANING OF SEC. 147. ISSUE NOTICE U/S. 148. (B) ASSESSMENT YEAR 2000-2001:- (1) INTEREST ON FD IS TO BE ASSESSED AS INCOME FR OM OTHER SOURCES. (2) INTEREST ON LERMS DEPOSITS IS TO BE EXCLUDED FR OM EXPORT TURNOVER. (3) GAIN ON A/C OF EXCHANGE FLUCTUATION RATE IS TO BE EXCLUDED FROM EXPORT TURNOVER. (4) TURNOVER OF E.O.U. IS TO BE INCLUDED IN THE TO TAL TURNOVER FOR COMPUTATION OF 80HHC. (5) CAPS SEA FOODS DIVISION (FOR WHICH DEDUCTION U /S. 10B IS CLAIMED IS FULLY BY THE FUNDS TRANSFERRED FROM THE A/C OF THE PAREN T UNIT INCLUDING LOANS TAKEN. SO THE FULL INTEREST EXPENSE CLAIMED BY THE ASSESS EE IN THE COMPUTATION OF CHARGEABLE INCOME IS TO BE DISALLOWED AS PER SEC. 14A. (6) INTEREST ON IT REFUND IS TO BE ASSESSED. FOR THE ABOVE REASONS, I HAVE REASON TO BELIEVE THA T INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. ISSUE NOTICE U/S. 148 . I.T.A. NOS. 219 & 220/COCH/2005 & 104/COCH/2007 5 6. ACCORDING TO LD A.R, THE REASONS RECORDED BY THE AO FOR BOTH THE YEARS ARE VAGUE AND THE AO HAS NOT GIVEN ANY SPECIFIC FINDING. THUS , ACCORDING TO LD A.R, THE ASSESSMENTS FOR BOTH THE YEARS HAVE BEEN REOPENED O NLY FOR CONDUCTING FURTHER ENQUIRIES, WHICH SHALL NOT JUSTIFY REOPENING. IN T HIS REGARD, THE LD A.R PLACED RELIANCE ON THE FOLLOWING CASE LAW:- 1. ALLANA COLD STORAGE LTD VS. ITO (287 ITR 1)(BOM ) 2. G.K.N. DRIVE SHAFTS (INDIA) LTD VS. ITO (259 IT R 19)(SC) 3. APOLLO HOSPITALS ENTERPRISES LTD VS. ACIT (287 I TR 2) (MAD) 4. RRB CONSULTANTS & ENGINEERS (P) LTD VS. DCIT (34 2 ITR 127)(DELHI) 5. DEVIDAYAL ROLLING MILLS VS. ACIT (285 ITR 514)( BOM) 6. K.M.BENSAL VS. CIT (195 ITR 247)(ALL) 7. CIT VS. SAMBHAR SALT LTD (262 ITR 675)(RAJ) 7. ON THE OTHER HAND, THE LD D.R CONTENDED THAT THE REASONS RECORDED BY THE AO ARE SUFFICIENT TO COME TO THE CONCLUSION THAT HE HAD EN OUGH REASONS TO BELIEVE THAT THERE WAS ESCAPEMENT OF INCOME IN THE BOTH THE YEARS UNDE R CONSIDERATION. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREF ULLY PERUSED THE REASONS RECORDED BY THE AO. FOR BOTH THE ASSESSMENT YEARS, THE AO HAS FELT THAT THERE WAS ESCAPEMENT OF INCOME, INTER ALIA, IN THE COMPUTATION OF EXEMPTION U/S 10B AND THE DEDUCTION U/S 80HHC. FOR BOTH THE YEARS, THE AO HAS TAKEN THE VI EW THAT THE PROVISIONS OF SECTION 14A SHALL HAVE EFFECT ON THE INTEREST EXPENDITURE C LAIMED BY THE ASSESSEE VIS-A-VIS THE EXEMPTED INCOME. IT IS AN ADMITTED FACT THAT THE R ETURNS OF INCOME FILED BY THE ASSESSEE FOR BOTH THE YEARS WERE ONLY PROCESSED U/ S 143(1) OF THE ACT EARLIER, I.E., NO REGULAR ASSESSMENTS WERE CARRIED OUT EARLIER. IT I S ALSO A FACT THAT THE AO DID NOT ACCEPT THE WORKINGS MADE BY THE ASSESSEE IN RESPECT OF THE CLAIM OF EXEMPTION MADE U/S 10B AND THE DEDUCTION CLAIMED U/S 80HHC IN THE EARLIER YEARS. UNDER THESE FACTUAL CIRCUMSTANCES, IT IS REASONABLE FOR THE AO TO PRESU ME THAT THE WORKINGS MADE TO CLAIM EXEMPTION U/S 10B AND DEDUCTION U/S 80HHC IN THE TW O YEARS UNDER CONSIDERATION WOULD RESULT IN ESCAPEMENT OF INCOME. ACCORDINGLY, WE ARE OF THE VIEW THAT THE REASONS RECORDED BY THE AO JUSTIFY THE RE-OPENING O F ASSESSMENT OF BOTH THE YEARS UNDER CONSIDERATION. HENCE, WE ARE UNABLE TO AGREE WITH THE CONTENTION OF LD A.R THAT I.T.A. NOS. 219 & 220/COCH/2005 & 104/COCH/2007 6 THE IMPUGNED ASSESSMENTS HAVE BEEN REOPENED ONLY TO CARRY OUT FURTHER ENQUIRIES. ACCORDINGLY THE GROUND NO.2 RAISED IN BOTH THE YEAR S STAND DISPOSED OF. 9. NOW WE SHALL TAKE UP THE GROUNDS RAISED ON M ERITS FOR BOTH THE ASSESSMENT YEARS. THE GROUND NO.3 IN BOTH THE YEARS RELATES TO THE CL AIM OF DEDUCTION U/S 10B OF THE ACT IN RESPECT OF THE PROFIT RELATING TO THE 100% EXPOR T ORIENTED UNIT. THE FACTS RELATING TO THE SAME ARE THAT THE ASSESSEE IS ENGAGED IN THE BU SINESS OF EXPORT OF MARINE PRODUCTS, EITHER DIRECTLY OR THROUGH EXPORT HOUSES. EXPORTS ARE DONE FROM THE HEAD OFFICE AT COCHIN AND ALSO FROM CAP SEA FOOD UNIT (C APS UNIT) LOCATED AT A PALCE CALLED VYPEEN. THE ASSESSEE CLAIMED EXEMPTION U/S 10B O F THE ACT IN RESPECT OF BOTH THE UNITS. THE AO TOOK THE VIEW THAT THE ASSESSEE CAN CLAIM EXEMPTION U/S 10B ONLY IF IT UNDERTAKES DIRECT EXPORTS AND THE SAID EXEMPTION CA NNOT BE ALLOWED IF EXPORTS ARE MADE THROUGH THE EXPORT HOUSES. ACCORDINGLY, HE DE NIED EXEMPTION CLAIMED BY THE ASSESSEE U/S 10B OF THE ACT. THE LD CIT(A) ALSO CO NFIRMED THE VIEW OF THE AO. 10. THE LD A.R PLACED RELIANCE ON THE DECISION D ATED 20-08-2010 OF HONBLE JURISDICTIONAL KERALA HIGH COURT PASSED IN THE ASSE SSEES OWN CASE IN ITA NO.218, 253, 257 & 262 OF 2010 AND SUBMITTED THAT THE IMPUGNED I SSUE IS COVERED BY THE SAID DECISION. IN THE SAID ORDER, THE HONBLE KERALA HI GH COURT NOTICED THAT THE ASSESSEE HAS RECEIVED ENTIRE SALE PROCEEDS IN FOREIGN EXCHANGE A ND DRAW BACK INCENTIVES WERE ALSO GRANTED TO THE ASSESSEE. UNDER THOSE CIRCUMSTANCES, THE HIGH COURT HELD THAT THE ASSESSEE SHOULD BE TREATED AS EXPORTER FOR ALL PURP OSES. 11. HOWEVER, THE RELEVANT DETAILS, VIZ., WHETHE R THE SALE PROCEEDS WERE RECEIVED BY WAY OF FOREIGN EXCHANGE OR NOT, WHETHER THE ASSESSE E HAS RECEIVED THE DRAWBACK BENEFITS ETC., ARE NOT AVAILABLE ON RECORD. IN THE ABSENCE OF SUCH DETAILS, WE ARE UNABLE TO EXAMINE WHETHER THE ABOVE SAID DECISION OF HONB LE KERALA HIGH COURT SHALL APPLY TO THE FACTS PREVAILING IN THE TWO YEARS UNDER CONSIDE RATION. ACCORDINGLY, WE ARE OF THE VIEW THAT THE FACTUAL DETAILS REQUIRE VERIFICATION AT THE END OF THE AO. ACCORDINGLY, WE DEEM IT FIT TO RESTORE THIS ISSUE TO THE FILE OF TH E AO WITH THE DIRECTION TO EXAMINE THE SAID ISSUE AFRESH IN BOTH THE YEARS IN ACCORDANCE W ITH THE DECISION OF HONBLE I.T.A. NOS. 219 & 220/COCH/2005 & 104/COCH/2007 7 JURISDICTIONAL KERALA HIGH COURT REFERRED SUPRA. T HE ORDERS OF LD CIT(A) ON THIS ISSUE ARE SET ASIDE IN BOTH THE YEARS. 12. THE GROUND NO.4 RAISED IN BOTH THE YEARS RELA TES TO THE DECISION OF LD CIT(A) IN HOLDING THAT THE SERVICE CHARGES RELATING TO EXPORT S, WHICH ARE NOT SUPPORTED BY DISCLAIMER CERTIFICATES, ARE TO BE ASSESSED AS OTHE R INCOME. THE LD A.R HAS POINTED OUT THAT THE TRIBUNAL HAD EARLIER DISPOSED OF THIS GROU ND BY ALLOWING THE CLAIM OF THE ASSESSEE, VIDE PARA 17 OF ITS ORDER DATED 13.11.200 9. 13. HOWEVER, WE NOTICE THAT THE TRIBUNAL HAS RE NDERED ITS DECISION IN PARAGRAPH 17 REFERRED SUPRA IN RESPECT OF APPEAL IN ITA NO.221/C OCH/2005 RELATING TO ASSESSMENT YEAR 2001-02, WHICH IS NOT BEING CONSIDERED NOW. F URTHER WE NOTICE THAT THE ASSESSEE HAD FILED COPIES OF DISCLAIMER CERTIFICATES BEFORE THE TRIBUNAL AND HENCE THE TRIBUNAL HAS ALLOWED THE CLAIM OF THE ASSESSEE. HOWEVER, IN THE YEARS UNDER CONSIDERATION, THE ASSESSEE DID NOT FURNISH THE DISCLAIMER CERTIFICATE S BEFORE THE TRIBUNAL. HENCE, WE ARE OF THE VIEW THAT THIS ISSUE NEEDS TO BE EXAMINED IN DEPENDENTLY. 14. THE FACTS RELATING TO THIS ISSUE, WHICH IS BORNE OUT OF THE RECORD, ARE THAT THE ASSESSEE CLAIMED DEDUCTION U/S 80HHC IF THE ACT IN RESPECT OF SERVICE CHARGES ALSO. THE AO TREATED THE SAME AS OTHER INCOME AND PROPO SED TO EXCLUDE 90% THEREOF WHILE COMPUTING PROFITS OF BUSINESS AS PER EXPLAN ATION (BAA) TO SECTION 80HHC OF THE ACT. THE AO TREATED A SUM OF RS.3,18,772/- OUT OF THE SERVICE CHARGES RELATING TO THE ASSESSMENT YEAR 1999-2000 AS INCOME FROM OTHER SOU RCES FOR WANT OF DISCLAIMER CERTIFICATES. THE TREATMENT MADE BY THE AO CAN BE SUMMARISED AS UNDER:- ASSESSMENT YEAR SERVICE CHARGES TREATED AS SERVICE CHARGES TREATED AS OTHER RECEIPTS INCOME FROM OTHER SOURCES 1999-2000 32,84,372 3,1 8,772 2000-2001 11,36,995 -- IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) NOTICED THAT THE AO DID NOT EXCLUDE 90% OF THE SERVICE CHARGES, AS OPINED BY HIM IN THE ASSESS MENT ORDER. ACCORDINGLY, HE ISSUED I.T.A. NOS. 219 & 220/COCH/2005 & 104/COCH/2007 8 ENHANCEMENT NOTICE TO THE ASSESSEE. BEFORE LD CIT( A), IT WAS SUBMITTED THAT THE SERVICE CHARGES ARE IN THE NATURE OF EXPORT HOUSE PREMIA. IT WAS FURTHER SUBMITTED THAT THE HONBLE KERALA HIGH COURT IN THE CASE OF C IT VS. G.GANGADHARAN NAIR (ITA NO.166 & 251 OF 2002) HAS DECIDED THE ISSUE OF EXP ORT HOUSE PREMIA IN FAVOUR OF THE ASSESSEE. CONSIDERING THE BINDING DECISION OF JURI SDICTIONAL HIGH COURT CITED ABOVE, THE LD CIT(A) WITHDREW THE ENHANCEMENT NOTICE ISSUED TO THE ASSESSEE. FURTHER, SINCE THE AO HAD ALREADY ALLOWED DEDUCTION U/S 80HHC OF THE A CT IN RESPECT OF SERVICE CHARGES, WHICH WERE TREATED AS OTHER RECEIPTS, THE LD CIT( A) REJECTED THE GROUND RELATING THERETO AS NON-MAINTAINABLE. BEFORE US, NO MATERI AL WAS PLACED BY THE ASSESSEE TO CONTRADICT THE ABOVE SAID FINDINGS GIVEN BY LD CIT( A). WITH REGARD TO THE CLAIM OF DEDUCTION ON THE AMOUNT OF RS.3,18,772/- TREATED AS INCOME FROM OTHER SOURCES, THE LD CIT(A) HAS OBSERVED AS UNDER:- THE APPELLANT CAN CLAIM DEDUCTION U/S 80HHC ONLY I N RESPECT OF THAT PART OF THE SALES TURNOVER FOR WHICH DISCLAIMER IS RECEIVED. O NCE A PARTICULAR TURNOVER IS NOT CONSIDERED FOR DEDUCTION U/S 80HHC IN THE ABSENCE O F DISCLAIMER CERTIFICATE, THE APPELLANT FORFEITS THE CLAIM FOR DEDUCTION U/S 80HH C IN RESPECT OF THE PROFITS ATTRIBUTABLE TO THAT TURNOVER AND HENCE THE CORRESP ONDING SERVICE CHARGES CAN ONLY BE TREATED AS CHARGES NOT ELIGIBLE FOR DEDUCTI ON U/S 80HHC. THEY NO LONGER HAVE THE CHARACTER OF THE AMOUNTS REFERRED TO IN TH E CASE OF G.GANGHADHARAN NAIR CITED ABOVE. HENCE THE ACTION OF THE AO IN EXC LUDING THE SAME FOR THE PURPOSE OF DEDUCTION U/S 80HHC IS THEREFORE UPHELD. 15. BEFORE US, THE ASSESSEE DID NOT PRODUCE ANY MATERIAL TO CONTRADICT THE FINDINGS GIVEN BY THE LD CIT(A). IT IS PERTINENT TO NOTE TH AT THE ASSESSEE HAD FILED COPIES OF THE DISCLAIMER CERTIFICATES RELATING TO THE ASSESSMENT YEAR 2001-02 BEFORE THE TRIBUNAL AND HENCE, THE CO-ORDINATE BENCH OF THE TRIBUNAL ALLOWE D THE IDENTICAL GROUND RAISED IN THAT YEAR. HOWEVER, THE ASSESSEE DID NOT FILE THE DISCL AIMER CERTIFICATES RELATING TO THE SERVICE CHARGES, WHICH WERE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES AND HENCE WE ARE INCLINED TO AGREE WITH THE VIEW TAKEN BY THE LD CIT(A). 16. THE GROUND NO.5 IN BOTH THE YEARS RELATE TO THE VALIDITY OF CHARGING INTEREST U/S 234D OF THE ACT. THIS ISSUE HAS SINCE BEEN SETTLED BY HONBLE KERALA HIGH COURT IN THE CASE OF KERALA CHEMICALS AND PROTEINS LTD (323 ITR 584). ACCORDINGLY, WE SET ASIDE THE ORDERS OF LD CIT(A) ON THIS ISSUE AND RESTORE THE S AME TO THE FILE OF THE AO WITH THE I.T.A. NOS. 219 & 220/COCH/2005 & 104/COCH/2007 9 DIRECTION TO EXAMINE THE ISSUE OF CHARGEABILITY OF INTEREST U/S 234D OF THE ACT IN ACCORDANCE WITH THE DECISION OF JURISDICTIONAL HIGH COURT REFERRED SUPRA. 17. THE GROUND NO.6 RAISED IN ASSESSMENT YEAR 199 9-2000 RELATES TO THE CHARGEABILITY OF INTEREST U/S 234B OF THE ACT. WE SET ASIDE THIS ISSUE ALSO TO THE FILE OF THE AO AS IT IS CONSEQUENTIAL IN NATURE. 18. THE GROUND NO.7 IN ASSESSMENT YEAR 1999-2000 AND THE GROUND NO.6 IN THE ASSESSMENT YEAR 2000-2001 ARE GENERAL IN NATURE. I N THE WRITTEN SUBMISSIONS, THE ASSESSEE HAS STATED THAT THE INTEREST RECEIVED ON F IXED DEPOSIT AMOUNTING TO RS.2,86,911/- REQUIRES CONSIDERATION. HOWEVER, THE LD A.R DID NOT SUBMIT ANY ARGUMENT ON THE SAID POINT. ACCORDINGLY WE DISMIS S THE SAID GROUNDS. 19. IN THE RESULT, THE APPEAL OF THE REVENUE FO R THE ASSESSMENT YEAR 2002-03 IS TREATED AS ALLOWED AND THE APPEALS FILED BY THE ASS ESSEE ARE TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 28-09-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 28TH SEPTEMBER, 2012 GJ COPY TO: 1. M/S. ABAD FISHERIES, ABAD BUILDING, KOCHANGADI, KOCHI-2. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1(1), ERNAKULAM. 3. THE INCOME TAX OFFICER, WARD-1(1), RANGE-1, ERNAK ULAM. 4. THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, KOC HI. 5. THE COMMISSIONER OF INCOME-TAX, KOCHI. 6. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 7. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) ITAT, COCHIN