The DYCIT., Circle-8, Ahmedabad V. Shilp Gravures Ltd., Ahmedabad

ITA 2221/AHD/2006

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8759 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-03-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 18-10-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Assessee Lawyers: R T SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D. C. AGRAWAL , AM) ITA NOS. 2220 AND 2221/AHD/2006 A. Y.: 2001-02 AND 2003-04 THE D. C. I. T., CIRCLE-8, 4 TH FLOOR, A WING, AJANTA COMMERCIAL CENTRE, ASHRAM ROAD, AHMEDABAD VS SHILP GRAVEURS LTD., 101, KASHI PAREKH COMPLEX, B/H BHAGWATI COMPLEX, C. G. ROAD, AHMEDABAD PA NO. AASCS 0868G (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M. C. PANDIT, DR RESPONDENT BY SHRI R. T. SHAH, AR O R D E R PER BHAVNESH SAINI: BOTH THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST COMMON ORDER OF THE CIT(A)- XIV, A HMEDABAD DATED JULY, 2006 FOR THE ABOVE ASSESSMENT YEARS. 2. IN BOTH THE APPEALS GROUNDS OF APPEAL ARE SAME. 3. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. 4. ON GROUND NO.1 IN BOTH THE APPEALS, THE REVENUE CHALLENGED THE ORDER OF THE LEARNED CIT(A) IN DIRECTING THE AO TO EXCLUDE EXCISE DUTY FROM THE TOTAL TURNOVER WHILE COMPUTING DEDUCTION U /S 80 HHC OF THE IT ACT. THE LEARNED DR CONCEDED THAT THIS ISSUE IS COV ERED AGAINST THE REVENUE BY THE JUDGMENT OF THE HONBLE SUPREME COUR T IN THE CASE OF LAKSHMI MACHINE WORKS 290 ITR 667 (SC) IN WHICH IT WAS HELD THAT EXCISE DUTY AND SALE TAX WOULD NOT FORM PART OF TH E TOTAL TURNOVER WHILE CONSIDERING THE DEDUCTION U/S 80 HHC OF THE IT ACT . BY FOLLOWING THE SAME DECISION, WE DISMISS THESE GROUNDS OF APPEAL O F THE REVENUE IN BOTH THE APPEALS. ITA NO.2220 AND 2221/AHD/2006 SHILP GRAVEURS LTD. 2 5. ON GROUND NO.2 IN BOTH THE APPEALS, REVENUE CHAL LENGED THE ORDER OF THE LEARNED CIT(A) IN DIRECTING THE AO TO ALLOW DEDUCTION U/S 80 IB AND U/S 80 HHC OF THE IT ACT. THE AO HAS CALCULATED THE DEDUCTION U/S 80 IB OF THE IT ACT AND DEDUCTED THIS AMOUNT FROM T HE PROFIT OF BUSINESS FOR CALCULATING DEDUCTION U/S 80 HHC OF THE IT ACT BY INVOKING THE PROVISIONS OF SECTION 80 IB READ WITH SECTION 80 IA (9) OF T4HE IT ACT. IT WAS CONTENDED BEFORE THE LEARNED CIT(A) THAT BOTH T HE DEDUCTIONS U/S 80 IB AND 80 HHC OF THE IT ACT ARE INDEPENDENT AND THE SAME SHOULD BE CALCULATED INDEPENDENTLY ON THE PROFIT OF THE BUSIN ESS. THE LEARNED CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWI NG THE ORDER OF THE ITAT JAIPUR BENCH IN THE CASE OF TOSHIKA CREATION. 6. THE LEARNED DR SUBMITTED THAT THE ISSUE IS COVER ED IN FAVOUR OF THE REVENUE BY THE JUDGMENT OF THE SPECIAL BENCH OF ITA T DELHI BENCHES IN THE CASE OF ACIT VS HINDUSTAN MINT AND AGRO PRODUCT S LTD. 119 ITD (SB) 107 IN WHICH THE ISSUE WAS DECIDED IN FAVOUR OF THE REVENUE BY FOLLOWING THE PROVISIONS OF SECTION 80 IA (9) OF THE IT ACT. THE LEARNED COUNSEL FOR THE ASSESSEE CONCEDED THE CLAIM OF THE LEARNED DR. 7. ON CONSIDERATION OF THE ABOVE FACTS, WE ARE OF T HE VIEW THAT THE ISSUE IS COVERED IN FAVOUR OF THE REVENUE BY THE JU DGMENT OF ITAT DELHI SPECIAL BENCH IN THE CASE OF ACIT VS HINDUSTAN MINT AND AGRO PRODUCTS LTD. (SUPRA) IN WHICH IDENTICAL ISSUE WAS CONSIDERE D IN THE LIGHT OF THE PROVISIONS OF SECTION 80 IA (9) OF THE IT ACT WHICH IS APPLICABLE TO THE ASSESSMENT YEARS UNDER APPEAL ALSO IN WHICH IT WAS HELD DEDUCTIONS TO BE ALLOWED UNDER CHAPTER VI - A WITH HEAD C IS TO BE REDUCED BY THE AMOUNT OF DEDUCTION ALLOWED U/S 80 IB/80IA OF THE A CT. AS THE ISSUE IS COVERED IN FAVOUR OF THE REVENUE AND BOTH THE DEDUC TIONS ARE NOT INDEPENDENT, WE ACCORDINGLY REVERSE THE ORDER OF TH E LEARNED CIT(A) AND DIRECT THE AO TO CALCULATE THE DEDUCTION UNDER THE ABOVE PROVISIONS AS ITA NO.2220 AND 2221/AHD/2006 SHILP GRAVEURS LTD. 3 PER ABOVE DECISION OF THE SPECIAL BENCH. AS A RESUL T THESE GROUNDS OF APPEAL IN BOTH THE APPEALS ARE PARTLY ALLOWED. 8. AS A RESULT, THE DEPARTMENTAL APPEALS ARE ALLOWE D. ORDER PRONOUNCED ON 22-03-2010. SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 22-03-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD