The DCIT.(OSD)-I, Circle-4, Ahmedabad V. Mcfills Enterprises Pvt.Ltd., Ahmedabad

ITA 2229/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94624 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-11-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 05-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: N B SHAH
• Keywords: Audit objection; Tax effect
• Section: 143(3); 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE S/SHRI KUL BHARAT, JM, & MANISH BORAD, AM . ITA NO.2229/AHD/2012 ASST. YEAR: 2004-05 DY. CIT(OSD), CIRCLE-4, AHMEDABAD. VS MCFILLS ENTERPRISES PVT. LTD., 501, SHIKHAR, NAVRANGPURA, AHMEDABAD. (APPELLANT) (RESPONDENT) PA NO.AADCM 5954B APPELLANT BY SHRI NARENDRA SINGH, SR. DR RESPONDENT BY SHRI N. B. SHAH, AR DATE OF HEARING: 4/11/2015 DATE OF PRONOUNCEMENT: 5/11/2015 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE LD.CIT(A)-VIII, AHMEDABAD, DATED 18.07 .2012 PASSED FOR ASSTT.YEAR 2004-05. 2. SOLITARY GRIEVANCE OF THE REVENUE IS THAT THE LD .CIT(A) HAS ERRED IN LAW AND ON FACTS DIRECTING TO ALLOW DEDUCTION U/ S 80HHC OF THE ACT, WITHOUT APPRECIATING THE FACT THAT THE TOTAL EXPORT TURNOVER OF THE ASSESSEE IS MORE THAN RS.10 CRORES. 3. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE ASSESSEE IS A PRIVATE LTD. COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE AND EXPORTS OF DYES. FOR THE YEAR UNDER CONSIDERATION, IT ITA NO. ASST. YEAR 2 FILED ITS RETURN OF INCOME ON 31/10/2004 DECLARING INCOME OF RS.79,82,240/-. THE ASSESSMENT ORDER U/S 143(3) WAS FINALIZED ON 29/12/2006 DETERMINING TOTAL INCOME AT RS.94,95,970 /-. THE SAID ORDER TRAVELLED UPTO THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 11/09/2009 IN ITA NO.131 & 507/AHD/2008 DISMISSED D EPARTMENTAL APPEAL. 3. THE LD. AR SUBMITTED THAT WHILE WITH RESPECT TO ASSESSEES APPEAL ON THE ISSUE OF CLAIM FOR DEDUCTION U/S 80HH C IN RESPECT OF INCOME BY WAY OF PROFIT ON SALE OF DEPB LICENCES, T HE TRIBUNAL SET ASIDE THE MATTER TO THE FILE OF ASSESSING OFFICER F OR RE-VERIFICATION AS TO EXPORT TURNOVER OF THE ASSESSEE IS BELOW RS.10.00 C RORES AND THEREBY IT IS ENTTLED TO RELIEF AS PER AMENDED PROVISION. 4. THE LD. AR ALSO SUBMITTED THAT THE ASSESSING OFF ICER DISALLOWED THE CLAIM OF RELIEF AND DETERMINED THE INCOME AT RS .87,76,981/- BY VIRTUE OF HIS ORDER DATED 1/12/2010 U/S 254 R.W.S. 143(3) OF THE ACT. THE CIT(A) VIDE HIS ORDER DATED 18/7/2012 ALLOWED T HE ASSESSEES APPEAL OF TURNOVER BEING LESS THAN RS.10.00 CRORES WHEREBY THE ASSESSEE IS ENTITLED TO BENEFIT U/S 80HHC. PURSUANT TO THE SAID ORDER, THE ASSESSING OFFICER ISSUED APPEAL EFFECT ORDER ON 24/1/2013 WHEREBY INCOME WAS DETERMINED AT RS.83,75,625/- GRANTING RE LIEF OF RS.4,01,360/-. THE COPY OF THE SAID APPEAL EFFECT O RDER IS SUBMITTED HEREWITH. AGGRIEVED, THE REVENUE IS IN APPEAL BEFOR E US. 5. THE LD. AR FURTHER SUBMITTED THAT THE APPEAL IS FOR A CLAIM OF DEDUCTION OF RS.4,01,360/- U/S 80HHC. THE TAX EFFEC T THEREON AS APPLICABLE FOR AY 2004-05 AT 35% OF TAX AND 2.5% OF SURCHARGE COMES TO RS.1,43,988/-, WHICH IS LESS THAN RS.3,00,000/-. AS PER CBDT ITA NO. ASST. YEAR 3 CIRCULAR NO.3 DATED 9.2.2011 NO APPEAL SHALL BE FIL ED BY THE DEPARTMENT IF THE TAX EFFECT IS LESS THAN RS.3,00,0 00/-. 6. ON THE OTHER HAND, THE LD. DR COULD NOT CONTROVE RT THE SUBMISSIONS OF THE LD. AR. 7. ON DUE CONSIDERATION OF THE FACTS, WE ARE OF THE VIEW THAT THE CBDT HAD ISSUED INSTRUCTION BEARING NO. 3/2011 [F. NO. 279/MISC. 142/2007-ITJ], DATED 9-2-2011 VIDE WHICH IT HAS BEE N PROVIDED THAT IF THE TAX EFFECT BY VIRTUE OF CIT(A)S ORDER IS BELOW RS.3 LAKHS, THEN THAT ORDER WOULD NOT BE CHALLENGED BEFORE THE TRIBUNAL I N FURTHER APPEAL. THE BOARD HAS PROVIDED EXEMPTIONS AT CLAUSE (8) OF THE INSTRUCTIONS WHEREIN IT HAS BEEN PROVIDED THAT THESE INSTRUCTION S WILL NOT BE APPLICABLE, IF VIRES OF ANY PROVISIONS HAS BEEN QUASHED BY IMPUGNED ORDER OR ADDITION WAS MADE ON SOME AUDIT OBJECTIONS ETC. WE FIND THAT THE PRESENT CASE DOES NOT FALL WITHIN THE EXEMPTION CLAUSE, THE TAX IS LESS THAN RS.3 LAKHS, AND THEREFORE, THE PRESENT AP PEAL IS NOT MAINTAINABLE. 8. IN THE RESULT OF THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH NOV. 2015 SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 5/11/2015 MAHATA/- ITA NO. ASST. YEAR 4 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 ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 4/11/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 4/11/2015 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 5/11/2015 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: