The ACIT,Vapi Circle, Vapi V. CS Specialty Chemicals Pvt.Ltd., Vapi

ITA 2239/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1830 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 05-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Revised return
• Section: 80HHC; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, A HMEDABAD , (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M.) ( , !' # , ! $% ) ITA NO. 2239/AHD/2012 (ASSESSMENT YEAR: 2008-09) ASSTT. COMMISSIONER OF INCOME- TAX, VAPI CIRCLE, VAPI VS. CS SPECIALITY CHEMICALS PVT. LTD. (FORMERLY KNOWN AS JAMES ROBINSON INDIA PVT. LTD.), PLOT NO.6101/11, PHASE - IV, GIDC, VAPI PAN NO. AAACE5227E (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. SONIA KUMAR, SR. D.R. RESPONDENT BY : SMT. URVASHI SHODHAN, A.R. DATE OF HEARING : 21 -03- 2016 DATE OF PRONOUNCEMENT : 06 -04-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A), VALSAD, DATED 09.07.2012 FOR A.Y. 2008-09 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 3. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN TH E BUSINESS OF MANUFACTURING AND SALES OF HAIR DYE INTERMEDIARIES, COLOUR DEVELO PER AND FLUORESCENT. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2008-09 ON 26.0 9.2008 DECLARING TOTAL INCOME AT ITA NO.2239/AHD/12 (ACIT VS. CS SPECIALITY CHEMIC ALS P. LTD.) A.Y. 08-09 2 NIL AFTER CLAIMING SET OFF OF UNABSORBED DEPRECIATI ON UNDER THE REGULAR PROVISIONS AND A BOOK PROFIT OF RS.1,94,92,913/- U/S.115JB OF THE ACT. THEREAFTER, ASSESSEE FILED REVISED RETURN OF INCOME ON 26.02.2009 DECLAR ING THE SAME RETURNED INCOME AND BOOK PROFIT AS DISCLOSED IN THE ORIGINAL RETURN AND THE MAIN REASON FOR REVISING THE RETURN STATED TO BE MENTIONING OF WRONG TAN BY THE DEDUCTOR, ON WHICH ASSESSEE HAS CLAIMED TDS CREDIT. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER, ASSESSMENT WAS FRAMED U/S.143(3) OF THE ACT VIDE OR DER DATED 19.12.2011 AND THE TOTAL INCOME WAS DETERMINED AT RS. 23,64,920/- UNDE R THE REGULAR PROVISIONS AND BOOK PROFIT OF RS.1,94,92,913/- U/S.115JB OF THE AC T. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CI T(A) WHO VIDE ORDER DATED 09.07.2012 (IN APPEAL NO. CIT(A) /VLS/376/11-12) AL LOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), RE VENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S.10B OF THE ACT AMOUNTING TO RS.1,63,14,269/-. 2. THE LD. CIT(A) HAS ERRED IN DIRECTING NOT TO INC LUDE EXCISE DUTY, SALES TAX, INSURANCE AND FREIGHT TO THE TOTAL TURNOVER FOR THE PURPOSE OF COMPUTING BENEFITS U/S.10B OF THE ACT. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O . NOTICED THAT WHILE COMPUTING DEDUCTION U/S.10B OF THE ACT, ASSESSEE HA S NOT INCLUDED SALES TAX, EXCISE DUTY, FREIGHT AND INSURANCE IN THE TOTAL TURNOVER. A.O. WAS OF THE VIEW THAT THE TOTAL TURNOVER INCLUDES SALES TAX, EXCISE DUTY ETC. AND U /S.10B OF THE ACT, THERE IS NO DEFINITION OF TOTAL TURNOVER AS IS U/S.80HHC. HE W AS THEREFORE OF THE VIEW THAT FREIGHT, EXCISE DUTY AND SALES TAX SHOULD BE INCLUD ED IN TOTAL TURNOVER FOR DETERMINING DEDUCTION U/S.10B OF THE ACT. HE ACCOR DINGLY AFTER INCLUDING THE SAME IN THE TOTAL TURNOVER REWORKED THE DEDUCTION U/S.10 B OF THE ACT. ITA NO.2239/AHD/12 (ACIT VS. CS SPECIALITY CHEMIC ALS P. LTD.) A.Y. 08-09 3 5. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY HOLDING AS UNDER: 4.3 DECISION :- I HAVE CONSIDERED THE OBSERVATION OF THE AO IN THE ASSESSMENT ORDER AS WELL AS THE CONTENTIONS RAISED BY THE AR OF THE APPELLANT CAREFULLY. I HAVE ALSO LOOKED AT THE JUDGEMENTS RELIED ON BY THE AO AND TH E LAR. THE ISSUE IS CLINCHED IN FAVOUR OF THE APPELLANT BY THE RATIO OF THE JUDGEME NTS IN THE CASE OF CIT V/S. LAXMI MACHINE WORKS 290 ITR 667 (SC) AND CIT V/S. CATAPHA RMA (INDIA) LTD. 292 ITR 641 (SC). THE DECISION OF THE HON.'BLE BOMBAY HC IN THE CASE OF CIT V/S. GEM PLUS JEWELLERY INDIA LTD. WHEREIN, THE CASE LAWS RELIED ON BY THE LAR APPLIED HAS HELD THAT FREIGHT AND INSURANCE CHARGES DO NOT HAVE AN E LEMENT OF TURNOVER AND ARE TO BE EXCLUDED FROM THE TOTAL TURNOVER FOR THE PURPOSE OF COMPUTING EXEMPTION 1OA OF THE ACT. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN IN THE CASES REFERRED ABOVE, I AM INCLINED TO GO WITH THE CONTENTION OF THE LAR. THER EFORE, THE AO IS DIRECTED TO NOT TO INCLUDE EXCISE DUTY, SALES-TAX, INSURANCE AND FR EIGHT TO THE TOTAL TURNOVER FOR THE PURPOSE OF COMPUTING BENEFITS U/S. 10B OF THE ACT. THUS, THIS GROUND OF APPEAL IS ALLOWED. 6. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 6.1 BEFORE US, D.R. SUPPORTED THE ORDERS OF A.O. L D. A.R. ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE THE A.O. AND LD. CIT(A) AND FURTHER RELIED ON THE DECISION IN THE CASE OF CIT V/S. LAXMI MACHINE WORKS 290 ITR 667 (SC) & CIT V/S. GEM PLUS JEWELLERY INDIA LTD. (2011) 330 ITR 175 (BOM.). SHE, THUS, SUPPORTED THE ORDER OF LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS AS TO WHETHER EXCISE D UTY, SALES TAX, FREIGHT AND INSURANCE ARE TO BE INCLUDED IN THE TOTAL TURNOVER FOR THE PU RPOSE OF COMPUTATION OF DEDUCTION U/S.10B OF THE ACT. WE FIND THAT LD. CIT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF ASSESSEE HAS RELIED UPON THE DECISION OF HONBLE AP EX COURT IN THE CASE OF CIT V/S. LAXMI MACHINE WORKS (SUPRA) AND DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF CIT V/S. GEM PLUS JEWELLERY INDIA LTD. (SUPRA). WE FIND THAT HONBLE APEX COURT IN THE CASE OF LAXMI MACHINE WORKS (SUPRA) HA S HELD THAT EXCISE DUTY, SALES TAX ARE NOT INCLUDIBLE IN TOTAL TURNOVER IN THE F ORMULA CONTAINED IN SECTION 80HHC ITA NO.2239/AHD/12 (ACIT VS. CS SPECIALITY CHEMIC ALS P. LTD.) A.Y. 08-09 4 OF THE ACT. FURTHER, HONBLE BOMBAY HIGH COURT IN THE CASE OF GEM PLUS JEWELLERY (SUPRA) HAS HELD THAT FREIGHT AND INSURANCE CHARGES DO NOT HAVE AN ELEMENT OF TURNOVER AND ARE TO BE EXCLUDED FROM THE TOTAL TURN OVER FOR THE PURPOSE OF COMPUTING EXEMPTION U/S.10A OF THE ACT. BEFORE US, REVENUE H AS NOT PLACED ON RECORD ANY CONTRARY BINDING DECISION IN ITS SUPPORT. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AN D THUS, THE GROUND OF REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN OPEN COURT ON 06 - 04 - 2016. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 06/04/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, AHMEDABAD