DCIT, Circle - 4, Kolkata, Kolkata V. M/s. Bush Tea Co. Ltd., Kolkata

ITA 2245/KOL/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3191 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 03-06-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 22-12-2010
• Court: TRIBUNAL
• Department Lawyers: K N JANA
• Assessee Lawyers: SANJIB BARBORA; R P AGARWALA
• Keywords: Business income
• Section: 143(3); 80HHC; 263

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () . .. . . .. . , ,, , , ! ' #!' ' #!' ' #!' ' #!', ,, , ] ]] ] [BEFORE HONBLE SRI N.S.SAINI AM & HONBLE SRI M AHAVIR SINGH, JM] !% !% !% !% /ITA NO.2245/KOL/2010 #& '(/ ASSESSMENT YEAR : 2001-02 (*+ / APPELLANT ) - - ( -.*+ /RESPONDENT) D.C.I.T., CIRCLE-4, M/S.BUSH TEA CO.LTD.,. KOLKATA -VERSUS- KOLKATA (PAN:AABCB 4130 C) *+ / 0 / FOR THE APPELLANT: SHRI K.N.JANA, SR.DR -.*+ / 0 / FOR THE RESPONDENT: SHRI R.P.AGARWALA & SHRI SANJIB BARBORA, FCA 1 2 / 3 /DATE OF HEARING : 13.06.2013 4' / 3 /DATE OF PRONOUNCEMENT : 21.06.2013. 5 / ORDER PER SHRI N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-IV, KOLKATA DATED 14.12.2009. 2. THE APPEAL FILED BY THE REVENUE IS BARRED BY LIM ITATION OF 71 DAYS. THE REVENUE HAS FILED A CONDONATION PETITION AND WE FIN D THAT THE REASON GIVEN FOR DELAY IN FILING THE APPEAL IS A PLAUSIBLE ONE AND HENCE W E CONDONE THE DELAY IN FILING THE APPEAL BY THE REVENUE AND ADMIT THE APPEAL OF THE R EVENUE FOR HEARING. 3. THE REVENUE IN THIS APPEAL HAS RAISED THE FOLLO WING GROUNDS OF APPEAL : 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A) ERRED IN LAW IN GIVING DECISION THAT 90% OF INTEREST OF RS.3,52,841/- NETT ED OFF WITH INTEREST PAID OUGHT NOT TO HAVE BEEN EXCLUDED IN DETERMINING THE PROFITS OF BU SINESS FOR THE PURPOSE OF SECTION 80HHC WITHOUT CONSIDERING THE FACT THAT IN THE CASE OF SOUTH INDIA SHIPPING CORPORATIONS LTD VS- CIT [1999] 240 ITR 24(MAD) AN D PANDIAN CHEMICALS LTD. VS. CIT [2003] 262 ITR 278 (SC) IT HAS BEEN JUDICIALLY HELD THAT INTEREST INCOME OF THE ASSESSEE IS INCOME FROM OTHER SOURCES AND LIABLE TO DEDUCTION U/S 80HHC. IT A NO.2245/KOL/2010 DCIT,CIRCLE-4, KOLKATA VS M/S.BUSH TEA CO.LTD,KO L. A.YR.2001-02 2 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, LD. CIT(A) ERRED IN LAW IN GIVING DECISION THAT 90% OF RENT OF RS.4,71,000/- NETTED OFF WITH RENT PAID OUGHT NOT TO HAVE BEEN EXCLUDED IN DETERMINING THE PROFITS OF BUSINES S FOR THE PURPOSE OF SECTION 80HHC WITHOUT CONSIDERING THE FACT THAT IN THE CASE OF SO UTH INDIA SHIPPING CORPORATIONS LTD VS- CIT [1999] 240 ITR 24(MAD) AND PANDIAN CHEMICAL S LTD. VS. CIT [2003] 262 ITR 278 (SC) IT HAS BEEN JUDICIALLY HELD THAT INTEREST INCOME OF THE ASSESSEE IS INCOME FROM OTHER SOURCES AND LIABLE TO DEDUCTION U/S 80HHC. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW IN ALLOWING RS.3,74,000/- AS PAYMENT OF GRATUITY SINCE THE ASSESSEE DID NOT CLAIM THE PAYMENT OF GRATUITY OF RS.3,74,000/- AT THE ASSESSM ENT STAGE AND IT HAS ONLY CLAIMED RS.88,000./-. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD.CIT(A) HAS ERRED IN LAW IN ALLOWING GROUND OF APPEAL FILED BY THE ASSESSEE REL ATING TO COMPUTATION OF THE FIGURE OF ADJUSTED PROFITS OF THE BUSINESS FOR THE PURPOSE OF SECTION 80HHC AND WORKING OUT THE AMOUNT OF RELIEF U/S 80HHC WITHOUT CONSIDERING THE FACT THAT THIS GROUND INVOLVES A CONSEQUENTIAL EFFECT ON THE REWORKING OF DEDUCTION U/S 80HHC. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD.CIT(A) HAS ERRED IN LAW IN ALLOWING GROUND OF APPEAL FILED BY THE ASSESSEE REL ATING TO THE CLAIM OF THE ASSESSEE THAT ADJUSTED PROFITS OF THE BUSINESS SHOULD BE INCREASE D BY RS.1,86,709/- AND RELIEF ALLOWABLE U/S 80HHC SHOULD BE MODIFIED WITHOUT CONS IDERING THE FACT THAT THIS GROUND INVOLVES A CONSEQUENTIAL EFFECT ON THE REWORKING O F DEDUCTION U/S 80HHC. 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN ALLOWING ASSESSEES CLAIM OF FURTHER DEDUCTION U/S 80HHC RELATING TO FACE VALUE OF DEPB ENTITLEMENTS AMOUNTING TO RS.27,80,928/- WITHO UT CONSIDERING THE FACT THAT THE RELIEF GIVEN TO THE ASSESSEE AHS VIOLATED THE CBDT CIRCULAR F.NO.153/93/2004-TPL, DT.08.09.2004. 7. THAT THE APPELLANT CRAVES FOR LEAVE TO ADD, DELE TE OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND MATERIALS AVAILABLE ON RECORD. IN THE INS TANT CASE THE ORIGINAL ASSESSMENT WAS MADE U/S 143(3) OF THE ACT ON 17.03.2004 DETERM INING THE TOTAL INCOME OF THE ASSESSEE AT RS.1,02,41,451/- AFTER ALLOWING DEDUCTI ON U/S 80HHC OF THE ACT AT RS.14,87,709/-. THE LD. CIT ISSUED NOTICE U/S 263 O F THE ACT ON THE GROUND THAT DEDUCTION U/S 80HHC OF THE ACT WAS WRONGLY ALLOWED IN RESPECT OF SALE PROCEEDS OF DEPB OF RS.14,87,709/-. 4.1. THE LD. CIT AFTER HEARING THE ASSESSEE PASSED ORDER U/S 263 OF THE ACT ON 17.03.2006 THEREBY SETTING ASIDE THIS ISSUE BACK TO THE FILE OF THE AO FOR ADJUDICATION AFRESH. IN PURSUANCE THEREOF THE AO PASSED FRESH OR DER ON 23.11.2006 DETERMINING TOTAL INCOME OF THE ASSESSEE AT RS.1,12,87,919/- AN D THEREIN ALLOWING DEDUCTION U/S 80HHC OF THE ACT AT RS.4,46,241/- IN PLACE OF RS.14 ,87,709/- ALLOWED IN ORIGINAL IT A NO.2245/KOL/2010 DCIT,CIRCLE-4, KOLKATA VS M/S.BUSH TEA CO.LTD,KO L. A.YR.2001-02 3 ASSESSMENT. THUS THE AO IN THE REVISED ORDER DATED 23.11.2006 DISALLOWED 80% OF SALE OF IMPORT LICENCE OF RS.12,95,585/- WHICH WORK ED OUT TO RS.10,36,468/-. 4.2. THE IMPUGNED ORDER OF THE LD. CIT(A) IS ARISIN G OUT OF THE ABOVE REVISED ORDER OF THE AO DATED 23.11.2006. 4.3. IN THIS APPELLATE ORDER THE LD. CIT(A) DIRECTE D THE AO IN RESPECT OF VARIOUS ISSUES WHICH HAVE BEEN RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL BEFORE US. THE ISSUE DECIDED BY THE LD. CIT(A) ARE RELATING TO ALL OWING OF DEDUCTION U/S 80HHC OF THE ACT WITHOUT REDUCING 90% OF THE INTEREST INCOME AND RENTAL INCOME FROM BUSINESS INCOME, ALLOWING OF DEDUCTION FOR GRATUITY AND ENHA NCEMENT OF PROFIT OF BUSINESS AND ALLOWING OF DEDUCTION U/S 80HHC OF THE ACT ON THE F ACE VALUE OF DEPB OF RS.27,80,928/-. 4.4. WE FIND THAT NONE OF THE ABOVE ISSUES ARE OUT OF THE ORDER OF THE ASSESSMENT WHICH WAS IN APPEAL BEFORE THE LD. CIT(A). THEREFOR E THE LD. CIT(A) WAS NOT JUSTIFIED IN ADJUDICATING THE ABOVE ISSUES VIDE THE IMPUGNED ORDER. WE THEREFORE SET ASIDE THE ORDER OF THE LD. CIT(A) IN RESPECT OF THE ABOVE ISS UES. THUS THE APPEAL OF THE REVENUE IS ALLOWED. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.06.2013. SD/- SD/- [ .' #!' , ] [ .., ,, , ] [MAHAVIR SINGH ] [N.S.SAINI] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (3 3 3 3) )) ) DATE: 21.06.2013. R.G.(.P.S.) IT A NO.2245/KOL/2010 DCIT,CIRCLE-4, KOLKATA VS M/S.BUSH TEA CO.LTD,KO L. A.YR.2001-02 4 5 / -##6 76'8- COPY OF THE ORDER FORWARDED TO: 1. M/S.BUSH TEA CO.LTD., 18A, PARK STREET, 8 TH FLOOR, KOLKATA-700069. 2 D.C.I.T., CIRCLE-4, KOLKATA 3 . CIT KOLKATA 4. CIT (A)-IV, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. .6 -#/ TRUE COPY, 51/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES