DCIT CC-38, MUMBAI V. EXCEL INDUSTRIES TD, MUMBAI

ITA 2251/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0974 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-07-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 09-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SAISUDHA MULANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, AM AND SHRI V. DUR GA RAO, JM I.T.A. NO.2251/MUM/2009 ASSESSMENT YEAR : 2004-05 THE DY.COMMISSIONER OF INCOME-TAX, CC-38, R.NO. 32(1), AAYAKAR BHAVAN, MUMBAI 400 020 VS. M/S. EXCEL INDUSTRIES LIMITED, 184-187, EXCEL ESTATE, S.V. ROAD, JOGESHWARI (W), MUMBAI 400 108. PAN: AAACE 2488 F (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI HARI GOVIND SINGH/NARESH BA LODIA RESPONDENT BY : MS.SAISUDHA MULANI O R D E R PER J. SUDHAKAR REDDY, AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), CENTRAL VI, M UMBAI, DATED 05.01.2009, ON THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING DEDUCTIONS OF `.19,51,254/- IN RE SPECT OF THE ADVANCE LICENSE BENEFITS RECEIVABLE BY THE ASSESSEE AND DUTY FREE R EPLENISHMENT CERTIFICATE (DFRC) RECEIVABLE OF RS. 77,27,862/- WE HAVE HEARD SHRI HARI GOVIND SINGH, LEARNED DEPAR TMENTAL REPRESENTATIVE ANDMS. SAISUDHA MULANI, LEARNED COUNSEL FOR THE ASSESSEE. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE CASE LAWS C ITED, WE AGREE WITH THE SUBMISSION OF MS. SAISUDHA MULANI THAT THE ISSUE IN QUESTION HAS BEEN CONSIDERED BY THE MUMBAI BENCH I OF THE TRIBUNAL IN THE ASSESSEES OWN CAS E IN ITA NO. 4346/MUM/97 ORDER DATED 6 TH OCTOBER, 2003, ITA NO. 4145/M/1998 ORDER DATED 27. 1.2004 AND ITA NOS. 2009/M/2000 AND OTHERS ORDER DATED 12.1.2009. THE TRIBUNAL VIDE ITS ORDER DATED 6 TH OCTOBER, 2003 IN PARAS 27, 28,29 IN ITA NO.436/M/9 7, HELD AS FOLLOWS: 2 GROUND NO. 9 ALONG WITH ITS VARIOUS PARTS PERTAINS TO TAXATION OF ADVANCE LICENCE BENEFIT RECEIVABLE AMOUNTING TO RS. 2,55,42 ,259/-. THE ASSESSING OFFICER TAXED THE SAME AND THE LEARNED CIT(A) HAS U PHELD THE ASSESSING OFFICER S ACTION. HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LEARNED AR OF ASSESSEE HAS CONTENDED THAT THIS ISSUE IS COVERED IN ASSESSEES FAVOUR BY THE ORDER OF I.T.A.T, MUMBAI I N THE CASE OF JAMSHRI RANJIT SINGHJI SPINNING & WEAVING MILLS LTD. V. IAC (41 ITD 142, BOM.). AS AGAINST THIS, THE LEARNED DR OF REVENUE HAS SUPPORT ED THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AS ALSO TH E CITED DECISIONS. IN 41 ITD 142(BOM), THE APPELLANT HAD EXPORTED GOODS AND AS A RESULT, IT WAS ENTITLED TO IMPORT GOODS UNDER DUTY EXEMPTION SCHEM E. IN THAT CASE, THOUGH NO IMPORTS WERE ACTUALLY EFFECTED DURING THE YEAR BUT ESTIMATED BENEFIT FROM SUCH IMPORTS WAS ACCOUNTED FOR IN THE BOOKS OF ASSESSEE. IT WAS HELD BY I.T.A.T, BOMBAY THAT VALUE OF IMPORT EN TITLEMENT RECEIVABLE BY APPELLANT COULD NOT BE TREATED AS INCOME ACCRUED TO THE APPELLANT IN THE YEAR UNDER APPEAL, SINCE, IT HAD NEITHER ACCRUED NOT ARI SEN DURING THE YEAR OF ACCOUNT. IN OUR CONSIDERED OPINION, THE CITED DECIS ION SQUARELY APPLIES TO THE FACTS OF THE CASE IN HAND. WE, THEREFORE, RESPECTFU LLY FOLLOW THE AFORESAID ORDER OF THE TRIBUNAL AND HOLD ACCORDINGLY AND IN T URN WE DELETE THE ADDITION. RESPECTFULLY FOLLOWING THE ORDERS OF THE CO-ORDINA TE BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE, WE HAVE TO NECESSARY HOLD THAT ADVANCE LICENSE BENEFITS RECEIVABLE AND DUTY FREE REPLENISHMENT CERTIFICATE RECEIVABLE AMOUNTING TO ` 1 9,51,254/- AND ` 77,27,862/- RESPECTIVELY DID NOT ACCRUE TO THE ASS ESSEE ONLY WHEN THE RAW MATERIAL IMPORTED IS CONSUMED. ACCORDINGLY, WE UPHOLD THE ORDER OF THE FIRST APPELLATE AUTHORITY. 3. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THI S 29 TH DAY OF JULY, 2010. SD. SD. (V. DURGA RAO) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED THE 29 TH JULY, 2010. KN COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT, CENTRAL-III, MUMBAI 4. THE CIT(A), CENTRAL-VI, MUMBAI 5. THE DR G BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, ITAT, MUMBAI 3