ACIT, Moradabad V. M/s Asian Handicrafts, Moradabad

ITA 2311/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5564 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-02-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 28-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 80HHC; 80IB

Judgement Text

I.T.A. NO.2311/DEL/09 1/4 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.2311 /DEL/20009 ASSESSMENT YEAR : 2004-05 ACIT, M/S ASIAN HANDICRAFTS, CIRCLE-II, BYE PASS ROAD, PANDIT NAGLA, MORADABAD. V. MORADABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. BANITA DEVI, SR. DR. RESPONDENT BY : NONE. ORDER PER A.K. GARODIA, AM: THIS IS REVENUE'S APPEAL DIRECTED AGAINST THE ORDER OF LD CIT(A), BAREILLY DATED 4.3.2009 FOR ASSESSMENT YEAR 2004-05. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE A PPOINTED DATE OF HEARING AND HENCE WE PROCEED TO DECIDE THIS APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LD DR OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LD DR OF THE REVENUE THA T GROUND NO.1,2 & 3 ARE INTER-CONNECTED WITH READ AS UNDER:- 1. THE CIT(A), BAREILLY HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN ALLOWING BENEFIT OF SECTION 80IB ON THE AMOUNT OF E XPORT INCENTIVES WHICH WAS RIGHTLY HELD BY THE ASSESSING OFFICER AS HAVING NOT BEEN DERIVED FROM THE BUSINESS ACTIVITIES CARRIED ON BY THE ASSESSEE. . I.T.A. NO.2311/DEL/09 2/4 2. THE CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN NOT FOLLOWING THE DECISIONS AWARDED BY THE JURISDICTIONAL HIGH CO URT M/S MENTHA AND ALLIED PRODUCTS LTD. 7 MTC 625 ETC. MORE SPECIFICAL LY WHEN THE JURISDICTIONAL HIGH COURT ITSELF HAS NOT DISTINGUIS HED ITS OWN DECISION IN THE CASE REFERRED TO ABOVE AND HENCE DECISIONS (SUPRA) OUGHT TO HAVE BEEN FOLLOWED BY THE APPELLATE AUTHORITY IN DECIDING THE ISSUE, WHICH IS SQUARELY COVERED BY ALL THE DECISIONS MENTIONED AS ABOVE. 3. THE CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN TREATING THE AMOUNT OF DUTY DRAW BACK AS BEING DERIVED FROM THE EXPORT ACTIVITIES CARRIED ON BY THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT WHEN AS PER PROVISIONS OF SECTION 80HHC ITSELF, THE DUTY DRAW B ACK/EXPORT INCENTIVE (S) ARE NOT TREATED AS PROFIT DERIVED FROM EXPORTS, HOW SUCH RECEIPTS CAN BE QUALIFIED AS DERIVED INCOME (S) FOR THE PURPOSE OF SECTION 80IB OF THE IT ACT, 1961. 4. BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED BY THE ASSESSING OFFICER IN PARA NO.3.1. OF ASSESSMENT ORDER THAT THE ASSESSEE HAS R ECEIVED INCENTIVES BY WAY OF DUTY DRAW BACK TO THE TUNE OF RS.57,76,911/- AND TH E SAME IS CREDITED IN THE TRADING ACCOUNT AND ON THIS AMOUNT ALSO, THE ASSESS EE HAS CLAIMED DEDUCTION U/S 80IB OF THE INCOME TAX ACT, 1961. THE ASSESSIN G OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE REGARDING DEDUCTION 80IB WITH REGARD TO THIS AMOUNT OF DUTY DRAW BACK RECEIVED BY THE ASSESSEE. BEING AGGR IEVED, THE ASSESEE CARRIED THE MATTER IN APPEAL BEFORE LD CIT(A) WHO HAS DECID ED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND NOW THE REVENUE IS IN APPEAL BEFORE US . 5. IT IS SUBMITTED BY THE LD DR OF THE REVENUE THAT THIS ISSUE IS FULLY COVERED AGAINST THE ASSESSEE BY THE JUDGMENT OF HON'BLE APE X COURT RENDERED IN THE CASE OF LIBERTY INDIA AS REPORTED IN 317 ITR 218 (S C). RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BLE APEX COURT, THIS ISSUE IS DECID ED AGAINST THE ASSESSEE. ACCORDINGLY, THE ORDER OF THE LD CIT(A) ON THIS ISS UE IS REVERSED AND THAT OF THE ASSESSING OFFICER IS RESTORED. . I.T.A. NO.2311/DEL/09 3/4 6. IT WAS ALSO SUBMITTED BY THE LD DR OF THE REVENU E THAT GROUND NO.4 & 5 ARE INTER-CONNECTED WHICH READ AS UNDER:- 4. THE CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DIRECTING THE ASSESSING OFFICER TO TREAT THE AMOUNT OF RS.24,39,3 31/- AS PART OF EXPORT TURNOVER WHICH AS PER FORM 10CCA WERE NOT REALIZED WITHIN THE STIPULATED TIME AS GIVEN U/S 80HHC OF THE IT ACT. 5. WHILE ALLOWING THE RELIEF AS MENTIONED IN GROUND NO.4 ABOVE, THE CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN AD MITTING THE BANK REALIZATION CERTIFICATE TANTAMOUNT TO A NEW EVIDENC E WITHIN THE MEANING OF RULE 46A OF THE IT ACT, 1962 WITHOUT GIVING ANY OPP ORTUNITY TO THE ASSESSING OFFICER FOR MAKING EXAMINATION OF SUCH NE W EVIDENCE. 7. BRIEF FACTS OF THE CASE ARE THAT WHILE COMPUTING THE DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 80HHC, THE ASSESSING OFFICER HAS R EDUCED AN AMOUNT OF RS.24,39,331/- FROM, THE EXPORT TURNOVER FOR THE RE ASON THAT THIS AMOUNT WAS NOT REALIZED BY THE ASSESSEE WITHIN THE STIPULATED PERI OD. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD CIT (A) WHO HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE ON THE BASIS THAT T HE PAYMENT WAS RECEIVED BY THE ASSESSEE WITHIN THE EXTENDED TIME. IT IS FURTH ER NOTED BY THE LD CIT(A) A BANK CERTIFICATE IN THIS REGARD WAS FURNISHED BY TH E ASSESSEE BEFORE HIM. IT IS ALSO SUBMITTED BEFORE LD CIT(A) THAT THE ASSESSING OFFIC ER HAS NEVER ASKED FOR SUCH EVIDENCE IN COURSE OF ASSESSMENT PROCEEDINGS AND FO R THIS REASON, THE SAME COULD NOT BE FURNISHED BEFORE HIM. UNDER THESE FACT S, LD CIT(A) HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND NOW THE REVENUE IS IN APPEAL BEFORE US. 8. LD DR OF THE REVENUE SUPPORTED THE ASSESSMENT OR DER. 9. WE HAVE HEARD THE LD DR OF THE REVENUE AND SINCE LD CIT(A) HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE ON THIS BASIS THAT THE AMOUNT IN DISPUTE WAS . I.T.A. NO.2311/DEL/09 4/4 REALIZED BY THE ASSESSEE WITHIN THE EXTENDED TIME, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD CIT(A) ON THIS ISS UE AND WE THEREFORE CONFIRM THE SAME. THESE TWO GROUNDS OF THE REVENUE ARE REJECTE D. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED. 11. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE OF HEARING I.E. 15.2.2010. SD/- SD/- (R.P. TOLANI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 15. .2.2010. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).