ACE IMPEX, MUMBAI V. ACIT 12(1), MUMBAI

ITA 2329/MUM/2011

• Counselvise Citation: 232919914 RSA 2011
• Duration Of Justice: 3 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 27-11-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 22-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Keywords: Reopening of assessment; Difference of opinion; Onus to prove; Change of opinion
• Section: 143(3); 80HHC; 80IB; 147; 28

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , ! BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER & SHRI SANJAY GARG ,JUDICIAL MEMBER ITA NO.2329/MUM/2011(A.Y. 2004-05) ACE IMPEX, 105, NEW TEJPAL INDL. PREMISES, ANDHERI KURLA ROAD, SAKINAKA, ANDHERI (E), MUMBAI 400 072 ' ' ' ' / VS. THE ASST.COMM.OF INCOME TAX, RANGE 12(1), AAYKAR BHAVAN, MK ROAD, MUMBAI 400020 # ./ $ ./ PAN/GIR NO. : AAGFA0317A (APPLICANT) .. RESPONDENT ) APPELLANT BY SHRI ISWAR RATHI RESPONDENT BY SHRI S. PADMAJA ' % &' / DATE OF HEARING : 01/12/2014 ()* % &' / DATE OF PRONOUNCEMENT : 23/01/2015 / O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST ORDER OF LD. CIT(A)-23 MUMBAI DATED 31/1/2011 FOR ASSESSMENT YEA R 2004-05. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX APPE ALS HAS ERRED IN CONFIRMING THE REOPENING OF ASSESSMENT, WHEREAS AGAINST THE ORIGIN AL ASSESSMENT ORDER U/S 143 (3) THE ITA NO.2329/MUM/2011(A.Y. 2004-05) 2 APPELLANT HAS FILED AN APPEAL BEFORE THE CIT (A) AN D HENCE THE ORIGINAL ASSESSMENT ORDER U/S 143(3) HAS BEEN MERGED WITH THE ORDER OF THE CI T (A). 2. FURTHER WITHOUT PREJUDICE TO THE ABOVE, THE LEAR NED COMMISSIONER OF INCOME TAX APPEALS HAS ERRED IN CONFIRMING THE REOPENING OF AS SESSMENT FOR CHANGE OF OPINION ON THE FACTS WHICH WERE ON RECORDS AND THE SAME HAS BEEN C ONSIDERED BY THE ASSESSING OFFICER WHILE PASSING THE ORIGINAL ASSESSMENT U/S 143 (3) O F THE IT ACT. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMM ISSIONER OF INCOME TAX APPEALS HAS ERRED IN CONFIRMING THE REDUCTION OF CLAIM U/S 80 I B ON EXPORT INCENTIVES IN THE FORM OF DEPB. 4. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMM ISSIONER OF INCOME TAX APPEALS HAS ERRED IN CONFIRMING THE REDUCTION OF CLAIM U/S 80 H HC ON TOTAL EXPORT INCENTIVES RECEIVED IN THE FORM OF DEPB. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN CONFIRMING THE CHARGEABILITY OF INCOME TAX ON PROFIT ON TRANSFER O F DUTY ENTITLEMENT PASS BOOK SCHEME DEFINED U/S 28 (HID), WHEREAS THE SAME IS NOT FORMI NG PART OF INCOME AS DEFINITION U/S 2 (24). 6. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN NOT ADJUDICATING THE ISSUE ON CHARGEABILITY OF INTEREST U/S 234 B, 2 34 C AND 220 (2) THOUGH AS PER CBDTS CIRCULAR NO. 2/2006 DT. 17/01/2006 NO INTEREST SHOU LD HAVE BEEN CHARGED. 7. YOUR APPELLANT CRAVES LEAVE TO CONSIDER EACH OF THE ABOVE GROUNDS OF APPEAL WITHOUT PREJUDICE TO EACH OTHER AND TO ADD, ALTER, AMEND OR FURNISH FRESH AND DETAILED GROUNDS OF APPEALS. 2. THE BRIEF FACTS ARE THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 30/10/2004 DECLARING TOTAL INCOME AT RS.4,80,13,46 0/- IN WHICH DEDUCTION UNDER SECTION 80 HHC AND 80 IB OF THE INCOME TAX ACT, 1961 (THE ACT) WAS CLAIMED. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 18/9/2006 ASSESSING TOTAL INCOME AT RS.5,95,91,520/-. THE AO IN THE SAID ASSESSMENT ORDER HAD ALLOWED DEDUCTION UNDER SECTION 80HHC AT RS.86,78, 486/- AND DEDUCTION UNDER SECTION 80 IB AT RS.2,11,10,855/-. THE AO THEREAF TER OBSERVED THAT WHILE CALCULATING DEDUCTION ALLOWABLE UNDER SECTION 80HHC THE TOTAL ADJUSTED TURNOVER WAS TAKEN AT RS.31,54,41,033/-. HOWEVER, WHILE DOING SO, TURNO VER OF 80IB UNIT WAS NOT INCLUDED ITA NO.2329/MUM/2011(A.Y. 2004-05) 3 IN THE TOTAL TURNOVER OVER. THUS, THE ASSESSMENT H AD RESULTED INTO UNDER ASSESSMENT TO THE EXTENT OF RS.18,53,039/-. THE AO ALSO OBSERVED THAT WHILE CALCULATING PROFITS ELIGIBLE FOR CLAIM OF DEDUCTION UNDER SECTION 80IB , THE ASSESSEE HAD INCLUDED DEPB OF RS.92,62,828/-. SINCE DEPB WAS NOT A PROFIT DER IVED FROM INDUSTRIAL UNDERTAKING, THEREFORE, THE SAME WAS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB OF THE ACT. HE, THEREFORE, RELYING UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF STERLING FOODS, 237 ITR 579(SC) REOPENED THE ASSESS MENT UNDER SECTION 147 OF THE ACT. THE ASSESSEE OBJECTED TO THE REOPENING OF THE ASSESSMENT AND ALSO CONTESTED THE PROPOSED ADDITIONS ON MERIT. IT WAS SUBMITTED THA T THE REOPENING WAS BASED ONLY ON CHANGE OF OPINION WHEREAS THE ISSUE WAS PROPERLY DE ALT WITH DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. IT WA S ALSO SUBMITTED THAT THE ASSESSEE WAS MAINTAINING SEPARATE BOOKS OF ACCOUNT FOR BOTH THE UNITS AND AS SUCH WHILE CALCULATING DEDUCTION UNDER SECTION 80HHC ONLY REL EVANT FIGURE OF NON 80IB UNITS WAS REQUIRED TO BE CONSIDERED AND NOT THE TOTAL TU RNOVER TO THE ENTIRE UNIT. IT WAS ALSO SUBMITTED THAT SO FAR THE DEDUCTION UNDER SECT ION 80IB RELATING TO DEPB WAS CONCERNED, THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF STERLING FOODS (SUPRA) WAS NOT APPLICABLE WHICH WAS GIVEN IN RELAT ION TO DEDUCTION UNDER SECTION 80HH AND NOT UNDER SECTION 80IB OF THE ACT. THE A O HOWEVER, WAS NOT SATISFIED WITH THE SUBMISSIONS OF THE ASSESSEE. HE, THEREFOR E, INCLUDED THE TURNOVER OF 80IB UNIT AND THUS, TOOK THE TOTAL TURNOVER OF BOTH THE UNITS AT RS.43,57,35,269/-. HE OBSERVED THAT AS PER THE THE THIRD PROVISO TO SECT ION 80HHC WHICH HAS BEEN INSERTED BY THE TAXATION LAW AMENDMENT ACT, 2005 WITH RETROS PECTIVE EFFECT FROM 1/4/1998, ITA NO.2329/MUM/2011(A.Y. 2004-05) 4 THE DEDUCTION UNDER SECTION 80HHC COULD BE ALLOWED TO THE ASSESSEE WITH RESPECT TO DEPB, ONLY IF ,THE ASSESSEE FULFILS CERTAIN CONDITI ONS AS LAID DOWN IN THE SAID PROVISO. THE BURDEN TO PROVE THAT THE ASSESSEE FULFILLED THO SE CONDITIONS WAS ON THE ASSESSEE, WHICH , THE ASSESSEE FAILED TO DISCHARGE. THE AO,T HEREFORE, TOOK THE VALUE OF DEPB FOR CALCULATING DEDUCTION UNDER SECTION 80 HHC AT RS.NIL. HE FURTHER OBSERVED THAT AS PER THE PROVISIONS OF SECTION 80IA(9) R.W. PROVI SIONS OF SECTION 80 IB(13), IF AN ASSESSEE HAD CLAIMED THE DEDUCTION UNDER SECTION 80 IB, THEN THE DEDUCTION UNDER ANY PROVISION OF CHAPTER VIA-C CANNOT BE ALLOWED. HE, THEREFORE, HELD THAT NO DEDUCTION COULD BE ALLOWED TO THE ASSESSEE AS PER P ROVISIONS OF SECTION 80HHC WITH RESPECT TO THE PROFITS THAT WERE CLAIMED AND ALLOWE D AS PER PROVISIONS OF SECTION 80IB. HE ALSO HELD THAT THE DEPB RECEIPTS DID NOT CONSTITUTE THE PROFITS DERIVED FROM INDUSTRIAL UNDERTAKING, HENCE, WAS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE PREFE RRED AN APPEAL BEFORE LD. CIT(A). 3. LD. CIT(A) UPHELD THE FINDINGS OF THE AO IN REOP ENING OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT HOLDING THAT THE AO HA D SUFFICIENT REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSM ENT. HE ALSO UPHELD THE FINDINGS/COMPUTATION MADE BY THE AO WITH REGARD TO SECTION 80HHC AND 80IB OF THE ACT. HE HOWEVER, NOTICED THAT THERE WERE CERTAIN C ALCULATION MISTAKE WHILE COMPUTING THE INCOME WHICH HE DIRECTED THE AO TO RE CTIFY. AGGRIEVED BY THE ORDER OF LD. CIT(A) THE ASSESSEE HAS COME IN APPEAL BEFOR E US. ITA NO.2329/MUM/2011(A.Y. 2004-05) 5 GROUND NO.1 &2. 4. VIDE GROUND NO.1 & 2 THE ASSESSEE HAS AGITATED THE REOPENING OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT. LD. AR OF THE ASSESSEE DREW OUR ATTENTION TO PAPER BOOK PAGE -37, WHICH IS THE COPY OF REASON S RECORDED BY THE AO ON THE BASIS OF WHICH THE AO FORMED THE BELIEF THAT THE INCOME O F THE ASSESSEE HAD ESCAPED ASSESSMENT DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. THE FIRST REASON MENTIONED BY THE AO IS THAT WHILE CALC ULATING DEDUCTION ALLOWABLE UNDER SECTION 80HHC THE TURNOVER OF 80IB UNIT WAS NOT INC LUDED WHICH RESULTED INTO UNDER ASSESSMENT OF INCOME. THE ASSESSEE HAS CONTENDED THAT IT WAS MAINTAINING SEPARATE ACCOUNTS OF BOTH THE UNITS AND THE TURNOVER OF 80IB UNIT WAS NOT TO BE INCLUDED IN THE TOTAL TURNOVER. WE FIND THAT AS PER THE PROVISIONS OF SECTION 80HHC THE TURNOVER OF 80IB AND NON 80IB UNITS IS TO BE TAKEN TOGETHER, HE NCE, THERE WAS ESCAPEMENT OF INCOME AS THE AO HAD FAILED TO INCLUDE THE TOTAL T URNOVER OF 80IB UNIT INTO TOTAL TURNOVER OF THE BUSINESS OF THE ASSESSEE. HENCE, T HE REOPENING OF THE ASSESSMENT ON THIS GROUND WAS VALID AS THE AO HAD REASONS TO BELI EVE THAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT. THE SECOND ISSUE ON WHICH THE ASSESSMENT WAS REOPENED WAS IN RELATION TO RECEIPTS OF DEPB, WHET H, ELIGIBLE FOR 80 IB DEDUCTION. THIS ISSUE AT THE TIME OF REOPENING OF THE ASSESSME NT WAS A DEBATABLE ISSUE. THE VIEW TAKEN BY THE AO THE ASSESSMENT PROCEEDINGS WAS THAT DEPB RECEIPTS HAD TO BE INCLUDED IN RESPECT OF IN THE DEDUCTIONS CLAIMED U NDER SECTION 80IB OF THE ACT. THE ITA NO.2329/MUM/2011(A.Y. 2004-05) 6 OTHER VIEW THAT THE DEPB RECEIPTS WERE NOT THE INCO ME DERIVED FROM INDUSTRIAL UNDERTAKING HENCE, NOT ELIGIBLE FOR DEDUCTION UNDE R SECTION 80IB WAS ALSO A POSSIBLE VIEW WHICH WAS LATER ON UPHELD BY THE HONBLE SUPRE ME COURT IN THE CASE OF LIBERTY INDIA VS. CIT, 317 ITR 218 (SC). HOWEVER, AT THE TIME OF REOPENING OF THE ASSESSMENT, THE VIEW TAKEN BY THE AO DURING THE ASS ESSMENT PROCEEDINGS UNDER SECTION 143(3), WAS ONE OF THE POSSIBLE VIEW, HENCE , THE REOPENING ON THIS GROUND WAS NOT JUSTIFIED. 4.1 HOWEVER, SINCE WE HAVEUPHELD THAT THE FIRST CON TENTION THAT THE TOTAL TURNOVER WOULD INCLUDE TURNOVER OF 80IB UNIT, HENCE, THE AO HAD REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT, HE NCE, REOPENING OF THE ASSESSMENT IS HELD TO BE VALID. THIS ISSUE IS ACCORDINGLY DEC IDED AGAINST THE ASSESSEE. GROUND NO.3,4,&5: 5. GROUNDS NO.3,4 & 5 ARE INTER CONNECTED AND HENC E THE SAME ARE TAKEN TOGETHER FOR ADJUDICATION. VIDE GROUND NO.3 THE AS SESSEE HAS AGITATED THE ACTION OF LD. CIT(A) IN REDUCING THE RECEIPTS OF DEPB FROM DE DUCTION CLAIMED UNDER SECTION 80IB OF THE ACT. GROUND NO.4 & 5 RELATE TO THE COM PUTATION OF DEDUCTION UNDER SECTION 80HHC OF THE ACT AND CHARGEABILITY OF INCO ME IN RELATION TO EXPORT INCENTIVES RECEIVED BY THE ASSESSEE IN THE FORM OF DEPB. ITA NO.2329/MUM/2011(A.Y. 2004-05) 7 5.1 THE AO HELD THAT DEPB PROFIT WAS NOT ELIGIBLE FOR DEDUCTION U/S 80IB AS THE SAME WAS NOT THE INCOME DERIVED FROM ELIGIBLE INDUS TRIAL UNDERTAKING. IT MAY BE OBSERVED THAT THE HONBLE SUPREME COURT IN THE CAS E OF LIBERTY INDIA V. CIT[(2009) 317 ITR 218 (SC)] HAS HELD THAT DUTY DRAWBACK / D EPB ARE NOT DERIVED FROM INDUSTRIAL UNDERTAKING AND HENCE NO DEDUCTION IS AV AILABLE U/SS 80-I, 80-IA AND 80- IB. THIS ISSUE IS ACCORDINGLY DECIDED AGAINST THE A SSESSEE. SO FAR THE DEDUCTION U/S 80HHC IN RELATION TO RECEIPTS OF DEPB IS CONCERNED , WE MAY NOTE HERE THAT CERTAIN AMENDMENTS HAVE BEEN MADE IN SECTION 28 & 80HHC OF THE INCOME TAX ACT VIDE TAXATION LAWS AMENDMENT ACT, 2005, ACCORDING TO WHI CH, THE ASSESSEE WHOSE TOTAL EXPORT TURNOVER EXCEEDS RS. 10 CRORES, IS NOT ENTIT LED FOR THE DEDUCTION U/S.80-HHC ON THE RECEIPT OF DEPB LICENCE PREMIUM UNLESS HE FU LFILLS THE FOLLOWING TWO CONDITIONS :- (A) HE HAD AN OPTION TO CHOOSE EITHER THE DUTY DRA WBACK OR THE DUTY ENTITLEMENT PASS BOOK SCHEME, BEING THE DUTY REMISS ION SCHEME; AND (B) THE RATE OF DRAWBACK CREDIT ATTRIBUTABLE TO THE CUSTOMS DUTY WAS HIGHER THAN THE RATE OF CREDIT ALLOWABLE UNDER THE DUTY ENTITLE MENT PASS BOOK SCHEME BEING THE DUTY REMISSION SCHEME. 5.2 THE SAID AMENDED PROVISIONS HAVE BEEN MADE OPER ATIVE RETROSPECTIVELY W.E.F. 1.4.1998. THE ASSESSING OFFICER OBSERVED THAT IN V IEW OF THE AMENDED PROVISIONS, THE ASSESSEE WAS NOT ENTITLED FOR DEDUCTION U/S. 80 HHC ON THE RECEIPT OF DEPB INCENTIVES AS THE ASSESSEE DID NOT FURNISH THE REL EVANT DETAILS IN RESPECT OF THOSE CREDITS/RECEIPTS AND THUS FAILED TO JUSTIFY THE CLA IM U/S. 80HHC. HOWEVER, WE FIND ITA NO.2329/MUM/2011(A.Y. 2004-05) 8 THAT THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF VIJAYA SILK HOUSE (BANGALORE) LTD. (WP NO. 2446 OF 2010 AONGWITH OTHER WPS), WHER EIN THE TAXATION LAWS AMENDMENT ACT, 2005 WAS CHALLENGED IN RESPECT OF IN SERTION OF CLAUSE (IIID) & (IIIE) TO SECTION 28 AND INSERTION OF THE THIRD AND FOURTH PROVISOS TO SECTION 80HHC OF THE INCOME TAX ACT, 1961, HAS DISPOSED OFF THE SAID PE TITION IN VIEW AND IN TERMS OF THE LAW LAID DOWN BY HON'BLE GUJARAT HIGH COURT PASSED IN OTHER SIMILAR WRIT PETITIONS. OPERATIVE PART OF THE ORDER IS REPRODUCED AS UNDER :- 26. ON CONSIDERATION OF THE ENTIRE MATERIALS ON RE CORD, WE, THEREFORE, FIND SUBSTANCE IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE PETITIONE RS THAT THE IMPUGNED AMENDMENT IS VIOLATIVE FOR ITS RETROSPECTIVE OPERATION IN ORDER TO OVERCOME THE DECISION OF THE TRIBUNAL, AND AT THE SAME TIME, FOR DEPRIVING THE BENEFIT EAR LIER GRANTED TO A CLASS OF THE ASSESSEES WHOSE ASSESSMENTS WERE STILL PENDING ALTHOUGH SUCH BENEFIT WILL BE AVAILABLE TO THE ASSESSEES WHOSE ASSESSMENTS HAVE ALREADY BEEN CONCL UDED. IN OTHER WORDS, IN THIS TYPE OF SUBSTANTIVE AMENDMENT, RETROSPECTIVE OPERATION CAN BE GIVEN ONLY IF IT IS FOR THE BENEFIT OF THE ASSESSEE BUT NOT IN A CASE WHERE IT AFFECTS EVE N A FEWER SECTION OF THE ASSESSEE. 27. WE, ACCORDINGLY, QUASH THE IMPUGNED AMENDMENT O NLY TO THIS EXTENT THAT THE OPERATION OF THE SAID SECTION COULD BE GIVEN EFFECT FROM THE DATE OF THE AMENDMENT AND NOT IN RESPECT OF EARLIER ASSESSMENT YEARS OF THE ASSESSEES WHOSE EXPORT TURNOVER IS ABOVE RS. 10 CRORE. IN OTHER WORDS, THE RETROSPECTIVEAMENDMENT SHOULD NOT BE DETRIMENTAL TO ANY OF THE ASSESSEE. 5.3 LEARNED AR HAS FURTHER BROUGHT OUR ATTENTION TO THE LAW LAID DOWN BY HON'BLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS VS. CIT, 342 ITR 49, WHERE IN THE HONBLE SUPREME COURT HAS OBSERVED THAT THE OBJECTIVE OF DEPB IS TO NEUTRALISE THE INCIDENCE OF CUSTOMS DUTY ON THE IMPORT CONTENT OF THE EXPORT PRODUCTS. HENCE, IT HAS DIRECT NEXUS WITH THE COST OF THE IMPORTS MADE BY AN EXPORTER FOR MANUFACTURING THE EXPORT PRODUCTS. THE COST OF CUSTOMS DUTY IS NE UTRALIZED UNDER THE DEPB SCHEME, BY GRANTING A DUTY CREDIT AGAINST THE EXPORT PRODUC T AND THIS CREDIT CAN BE UTILISED FOR PAYING CUSTOMS DUTY ON ANY ITEM WHICH IS FREELY IMP ORTABLE. DEPB IS CASH ITA NO.2329/MUM/2011(A.Y. 2004-05) 9 ASSISTANCE RECEIVABLE BY A PERSON AGAINST EXPORTS UNDER THE SCHEME OF THE GOVERNMENT OF INDIA AND FALLS UNDER SECTION 28(IIIB ) OF THE ACT. ACCORDINGLY, DEPB IS CHARGEABLE TO INCOME TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION EVEN BEFORE IT IS TRANSFERRED BY THE TA XPAYER. UNDER SECTION 28(IIID) OF THE ACT, ANY PROFIT ON TRANSFER OF DEPB IS CHARGEABLE T O INCOME TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION AS AN ITEM SEPARATE FROM CASH ASSISTANCE UNDER SECTION 28(IIIB) OF THE ACT. THE F ACE VALUE OF THE DEPB WILL FALL UNDER SECTION 28(IIIB) OF THE ACT, THE DIFFERENCE B ETWEEN THE SALE VALUE AND THE FACE VALUE OF THE DEPB WILL FALL UNDER SECTION 28(IIID) OF THE ACT. THE COST OF ACQUIRING DEPB IS NOT NIL BECAUSE THE PERSON ACQUIRES IT BY P AYING CUSTOMS DUTY ON THE IMPORT CONTENT OF THE EXPORT PRODUCT AND THE DEPB WHICH AC CRUES TO A PERSON AGAINST EXPORTS HAS A COST ELEMENT IN IT. ACCORDINGLY, WE D IRECT THE ASSESSING OFFICER TO MAKE ASSESSMENT A FRESH ON THIS ISSUE IN VIEW OF TH E LAW LAID DOWN BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF VIJAYA SILK HOUSE (BANGALORE) (SUPRA) AND FURTHER, IF NEED BE, AS PER THE LAW LAID DOWN BY HO N'BLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS (SUPRA). GROUND NO.6: 6. VIDE GROUND NO.6 THE ASSESSEE HAS AGITATED THE L EVY OF INTEREST UNDER SECTION 234B, 234C AND 220(2) OF THE ACT. THE ASSESSEE HAS PLEADED THAT AS PER CBDT CIRCULAR NO. 2/2006 DATED 17/1/2006 NO INTEREST SHO ULD HAVE BEEN CHARGED FROM THE ASSESSEE. THIS GROUND BEING CONSEQUENTIAL DOES NOT REQUIRE ANY SPECIFIC ITA NO.2329/MUM/2011(A.Y. 2004-05) 10 ADJUDICATION. HOWEVER, WE DIRECT THAT THE AO WILL TAKE INTO CONSIDERATION THE SAID CIRCULAR NO.2/2006 DATED 17/1/2006, IF ANY, INTERES T IS FOUND CHARGEABLE FROM THE ASSESSEE UNDER SECTION 234B, 234C AND 220(2) OF THE ACT. GROUND NO.7: GROUND NO.7 IS GENERAL IN NATURE, THEREFORE, DOES N OT REQUIRE ANY ADJUDICATION. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 /01/ 2015 . % )* + ,'- 23 /01/2015 ) % SD/- SD/- (R.C.SHARMA) (SANJAY GARG) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; ,' DATED 23/01/2015 % %% % .&/ .&/ .&/ .&/ 0/*& 0/*& 0/*& 0/*& / COPY OF THE ORDER FORWARDED TO : 1. #1 / THE APPELLANT 2. .2#1 / THE RESPONDENT. 3. 3 ( ) / THE CIT(A)- 4. 3 / CIT 5. /4 .&' , , / DR, ITAT, MUMBAI 6. 5 6 / GUARD FILE. ' ' ' ' / BY ORDER, 2/& .& //TRUE COPY// 7 77 7 / 8 8 8 8 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . SR. PS-VM