The DCIT, Anand Circle, Ahmedabad V. M/s. K.Ratilal Chandulal & Sons, Dist.Anand

ITA 2529/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8798 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 15-03-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 08-06-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH SRDR
• Keywords: Depreciation; Set aside
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI A.N.PHAUJA, ACCOUNTANT MEMBER ITA NO.2529/AHD/2007 ASSESSMENT YEAR:2003-04 DATE OF HEARING:16.3.10 DRAFTED:18.3.10 DEPUTY COMMISSIONER OF INCOME-TAX, ANAND CIRCLE, ANAND V/S. M/S. K. RATILAL CHANDULAL & SONS, APPROACH ROAD, VASAD, DIST. ANAND PAN NO.AADFK3725B (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SMT. NEETA SHAH, SR-DR RESPONDENT BY:- SHRI BENDISH SOPARKAR, AR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE O RDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-IV, BARODA IN APPEAL NO. CAB/IV -A-117/06-07 DATED 24-03- 2007. THE ASSESSMENT WAS FRAMED BY THE ITO, WARD-4 ANAND, U/S.143 (3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE HIS ORDER DATED 28-03- 2006 FOR THE ASSESSMENT YEAR 2003-04. 2. THE FIRST ISSUE IN THIS APPEAL OF THE REVENUE IS AGAINST THE ORDER OF CIT(A) IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S. 80HHC OF THE ACT. FOR THIS, REVENUE HAS RAISED THE FOLLOWING GROUND NO.1 :- 1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S.80HC OF RS.4,92,251/- DESPITE THE FACT THAT THE ASSESSEE ALLOCATED ENTIRE COST TOWARD S TUR DAL (MAIN PRODUCT EXPORTED) AND CONSEQUENTLY THERE IS NO EXPORT PROFI T EARNED BY THE ASSESSEE DURING THE YEAR. ITA 2529/AHD/2007 A.Y.2003-04 DCIT, ANAND CIR V. M/S. K.R. CHANDULAL & SONS PAGE 2 3. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE STATE D THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE IN ASSESSEES OWN CASE IN ITA NO.3944/AHD/2004 DATED 30-10-2009 FOR ASSESSMENT YEAR 2001-02, THE FACTS BEING EXACTLY IDENTICAL, THE TRIBUNAL VIDE PARA-9 HAS DECIDED AS UNDER:- 9. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT THE AO HIMSELF ACCEPTED THE METHOD ADO PTED BY THE ASSESSEE IN THE AY 1998-99 IN ATTRIBUTING COST TO PROCESS RESID UE SOLD IN DOMESTIC MARKET NAMELY TOOR CHUNI. SINCE TOOR CHUNNY IS BEING SOLD IN THE MARKET, IT CAN NOT BE ACCEPTED THAT THE ASSESSEE PRODUCED THE SAID CHU NNY WITHOUT INCURRING ANY COST. CONSIDERING THE FACTS AND CIRCUMSTANCES O F THE CASE, WE DO NOT FIND ANY MISTAKE IN THE APPROACH OF THE LD. CIT(A) IN AC CEPTING THE PLEA OF THE ASSESSEE IN ALLOCATING COST ON TURNOVER BASIS. THER E BEING NO MATERIAL BEFORE US TO TAKE A DIFFERENT VIEW IN THE MATER, WE ARE NO T INCLINED TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). ACCORDINGLY, GROUND NO. 2 IS DISMISSED. THE FACTS BEING EXACTLY IDENTICAL IN THIS YEAR ALSO , RESPECTFULLY FOLLOWING THE TRIBUNALS DECISION IN ASSESSEES OWN CASE ITA NO.3944/AHD/2004 (SUPRA), WE CONFIRM THE ORDER OF CIT(A) AND THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 4. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) IN ALLOWING DEPRECIATION ON WDV AS COMPUTED AS ON 31-0 3-2002. FOR THIS, REVENUE HAS RAISED THE FOLLOWING GROUND NO.2 :- 2) THE LD./ CIT(A) HAS ERRED IN LAW AND ON FACTS I N DIRECTING THE ASSESSING OFFICER TO ALLOW DEPRECIATION ON W.D.V. AS COMPUTED FOR A.Y. 2002-003 AFTER GIVING EFFECT TO THE CIT(A)S ORDER DESPITE THE FAC T THAT THE A.O HAS RIGHTLY CALCULATED DEPRECIATION AFTER CONSIDERING COST PRIC E OF FACTORY BUILDING, PROPORTIONATE STAMP PAPER & REGISTRATION EXPENSES A ND COST OF ADDITIONS TO THE FACTORY BUILDING AS PER PROVISIONS OF THE ACT A ND HAS RIGHTLY DISALLOWED EXCESS CLAIM OF DEPRECIATION OF RS.1,64,735/-. 5. AFTER HEARING BOTH SIDES, LD. COUNSEL FOR THE AS SESSEE STATED THAT THIS ISSUE IS ALSO COVERED BY THE TRIBUNALS DECISION AND FACTS B EING EXACTLY IDENTICAL, THE TRIBUNAL VIDE PARA-5 AS UNDER:- 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT THERE IS NO DISCUSSION REGARDING THE M ARKET VALUE AS PER JANTRY VALUATION OF THE LAND IN THE SAME SURVEY PREVAILING IN FY 2000-01 IN THE ASSESSMENT ORDER NOR A COPY OF PURCHASE DEED OF LAN D, FACTORY BUILDING AND MACHINERY OR BASIS FOR ARRIVING AT THE VALUE OF 20 LACS FOR THE LAND, BUILDING AND MACHINERY HAS BEEN PACED BEFORE US. THE LD. CIT (A) WITHOUT HAVING ANY INDEPENDENT ENQUIRY INTO THE BASIS OF VALUATION OF LAND AND BUILDING, HAS SIMPLY ACCEPTED THE ASSESSEES SUBMISSIONS AND HAS HAVE RECORDED ANY FINDINGS THAT THE VALUE OF LAND ARRIVED AT BY THE A SSESSEE WAS JUST AND FAIR, KEEPING IN VIEW THE MARKET VALUE PREVAILING IN THE AREA. IN THESE CIRCUMSTANCES, WE CONSIDER IT FAIR AND PROPER TO VA CATE THE FINDINGS OF THE ITA 2529/AHD/2007 A.Y.2003-04 DCIT, ANAND CIR V. M/S. K.R. CHANDULAL & SONS PAGE 3 LEARNED CIT(A) AND RESTORE THE MATTER TO THE FILE O F THE AO WITH THE DIRECTIONS TO ASCERTAIN THE VALUE OF THE LAND THROUGH INDEPEND ENT INQUIRIES OR OTHERWISE, KEEPING IN VIEW THE BASIS FOR ARRIVING AT THE FIGUR E OF RS.20 LACS AND THEREAFTER, ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW AFTER A LLOWING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. WITH THESE DIRECTIONS GROUND NO.1 IN THE APPEAL OF THE REVENUE IS DISPOSED OF. THE FACTS BEING EXACTLY IDENTICAL IN THIS YEAR ALSO , RESPECTFULLY FOLLOWING THE TRIBUNALS DECISION IN ASSESSEES OWN CASE ITA NO.3944/AHD/2004 (SUPRA), WE ALSO SET ASIDE THIS ISSUE TO THE FILE OF ASSESSING OFFICER EXACTLY ON SIMILAR LINES AND ACCORDINGLY, THIS ISSUE OF THE REVENUES APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. 6. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOWED A S INDICATED ABOVE. ORDER PRONOUNCED IN OPEN COURT ON 16/03/2010 SD/- SD/- (A.N.PHAUJA) (MAHAVIR SI NGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 16/03/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-IV,BARODA 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD