S.M. Oveseas Pvt. Ltd., V. ACIT, Karnal Circle,

ITA 2580/DEL/2004

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52804 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-09-2011
• Assessment Year: 1995-1996
• Appeal Filed On: 28-05-2004
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS GEETMALA MOHANTY
• Assessee Lawyers: ROHIT JAIN
• Keywords: Period of limitation
• Section: 80HHC; 234B; 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A DELHI BEFORE SHRI I.P. BANSAL AND SHRI K.G. BANSAL ITA NO. 2580(DEL)/2004 ASSESSMENT YEAR: 1995-96 M/S S.M. OVERSEAS (P) LTD., ASS ISTANT COMMISSIONER OF MULTIROD HOUSE, VS. INCOME-TAX, KARNAL CIRCLE, KUNJPURA CROSSING, KARNAL. KA RNAL. (APPELLANT) (RESPON DENT) APPELLANT BY : SHRI ROHIT JAIN, ADVOCATE RESPONDENT BY: MRS. GEETMALA MOHANTY, CIT, DR DATE OF HEARING : 29.09.2011 DATE OF PRONOUNCEMENT : 07.10.2011. ORDER PER K.G. BANSAL : AM IN THIS APPEAL THE ASSESSEE HAD RAISED SEVEN GRO UNDS BEFORE THE TRIBUNAL. FIVE GROUNDS DEALT WITH MAKING THE ASSESSMENT U/S 147, ONE WITH COMPUTATION OF DEDUCTION U/S 80HHC AND ONE WITH CHARGING OF INTEREST UNDER SECTION 234B OF THE INCOME-TAX AC T, 1961. THE TRIBUNAL PASSED THE ORDER ON 16.1.2009, IN WHICH THE AS SESSMENT ORDER WAS QUASHED ON THE GROUND THAT THE PRE-CONDITIONS OF SECTION 147 HAVE NOT BEEN SATISFIED, THEREFORE, THE NOTICE U/S 148 IS INVAL ID. IN VIEW OF THIS FINDING, ITA NO. 2580(DEL)/2004 2 IT WAS NOT CONSIDERED NECESSARY TO DECIDE THE AP PEAL IN SO FAR AS THE MERITS OF THE CASE WERE CONCERNED. 2. THE REVENUE PREFERRED APPEAL BEFORE THE HON BLE HIGH COURT AND THE FOLLOWING QUESTIONS OF LAW WERE RAISED:- (I) WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE ITAT WAS RIGHT IN LAW IN QUASHING THE ASSESSMENT PROCEEDINGS REOPENED U/S 148OF THE ACT BY HOLDING THAT THE PR OCEEDINGS U/S 154 INITIATED AGAINST THE ASSESSEE WERE PENDI NG, WHEREAS, IN FACT, THE NOTICE U/S 154 HAVING BEEN ISSUED BE YOND THE PERIOD OF LIMITATION U/S 154(7) WAS NON-EST AND HENCE NO PROCEEDING U/S 154 WERE PENDING? (II) WHETHER THE ITAT WAS JUSTIFIED IN QUASHING THE R EASSESSMENT U/S 147/148 FOR A.Y. 1995-96 EVEN WHEN PROCEEDI NGS U/S 154 FOR THE SAME YEAR HAD BECOME NON-EST AND WHICH ALSO FIND SUPPORT FROM THE DECISION OF HONBLE ALLAHABAD H IGH COURT IN THE CASE OF G.P. AGGARWAL VS. ACIT, 208 ITR 795? 2.1 THE HONBLE HIGH COURT HELD THAT THE TRIBUNAL W AS IN ERROR IN HOLDING THAT THE PROCEEDINGS FOR REASSESSMENT WER E NOT PERMISSIBLE. ACCORDINGLY, THE QUESTIONS OF LAW WERE ANSWERED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. THE HONBLE COURT AL SO DIRECTED THE PARTIES TO APPEAR BEFORE THE TRIBUNAL FOR FURTHER PROCEEDING S ON 15.11.2010. ITA NO. 2580(DEL)/2004 3 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE HEARING OF THE APPEAL MAY BE BLOCKED FOR A PERIOD OF SIX MONTH S AS APPEAL HAS BEEN FILED BEFORE THE HONBLE SUPREME COURT FROM THE OR DER OF THE HONBLE HIGH COURT. HOWEVER, AFTER GRANTING ADJOURNMENT ON 15.02.2011 AND 07.04.2011, THE APPEAL WAS FINALLY HEARD ON 29.09. 2011. THE LD. COUNSEL WANTED TO RAISE THE ISSUES REGARDING VALIDITY O F NOTICE U/S 148 ALSO. HOWEVER, THIS ISSUE, IN SO FAR AS THE TRIBUNAL I S CONCERNED, STANDS DISPOSED BY THE ORDER OF HONBLE HIGH COURT DATE D 27.07.2010 IN ITA NO. 556 OF 2009 (SUPRA). IN VIEW OF THE DECISION OF THE HONBLE HIGH COURT, IT IS HELD THAT THERE IS NO FORCE IN THE G ROUNDS WHICH CHALLENGE THE VALIDITY OF NOTICE U/S 148. ACCORDINGLY, GROUN D NOS. 1,2, 4, 5 AND 6 RELATING TO THIS ISSUE ARE DISMISSED. 4. GROUND NO. 3 IS THAT THE DEDUCTION U/S 80HHC HAS BEEN RIGHTLY CLAIMED AND ALLOWED IN THE RETURN OF INCOME AND T HE ORDER OF PROCESSING MADE U/S 143(1)(A) ON 18.09.1996. IN OTHER WORDS , THE RE-COMPUTATION MADE IN THE ORDER OF ASSESSMENT PASSED U/S 14 7 ON 03.02.2003, REDUCING THE DEDUCTION TO RS. 13,13,700/-, IS NOT IN ACCORDANCE WITH LAW. THE FINDINGS OF THE LD. CIT(APPEALS) ARE THAT THE DEDUCTION IS ADMISSIBLE ONLY IF THE SALE PROCEEDS ARE BROUGHT INTO IND IA IN CONVERTIBLE FOREIGN ITA NO. 2580(DEL)/2004 4 EXCHANGE. IN THIS CASE, THE ASSESSEE HAD NOT BEEN ABLE TO BRING THE WHOLE OF FOREIGN EXCHANGE INTO INDIA AS THE AMOUNT OF RS. 47,29,225/- HAS BEEN WRITTEN OFF AS BAD DEBT IN THE SUBSEQUENT YEAR. THE PROVISION OF LAW ON THIS ISSUE IS CLEAR AND, THUS, THERE IS NO FORCE IN THE SUBMISSION THAT THE DEDUCTION SHOULD BE ALLOWED ON THE WHOLE OF THE AMOUNT OF SALE PROCEEDS IRRESPECTIVE OF THE FACT THAT THE AMOUNT MENTIONE D ABOVE HAS NOT BEEN BROUGHT INTO INDIA IN CONVERTIBLE FOREIGN EXCHANG E. THE LD. COUNSEL FOR THE ASSESSEE FAIRLY SUBMITTED THAT SINCE THE IMPUGNED AMOUNT HAS NOT BEEN BROUGHT INTO INDIA IN CONVERTIBLE FOREIGN E XCHANGE, AS IT HAS BEEN WRITTEN OFF AS BAD DEBT, THE ORDER OF THE LOWER A UTHORITY HAS TO BE UPHELD ON MERITS. ON THE OTHER HAND, THE LD. CIT, DR RELIE D ON THE ORDER OF THE LD. CIT(APPEALS). ON CONSIDERATION OF THE MERITS OF TH E CASE, WE FIND THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 80HH C IN RESPECT OF THE AMOUNT OF SALE PROCEEDS, WHICH HAVE NOT BEEN REPATRIATE D INTO INDIA IN CONVERTIBLE FOREIGN EXCHANGE. THEREFORE, THE DECISION OF LOW ER AUTHORITY IS RIGHT ON FACTS AND IN LAW. ACCORDINGLY, THIS GROUND IS DISMISSED. 5. THE GROUND REGARDING CHARGING OF INTEREST U/S 234B HAS NOT BEEN ARGUED BY THE LD. COUNSEL. THE INTEREST IS A MAN DATORY LEVY AND, THEREFORE, ITA NO. 2580(DEL)/2004 5 WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LOWE R AUTHORITIES. THUS, GROUND NO.7 IS ALSO DISMISSED. 6. IN THE RESULT, THE APPEAL IS DISMISSED. SD/- SD/- (I.P. BANSAL) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- M/S S.M. OVERSEAS (P) LTD., KARNAL. ACIT, KARNAL CIRCLE, KARNAL. CIT(A) CIT THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.