Madhusudan International, Surat V. The Dy.CIT., Circle-2, Surat

ITA 2605/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9188 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-03-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 20-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Section: 80HHC; 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, A HMEDABAD , (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M.) ( , !'# $ , ! %& ) ITA NOS. 2511 & 2512/AHD/2011 (ASSESSMENT YEAR: 2 000-01 & 2001-02) DY. COMMISSIONER OF INCOME- TAX, CIRCLE-2, ROOM NO.110, 1 ST FLOOR, AYAKAR BHAVAN, MAJURAGATE, SURAT - 395001 VS. M/S. MADHUSUDAN INTERNATIONAL, 2 ND FLOOR, KAJIWALA COMPLEX, NR. KINNERY CINEMA, RING ROAD, SURAT (APPELLANT) (RESPONDENT) & ITA NOS. 2604 & 2605/AHD/2011 (ASSESSMENT YEAR: 2 000-01 & 2001-02) M/S. MADHUSUDAN INTERNATIONAL, 2 ND FLOOR, KAJIWALA COMPLEX, NR. KINNERY CINEMA, RING ROAD, SURAT VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE-2, ROOM NO.110, 1 ST FLOOR, AYAKAR BHAVAN, MAJURAGATE, SURAT - 395001 PAN NO. AAEFM2037K (APPELLANT) (RESPONDENT) REVENUE BY : SMT. SONIA KUMAR, SR. D.R ASSESSEE BY : SHRI HARDIK VORA, A.R. DATE OF HEARING : 09 -03-2 016 DATE OF PRONOUNCEMENT : 11 -03-2016 ITA NOS.2511, 2512, 2604 & 2605/AHD/11 A.Y. 2000-01 & 01-02 (M/S. MADHUSUDAN INTERNATIONAL) 2 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THESE FOUR APPEALS, OF WHICH TWO ARE FILED BY REVEN UE AND THE OTHER TWO BY ASSESSEE, ARE AGAINST THE ORDER OF CIT(A)-II, SURAT , DATED 18.07.2011 FOR THE ASSESSMENT YEARS 2000-01 & 2001-02. 2. BEFORE US, AT THE OUTSET, LD. A.R. SUBMITTED THA T THOUGH THE ALL APPEALS PERTAIN TO SAME ASSESSEE FOR TWO ASSESSMENT YEARS A ND ISSUES ARE ALSO IDENTICAL, THEREFORE THE SUBMISSION MADE BY HIM ON THE COMMON ISSUES, WOULD BE APPLICABLE TO ALL APPEALS. LD. D.R. DID NOT OBJECT TO THE AFO RESAID SUBMISSION OF LD. A.R. WE, THEREFORE, FOR THE SAKE OF CONVENIENCE PROCEED TO DISPOSE OF BOTH THE APPEALS AND CROSS APPEALS BY A COMMON ORDER AND PROCEED WIT H THE FACTS FOR A.Y. 2000- 01. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 4. ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGA GED IN THE BUSINESS OF EXPORT AND SALES OF TEXTILES GOODS VIZ. ART SILK FABRICS. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2000-01 ON 25.10.2000 DECLARING TOTAL INCO ME AT RS.2,50,676/- AFTER CLAIMING DEDUCTION OF RS.3,38,95,054/- U/S.80HHC OF THE ACT. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER, ASSESSMENT WA S FRAMED U/S.143(3) OF THE ACT VIDE ORDER DATED 29.10.2002 AND THE TOTAL INCOME WA S DETERMINED AT RS. 10,82,910/-. THEREAFTER, ORIGINAL ASSESSMENT WAS R E-OPENED BY ISSUING NOTICES U/S.148 OF THE ACT AND THEREAFTER RE-ASSESSMENT ORD ER WAS PASSED U/S.143(3) R.W.S. 147 OF THE ACT ON 27.12.2007, WHEREIN THE ENTIRE CL AIM OF DEDUCTION U/S.80HHC WAS DISALLOWED. AGGRIEVED BY THE ORDER OF A.O., AS SESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) WHO VIDE ORDER DATED 10.09.2008 DISM ISSED THE APPEAL OF THE ITA NOS.2511, 2512, 2604 & 2605/AHD/11 A.Y. 2000-01 & 01-02 (M/S. MADHUSUDAN INTERNATIONAL) 3 ASSESSEE. THEREAFTER, ASSESSEE PREFERRED APPEAL BE FORE THE HONBLE TRIBUNAL IN ITA NO.4053/AHD/2006 VIDE ORDER DATED 09.10.2009, W HO SET ASIDE THE ORDER TO THE FILE OF A.O. WITH DIRECTION TO RE-COMPUTE THE D EDUCTION U/S.80HHC OF THE ACT IN ACCORDANCE WITH THE DECISION OF SPECIAL BENCH OF MUMBAI IN CASE OF TOPMAN EXPORT VS. ITO (2009) 125 TTJ (MUM) (SB) 289. PURS UANT TO THE DIRECTIONS OF TRIBUNAL, ASSESSMENT WAS FRAMED U/S.143(3) R.W.S. 2 54 OF THE ACT VIDE ORDER DATED 31.12.2010 AND THE TOTAL INCOME WAS DETERMINED AT R S.3,38,95,054/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER B EFORE THE LD. CIT(A) WHO VIDE ORDER DATED 18.07.2011 GRANTED PARTIAL RELIEF TO TH E ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE AND REVENUE ARE NOW IN APPEAL BEFORE US AND HAVE RAISED FOLLOWING GROUNDS: REVENUES APPEAL IN ITA NO. 2511/AHD/2011 (A.Y. 200 0-01) [1] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A)-II, SURAT HAS ERRED IN ALLOWING DEDUCTION U/S. 80HHC OF THE I T. ACT OF RS. 1,52,66,345/- FOR THE A.Y. 2000-2001 & RS.55,77,367/- FOR THE A.Y . 2001-02 BEING EXPORT PROFIT AND EXPORT INCENTIVE IN THE FORM OF EXCISE DUTY AND MODVAT CREDIT. [2] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A)-II, SURAT HAS ERRED IN CONSIDERING THE REFUND OF EXCISE DUTY AND MODVAT CREDIT AS EXPORT INCENTIVE ELIGIBLE FOR DEDUCTION U/S. 80HHC OF THE I.T. ACT. ASSESSEES APPEAL IN ITA NO. 2604/AHD/2011 (A.Y. 20 00-01) 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, TH E ID. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE ACTION OF THE AO IN NOT APPRECIATING THE FACT - - THAT THE IMPUGNED ASSESSMENT PROCEEDINGS WERE SET -ASIDE PROCEEDINGS WITH SPECIFIC DIRECTIONS OF THE HON'BLE ITAT TO COMPUTE THE DEDUC TION U/S. 80HHC IN THE CASE OF THE APPELLANT IN ACCORDANCE WITH THE DECISION OF THE HO N'BLE MUMBAI SPECIAL BENCH OF THE ITAT IN THE CASE OF TOPMAN EXPORTS VS. ITO (2009) 1 25 TTJ (MUM) (SB) 289 - AND THUS, THE AO WAS BOUND TO FOLLOW THE SAID OR DER OF THE HON'BLE ITAT AND THE SUBSEQUENT DECISIONS OF THE HON'BLE BOMBAY HIGH COU RT OR THE ITAT IN OTHER CASES COULD NOT HAVE BEEN APPLIED AT THE STAGE OF SET-ASI DE ASSESSMENT PROCEEDINGS, ITA NOS.2511, 2512, 2604 & 2605/AHD/11 A.Y. 2000-01 & 01-02 (M/S. MADHUSUDAN INTERNATIONAL) 4 - MORE PARTICULARLY WHEN THE DEPARTMENT WAS ALREADY IN APPEAL U/S. 260A BEFORE THE HON'BLE HIGH COURT OF GUJARAT AGAINST THE SAID ORDE R OF THE HON'BLE ITAT IN THE CASE OF THE APPELLANT ITSELF, WHICH IS PENDING AS ON DATE. HENCE, IT IS MOST HUMBLY SUBMITTED THAT ON THE PRIN CIPLES OF JUDICIAL DISCIPLINE, THE DEDUCTION U/S. 80HHC MAY KINDLY BE GRANTED TO THE APPELLANT A S PER THE DIRECTIONS GIVEN BY THE HON'BLE ITAT IN THE APPELLANT'S OWN CASE FOR THE SUBJECT AS SESSMENT YEAR THEREBY FOLLOWING THE DIRECT DECISION IN THE CASE OF DCIT VS. JINDAL WORLDWIDE L TD. IN ITA NO. 4238/AHD/2007 VIDE ORDER DATED 17-09-2010. 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS GROSSLY ERRED IN ALLOWING THE APPELLANT DEDUCTION U/S. 80HHC ONLY TO THE EXTENT OF RS. 1,52,66,345/- AS AGAINST RS. 3,14,33,154/- LAWFULLY ALLOWABLE TO IT UNDER TH E ACT AND HENCE, IT IS MOST HUMBLY SUBMITTED THAT THE APPELLANT MAY KINDLY BE ALLOWED THE ENTIRE DEDUCTION U/S. 80HHC AT RS.3,14,33,154/-. 3. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE PARTIAL DISALLOWANCE OF DEDUCTION U/S . 80HHC OF THE ACT AS MADE BY THE AO, WITHOUT APPRECIATING (A) THAT THE TAXATION LAWS (AMENDMENT) ACT, 2005 MA KES UNDUE DISTINCTION BETWEEN EXPORTERS ON THE BASIS OF TURNOVER AND AMENDS THE L AW, BY LAYING DOWN VARIOUS CONDITIONS, ON A RETROSPECTIVE BASIS, WHICH IS UNCO NSTITUTIONAL AND ULTRA-VIRES, REQUIRING OUTRIGHT ANNULMENT. (B) THAT THE AMOUNT OF DEPB LICENSE RECEIVED BY THE APPELLANT IS NOTHING BUT REIMBURSEMENT OF COST OF DUTIES SUFFERED BY THE INP UTS AND THUS, THE SAME SHOULD BE REDUCED FROM THE COST OF GOODS SOLD AND THE PROFIT SO ARRIVED SHOULD BE TREATED AS DERIVED FROM EXPORTS, BEING FULLY ELIGIBLE FOR DEDU CTION U/S. 80HHC OF THE ACT. (C) THAT EVEN OTHERWISE AS PER SECTION 28(IIID) TH E ENTIRE AMOUNT OF SALES PROCEEDS OF DEPB CANNOT BE REDUCED FROM THE PROFIT OF THE BUSINESS B UT ONLY THE AMOUNT OF PROFIT (PREMIUM) ON SALE THEREOF NEEDS TO BE REDUCED FOR T HE PURPOSE OF COMPUTING THE DEDUCTION U/S. 80HHC OF THE ACT. ALL THE AFORESAID SUB-GROUNDS FROM (A) TO (C) REGAR DING PARTIAL DISALLOWANCE OF DEDUCTION U/S. 80HHC OF THE ACT ARE INDEPENDENT TO EACH OTHER. HENCE, IT IS MOST HUMBLY SUBMITTED THAT THE DEDUCTI ON UNDER SECTION 80HHC AS COMPUTED BY THE APPELLANT MAY KINDLY BE ALLOWED. 6. BEFORE US, AT THE VERY OUTSET, LD. A.R. SUBMITTE D THAT ASSESSEE HAD CARRIED THE MATTER BEFORE THE HONBLE GUJARAT HIGH COURT. HONBLE GUJARAT HIGH COURT IN TAX APPEAL NO.11086/2006, ORDER DATED 02.07.2012 GR ANTED RELIEF TO THE ASSESSEE AND PURSUANT TO WHICH, A.O. VIDE ORDER DATED 31.10 .2012 HAS PASSED ORDER GIVING EFFECT TO THE ORDER OF HONBLE GUJARAT HIGH COURT F OR A.YS. 2000-01 & 2001-02. ITA NOS.2511, 2512, 2604 & 2605/AHD/11 A.Y. 2000-01 & 01-02 (M/S. MADHUSUDAN INTERNATIONAL) 5 HE, THEREFORE, SUBMITTED THAT SINCE THE RELIEFS SOU GHT BY THE ASSESSEE, IN THE TWO APPEALS FOR A.YS. 2000-01 & 2001-02 HAVE ALREADY BE EN GRANTED TO THE ASSESSEE BY THE DEPARTMENT BY FOLLOWING HONBLE HIGH COURTS ORDER IT WANTS TO WITHDRAW ITS APPEALS AND THAT IN VIEW OF THE HONBLE HIGH CO URTS DECISION AND THE CONSEQUENTIAL ORDER PASSED BY THE DEPARTMENT, THE D EPARTMENTS APPEALS ALSO BECOMES INFRUCTUOUS. HE PLACED ON RECORD THE ORDER GIVING EFFECT DATED 31.10.2012 FOR A.Y. 2000-01 AND DATED 22.11.2012 FO R A.Y. 2001-02. HE THEREFORE SUBMITTED THAT APPEAL OF REVENUE BE DISMI SSED AS BEING INFRUCTUOUS AND THE APPEALS OF ASSESSEE BE TREATED AS WITHDRAWN. B EFORE US, LD. D.R. DID NOT OBJECT TO THE SUBMISSIONS MADE BY LD. A.R. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN VIEW OF THE AFORESAID SUBMISSIONS MADE BY BOTH THE PARTIES BEFORE US, THE APPEALS OF ASSESSEE AND REVENUE FOR BOTH THE YEARS ARE DISM ISSED . 8. IN THE RESULT, ALL THE APPEALS OF ASSESSEE AND REVENUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 11 - 03 - 2016. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 11/03/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD