Indian Sugar Exim Corporatio. Ltd, V. DCIT Circle 11 (1),

ITA 262/DEL/2008

• Counselvise Citation: 26220114 RSA 2008
• Duration Of Justice: 6 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 10-09-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 29-01-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH SENIOR
• Assessee Lawyers: RAKESH GUPTA SENIOR
• Keywords: Opportunity of being heard
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.262/DEL./2008 (ASSESSMENT YEAR : 2004-05) INDIAN SUGAR EXIM CORPORATION LTD., VS. DCIT, CIRC LE 11 (1), C BLOCK, 2 ND FLOOR, NEW DELHI. ANSAL PLAZA, AUGUST KRANTI MARG, NEW DELHI 110 049. (PAN : AAACI1163M) ITA NO.407/DEL./2006 (ASSESSMENT YEAR : 2002-03) ACIT, CIRCLE 11 (1), VS. INDIAN SUGAR EXIM CORPORAT ION LTD., NEW DELHI. C BLOCK, 2 ND FLOOR, ANSAL PLAZA, AUGUST KRANTI MARG, NEW DELHI 110 049. (PAN : AAACI1163M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAKESH GUPTA, SENIOR ADVOCATE A ND SHRI ROHAN KHARE, ADVOCATE REVENUE BY : SHRI SATPAL SINGH, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : IN THESE CASES, BOTH THE APPEALS WERE DISPOSED OF BY EARLIER ORDER OF ITAT DATED 29.04.2011. THE GROUNDS RAISED IN THIS APPEAL WITH REGARD TO THE DISALLOWANCE OF DEDUCTION U/S 80HHC ON ACCOUNT OF SALE OF ITA NO.262/DEL/2008 ITA NO.407/DEL/2006 2 DEPB/DFRC WERE DISPOSED OFF. THE RELEVANT PARAS AR E 22 TO 24 WHICH IS REPRODUCED AS UNDER :- 22. WE HAVE HARD BOTH THE PARTIES AND GONE THROUG H THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THIS ISS UE IS COVERED BY THE DECISION OF HON'BLE BOMBAY HIGH COUR T IN THE CASE OF CIT VS KALPATARU COLOUR & CHEMICALS VS CIT 328 ITR 451. IN THIS CASE, HON'BLE BOMBAY HIGH COUR T HAS HELD THAT THE AMOUNT RECEIVED ON TRANSFER OF DEPB C REDIT INCLUDING THE FACE VALUE OF THE DEPB CREDIT WOULD CONSTITUTE PROFITS OF BUSINESS UNDER SECTION 28(III D) OF THE ACT AND, THEREFORE, THE ENTIRE AMOUNT OF DEPB RECEI VED HAS TO BE EXCLUDED UNDER CLAUSE (BAA) OF EXPLANATION TO SECTION 80-HHC OF THE ACT. HON'BLE HIGH COURT WHILE ARRIVIN G AT THIS DECISION OBSERVED THAT WHEN SECTION 28(IIID) S PECIFICALLY DEALS WITH PROFITS REALIZED ON TRANSFER OF DEPB CRE DIT, IT WOULD BE IMPERMISSIBLE AS A MATTER OF FIRST PRINCIP LE TO BIFURCATE THE FACE VALUE OF THE DEPB AND THE AMOUNT RECEIVED IN EXCESS OF FACE VALUE OF DEPB. SINCE THE ISSUE IS NOW COVERED BY THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS KALPATARU COLOURS & CHEMICALS (SUPRA ) WE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OF FICER TO DECIDE THE ISSUE IN THE LIGHT OF THE DECISION OF HO N'BLE BOMBAY HIGH COURT IN THE CASE OF KALPATARU COLORS & CHEMICALS (SUPRA). 23. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 24. NOW, WE TAKE UP THE APPEALS FOR THE ASSESSMENT YEAR 2004-05. THE 1ST ISSUE FOR CONSIDERATION IN AS SESSEES APPEAL RELATES TO SUSTENANCE OF DISALLOWANCE OF DED UCTION U/S 80HHC OF RS.3,65,84,950/- ON ACCOUNT OF SALE OF DEPB/DFRC. IN ASSESSMENT YEAR 2002-03, WE HAVE SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFIC ER WITH THE DIRECTION TO DECIDE THE ISSUE IN THE LIGHT OF THE D ECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF KALPATARU COLOUR & CHEMICALS 328 ITR 451. SINCE THE ISSUE IN ASSESSMENT YEAR 2004-05 IS IDENTICAL TO ISSUE IN ASSESSMENT YEAR 2002-03, WE RESTORE THIS ISSUE TO T HE FILE OF THE ASSESSING OFFICER WITH THE SIMILAR DIRECTIONS. ITA NO.262/DEL/2008 ITA NO.407/DEL/2006 3 LATER ON, THE ASSESSEE HAS FILED MISC. APPLICATIONS FOR RECALLING OF THE ORDER ON ACCOUNT OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF M/S. TOPMAN EXPORTS VS. CIT, REPORTED IN 342 ITR 49 , ON THIS ISSUE WHEREIN THE DECISION OF HONBLE BOMBAY HIGH COURT I N THE CASE OF CIT VS. KALPTARU COLOURS AND CHEMICALS, 328 ITR 451, WA S REVERSED. THE ITAT RECALLED THE DECISION BY HOLDING THAT THERE IS A MISTAKE APPARENT ON RECORD IN THE ORDER OF THE ITAT WHICH REQUIRES RECT IFICATION. THE RELEVANT PARA OF ORDER OF ITAT IN MA NO.90/DEL/2013 IN ITA N O.262/DEL/2008 AND MA NO.91/DEL/2013 IN ITA NO.407/DEL/2006 READ A S UNDER :- 3. AS ADMITTEDLY THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF CIT VS. KALPATARU COLOURS AND CHEMICALS (SUPRA), WHICH WAS APPLIED BY THE TRIBUNA L IN THE IMPUGNED ORDER, WAS REVERSED BY HON'BLE SUPREME COU RT IN THE CASE OF M/S. TOPMAN EXPORTS VS. CIT (SUPRA), WE HOLD THAT THERE IS A MISTAKE APPARENT ON RECORD IN THE O RDER OF THE TRIBUNAL REQUIRING RECTIFICATION. HENCE, WE RECALL THE IMPUGNED ORDER OF THE TRIBUNAL TO THE LIMITED EXTEN T OF COMPUTATION OF DEDUCTION U/S 80HHC OF THE ACT WITH RESPECT TO SALE OF DEPB LICENSE, AND ALLOW THE MAS OF THE ASSESSEE. 2. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THI S ISSUE IS TO BE RECONSIDERED BY THE ASSESSING OFFICER IN VIEW OF TH E DECISION OF HON'BLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS, CITED SUPRA. CONSIDERING ALL THESE ASPECTS, WE RESTORE THIS ISSUE TO THE FIL E OF THE ASSESSING OFFICER TO BE DECIDED AS PER LAW, AFTER PROVIDING AN OPPORT UNITY OF BEING HEARD TO ITA NO.262/DEL/2008 ITA NO.407/DEL/2006 4 THE ASSESSEE. THE ASSESSING OFFICER SHALL NOT BE B OUND WITH EARLIER DECISION OF ITAT WHICH HAS BEEN RECALLED. 2.1 WE WOULD ALSO LIKE TO STATE THAT THE LD. AR HAS TRIED TO DISTINGUISH THE FACTS OF THE CASE OF THE ASSESSEE WITH REGARD T O THE FACTS OF THE CASE OF CIT VS. KALPTARU COLOUR & CHEMICALS REPORTED IN 328 ITR 451 AND TOPMAN EXPORTS VS. CIT REPORTED IN 318 ITR 87 DATED 11.02.2012 ON ACCOUNT OF THAT THE METHOD OF CALCULATION OF DEDUCT ION U/S 80HHC IN THE CASE OF MANUFACTURER EXPORTER AND TRADING EXPORTER IS DIFFERENT AND ASSESSEE IS A TRADING EXPORTERS. WE WOULD LIKE TO MAKE IT VERY CLEAR THAT THE EARLIER ORDER OF ITAT HAS BEEN RECALLED KEEPING IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF TO PMAN EXPORTS, THEREFORE AT THIS STAGE, WE SHALL NOT BE ABLE TO CO NSIDER ANY SUCH PLEA OF THE ASSESSEE. ON THIS COUNT ALSO, WE FEEL IT APPRO PRIATE TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED DE NOVO AFTER PROVING AN OPPORTUNITY OF BEING HEARD. 3. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE AND REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 15 TH DAY OF SEPTEMBER, 2014. SD/- SD/- (I.C. SUDHIR) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 15 TH DAY OF SEPTEMBER, 2014 TS ITA NO.262/DEL/2008 ITA NO.407/DEL/2006 5 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XIV, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT