The ITO, Ward-3(1), JAMNAGAR V. M/s. Dhanani Cycle Valve Manufacturers, JAMNAGAR

ITA 262/RJT/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5912 (ITAT-RAJKOT)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 1994-1995
• Appeal Filed On: 31-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR J B JHAVERI

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM AND SHRI B. R. JAIN, A M ITA NO. 262/RJT/2013 / ASSESSMENT YEAR : 1994-95 INCOME-TAX OFFICER, WARD-3(1), JAMNAGAR ( / APPELLANT) M/S. DHANANI CYCLE VALVE MANUFACTURERS, 20, PREMCHAND COLONY, JAMNAGAR PAN : AABFD 5324 P / RESPONDENT ! '# / REVENUE BY DR. J. B. JHAVERI, DR $% ! '# / ASSESSEE BY NONE ' & ' %( / DATE OF HEARING 01.01.2014 ) %( / DATE OF PRONOUNCEMENT 03.01.2014 / ORDER .. , / T. K. SHARMA, J. M.: THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 19.03.2013 OF LD. CIT(A), J AMNAGAR FOR THE ASSESSMENT YEAR 1994-95. 2. THE FACTS, IN BRIEF, ARE THAT ON 31.03.2008 THE ASSESSING OFFICER GAVE EFFECT TO THE ITATS ORDER IN ITA NO.299 & 300/RJT/2005 DATED 07. 03.2007. IN THE SAID ORDER THE ASSESSING OFFICER REPEATED THE SAME COMPUTATION OF INCOME INCLUDING COMPUTATION OF DEDUCTION U/S 80HHC(3) OF THE INCOME-TAX ACT WHICH WAS MADE BY HIM FOR THE PURPOSE OF GIVING EFFECT TO THE ORDER OF THE CIT(A) AND THE REBY, HE HAS IGNORED THE DIRECTION OF THE ITAT, SPECIFICALLY WITH RESPECT TO THE ASSESSEE S CLAIM OF ALLOWANCE OF 10% DUTY DRAW BACK OUT OF INDIRECT EXPENSES FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S 80HHC(3). ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO COMPLY WITH THE ITATS DIRECTIONS AND PA SS A CONSEQUENTIAL ORDER BY ADDRESSING THE ISSUE RAISED BY THE TRIBUNAL IN SPEA KING MANNER SO AS TO GIVE PROPER EFFECT TO THE ORDER OF ITAT. AGGRIEVED BY THE DIRE CTION OF LD. CIT(A) IN THE IMPUGNED ORDER, THE REVENUE IS NOW IN APPEAL BEFORE THIS TRI BUNAL ON THE FOLLOWING GROUNDS:- 262-RJT-2013 - DHANANI CYCLE VALVE MANUFACTURERS 2 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOL DING THAT THE AO HAS NOT COMPLIED WITH THE DIRECTIONS OF THE ITAT WHILE GIVI NG EFFECT TO THE ORDER OF THE ITAT. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT THE AO HAD IN FACT GIVEN EFFECT TO THE ORDER OF THE ITAT AFTER CONSIDERING THE JUDICIAL PRONOUNCEMENTS IN THE DECISIONS OF THE APP ELLATE AUTHORITIES ON WHICH THE ITAT HAD PLACED RELIANCE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. IT IS THEREFORE PRAYED THAT THE ORDER OF THE CIT (A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THAT THE REVENUE CRAVES LEAVE TO ADD, AMEND, ALT ER OR WITHDRAW ANY GROUNDS OF APPEAL. 3. AT THE TIME OF HEARING BEFORE US, NONE WAS PRESE NT FROM THE SIDE OF THE ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE POINT ED OUT THAT THE ASSESSING OFFICER HAS COMPLIED WITH THE DIRECTIONS OF THE ITAT WHILE GIVING EFFECT TO THE ORDER OF ITAT; THEREFORE, THERE WAS NO NECESSITY OF ISSUING FURTHE R DIRECTIONS IN THIS REGARD TO THE ASSESSING OFFICER. 4. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIV E, WE HAVE CAREFULLY GONE THROUGH THE ORDER OF LD. CIT(A). THE RELEVANT DISCU SSION IS CONTAINED IN PARAGRAPHS NO.7-9, WHICH READ AS UNDER:- 7. KEEPING THE AFORESAID DIRECTIONS OF ITAT IN VIE W, THE AO SHOULD HAVE EXAMINED THE CLAIM OF THE APPELLANT PERTAINING TO T HE 10% OF DUTY DRAW BACK AS DIRECT OVERHEAD EXPENSES FOR EARNING SUCH EXPORT IN CENTIVES BEFORE ASCERTAINING THE TOTAL INDIRECT COST ATTRIBUTABLE TO THE EXPORTS , IN THE LIGHT OF DECISION OF THE SPECIAL BENCH IN THE CASE OF SURENDRA ENGINEERING C ORPORATION AND DECISION ITAT OF RAJKOT IN THE CASE OF RANG INTERNATIONAL (S UPRA) AND SHOULD HAVE DECIDED TO WHAT EXTENT THE CLAIM OF DEDUCTION BY THE APPELL ANT WAS ALLOWABLE ON THE BASIS OF PROPORTIONATE EXPENDITURE. HOWEVER, FROM THE ORD ER PASSED BY THE AO IT APPEARS THAT THE AO HAS NOT AT ALL CONSIDERED THESE ASPECTS AND NOT COMPLIED WITH THE DIRECTIONS OF THE ITAT WHILE GIVING EFFECT TO THEIR ORDER. THEREFORE, THE GRIEVANCE OF THE APPELLANT IS GENUINE WHICH NEEDS T O BE ADDRESSED. THE AO SHOULD HAVE EXAMINED THE ISSUE IN THE LIGHT OF THE ABOVE DECISIONS AND ANY OTHER LATER DECISIONS, IF ANY, DELIVERED BY THE OTHER COU RTS AND THEN THROUGH A SPEAKING ORDER, SHOULD HAVE DECIDED WHETHER OR NOT TO ALLOW ANY INDIRECT EXPENSES ATTRIBUTABLE TO DUTY DRAW BACK OUT OF THE TOTAL IND IRECT EXPENDITURE ATTRIBUTABLE TO THE EXPORTS. HOWEVER, THE ORDER OF THE AO IS SILENT ON THIS ISSUE. 8. KEEPING THE ABOVE LACUNA IN THE ORDER PASSED BY THE AO AND THE SPECIFIC DIRECTIONS GIVEN BY THE ITAT ON THIS ISSUE, THE AO IS DIRECTED TO COMPLY WITH THE ITATS DIRECTIONS AND PASS A CONSEQUENTIAL ORDER BY ADDRESSING THE ABOVE ISSUE IN SPEAKING MANNER SO AS TO GIVE PROPER EFFECT TO T HE ORDER OF ITAT. 9. IN THE RESULT THE APPEAL STANDS ALLOWED. 262-RJT-2013 - DHANANI CYCLE VALVE MANUFACTURERS 3 FROM THE PERUSAL OF THE AFORESAID DIRECTIONS OF LD . CIT(A) IN THE IMPUGNED ORDER AS REPRODUCED BY US HEREINABOVE, WE ARE CONVINCED T HAT THE DIRECTIONS GIVEN BY THE LD. CIT(A) IN THIS REGARD ARE FAIR AND REASONABLE. WE, THEREFORE, DECLINE TO INTERFERE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- SD/- (B. R. JAIN) (T. K. SHARM A) #( '* / ACCOUNTANT MEMBER '* /JUDICIAL MEMBER *#+ ,*-/ ORDER DATE 03.01.2014 /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- INCOME-TAX OFFICER, WARD-3(1), JAMNAGA R 2. /RESPONDENT- M/S. DHANANI CYCLE VALVE MANUFACTURERS , 20, PREMCHAND COLONY, JAMNAGAR 3. '-2- % & 3% / CIT, JAMNAGAR 4. & 3%- / CIT(A), JAMNAGAR 5 . 678 % , , / DR, ITAT, RAJKOT 6 . 89 :; / GUARD FILE. *#+ '# / BY ORDER , TRUE COPY PRIVATE SECRETARY, , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.