The ACIT, Circle 5, RAJKOT-GUJARAT V. M/s. G.M. Exports Pvt. Ltd., RAJKOT-GUJARAT

ITA 269/RJT/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56691 (ITAT-RAJKOT)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-09-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 13-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: MJ RANPURA
• Keywords: Set aside
• Section: 80HHC; 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI D.K. TYAGI (JM) AND SHRI A.L. GEHLOT (A M) I.T.A. NO.269/RJT/2011 (ASSESSMENT YEAR 2004-05) ACIT, CIR.5 VS M/S G.M. EXPORTS PVT LTD RAJKOT PARTH, 9-MANINAGAR MAVDI PLOT, RAJKOT PAN : AAACG7822K (APPELLANT) (RESPONDENT) DATE OF HEARING : 27-09-2011 DATE OF PRONOUNCEMENT : 30-09-2011 APPELLANT BY : SHRI MK SINGH RESPONDENT BY: SHRI MJ RANPURA O R D E R PER BENCH THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XXI, AHMEDABAD DATED 31-12-2010 FOR THE ASSESSMENT YEAR 2004-05. 2. THE SOLE EFFECTIVE GROUND RAISED IN THE APPEAL P ERTAINS TO COMPUTATION OF DEDUCTION U/S 80HHC, 80I(9) AND 80IB(13) OF THE ACT . THE ASSESSEE CLAIMED DEDUCTION U/S 80HHC AT RS.5,72,493 WHEREAS THE ASSE SSING OFFICER COMPUTED THE SAME AT RS. 26,870. 3. UPON HEARING THE PARTIES WE FIND THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISIO N OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF RELIABLE DYECHEM PVT LTD IT A NO.168/RJT/2011 DATED 09- ITA NO.269/RJT/2011 2 09-2011. THE TRIBUNAL BY FOLLOWING THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ASSOCIATED CAPSULES (P) LTD VS DCIT & ANR 332 ITR 42 (BOM) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE B Y OBSERVING AS UNDER: 3. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI AL AVAILABLE ON RECORD. THE LD.COUNSEL FOR THE ASSESS EE RELIED UPON THE JUDGMENT OF THE BOMBAY HIGH COURT IN THE C ASE OF ASSOCIATED CAPSULES (P) LTD VS DCIT & ANR 332 ITR 4 2 (BOM) WHEREIN IT HAS BEEN HELD THAT UNLESS IT IS SPECIFIC ALLY PROVIDED BY THE STATUTE, THE PROFITS OF THE BUSINESS FOR THE PURPOSE OF S.80HHC CANNOT BE REDUCED BY ANY AMOUNT SAVE AND EX CEPT THE AMOUNT SPECIFIED IN CL.(BAA) OF S.80HHC ITSELF AND THAT SECTION 80-IA(9) DOES NOT EXPRESSLY OR IMPLIEDLY PR OVIDE THAT THE AMOUNT OF PROFIT ALLOWED AS DEDUCTION UNDER S. 80-IA(1) SHOULD BE REDUCED FROM THE PROFITS OF THE BUSINESS FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER S. 80HHC OF TH E ACT. THE OBJECT OF S. 80-IA(9) BEING NOT TO CURTAIL THE DEDUCTIONS COMPUTABLE UNDER VARIOUS PROVISIONS UNDER HEAD C OF CHAPTER VI-A, IT IS REASONABLE TO HOLD THAT S. 80-I A(9) AFFECTS ALLOWABILITY OF DEDUCTION AND NOT COMPUTATION OF DE DUCTION. TO ILLUSTRATE, IF RS.100 IS THE PROFITS OF THE BUSINES S OF THE UNDERTAKING, RS.30 IS THE PROFITS ALLOWED AS DEDUCT ION UNDER S. 80-IA(1) AND THE DEDUCTION COMPUTED AS PER S. 80HHC IS RS.80, THEN, IN VIEW OF S.80-IA(9), THE DEDUCTION U NDER S.80HHC WOULD BE RESTRICTED TO RS.70, SO THAT THE A GGREGATE DEDUCTION DOES NOT EXCEED THE PROFITS OF THE BUSINE SS. THE LD.DR HAS NOT BROUGHT ANY OTHER CONTRA DECISION TO OUR NOTICE. IN VIEW OF THIS POSITION, WE, RESPECTFULLY FOLLOWIN G THE ABOVE JUDGMENT OF THE BOMBAY HIGH COURT, SET ASIDE THE OR DERS OF REVENUE AUTHORITIES AND DIRECT THE ASSESSING OFFICE R TO CALCULATE THE DEDUCTION U/S 80IA & 80HHC IN ACCORDA NCE WITH ABOVE JUDGMENT OF BOMBAY HIGH COURT IN THE CASE OF ASSOCIATED CAPSULES (P) LTD VS DCIT & ANR (SUPRA). 4. SINCE THE ISSUE AGITATED IN THIS APPEAL IS IDENT ICAL TO THE CASE ALREADY DECIDED BY THE TRIBUNAL AS ABOVE, THE DECISION IS S QUARELY APPLICABLE TO THIS APPEAL ALSO. THEREFORE, BEING CONSISTENT WITH THE EARLIER ORDER OF THE TRIBUNAL, WE ITA NO.269/RJT/2011 3 DO NOT SEE ANY INFIRMITY IN THE DECISION ARRIVED AT BY THE CIT(A). WE UPHOLD HIS ORDER. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-09-2011. SD/- SD/- (D.K. TYAGI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT, DT : 30 TH SEPTEMBER, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-XXI, AHMEDABAD 4. THE CIT-III, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT