The DCIT, Circle-2, JUNAGADH V. Shri Manojkumar Vasantlal Sonpal, AMRELI

ITA 275/RJT/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7336 (ITAT-RAJKOT)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-11-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 17-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KRISHNA PRABHAKAR
• Keywords: Tax effect
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI T.K. SHARMA (JM) AND SHRI A.L. GEHLOT ( AM) I.T.A. NO.275 & 281/RJT/2011 (ASSESSMENT YEARS 2004-05 & 2005-06) THE D.C.I.T., CIRCLE-2, VS SHRI MANOJKUMAR VASANTL AL SONPAL, JUNAGADH PROP.OF M/S. HANUMAN INDUSTRIES, AMRELI.. PAN :AHSPS7182G. (APPELLANT) (RESPONDENT) DATE OF HEARING : 02-12-2011 DATE OF PRONOUNCEMENT : -12-2011 REVENUE BY : SHRI KRISHNA PRABHAKAR, D.R. ASSESSEE BY : WRITTEN SUBMISSION. O R D E R PER T.K. SHARMA (JM) THESE CROSS APPEALS ARE AGAINST THE ORDER DATED 31 -03-2011 OF CIT (A)- XXI, AHMEDABAD FOR THE ASSESSMENT YEARS 2004-05 & 2 005-06. 2. IN RESPECT OF BOTH THESE APPEALS, SHRI D.R.,ADHI A POINTED OUT THAT TAX EFFECT IS BELOW RS.3,00,000/-, THEREFORE, THESE APP EALS BE DISMISSED. ON THE OTHER HAND, SHRI KRISHNA PRABHAKAR, SR. D. R. POINT ED OUT THAT THOUGH THE TAX EFFECT IS BELOW THE MONETARY LIMIT PRESCRIBED BY TH E BOARD INSTRUCTION NO.3/2011 DATED 09-02-2011, THE ISSUE INVOLVED REVENUES OBJE CTION. THEREFORE, BOTH THE APPEALS ARE COVERED UNDER EXCEPTIONAL TO THE MONETA RY LIMIT. WE FIND CONSIDERABLE FORCE IN SUBMISSION MADE BY LD. D.R. THEREFORE, WE PROCEED TO DECIDE BOTH THESE APPEALS ON MERIT. 3. THE GROUNDS RAISED BY REVENUE IN ITS APPEAL FOR THE A.Y.2004-05 ARE AS UNDER:- ITA NO 275 & 281/RJT/2011 2 (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,31,468/- ON ACCOUNT OF DEDUCTION U/S.80HHC . (2) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,89,267 ON ACCOUNT OF DEDUCTION U/S.80IB. 4. THE ONLY GROUND RAISED BY REVENUE IN ITS APPEAL FOR THE A.Y.2005-06 IS AS UNDER:- (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,15,939/- ON ACCOUNT OF DEDUCTION U/S.80IB. 5. THE CONTROVERSY INVOLVED IN GROUND NO.1 FOR THEE A.Y.2004-05 IS THAT IN THEE ASSESSMENT ORDER, RELYING ON THE LANGUAGE OF S UB-SECTION 4(B) OF SECTION 8HHC, AO EDUCED THE AMOUNT OF DEDUCTION UNDER SECTI ON 80IB OF THE I.T.ACT,1961. ON APPEAL IN THE IMPUGNED ODE, THE L D. CIT(APPEALS) ACCEPTED THE QUANTUM OF THE ASSESSEE THAT TAX DEDUCTION U/S.80HH C IS ALLOWABLE WITHOUT DEDUCTING CLAIM OF DEDUCTION U/S.80IB OF THE I.T.AC T,1961. THE VIEW TAKEN BY LD. CIT(APPEAL) IN THE IMPUGNED ORDER IS IN CONFORMITY WITH THE LATEST JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ASSOCIATED CAPSULES (P) LTD. AND ANOTHER 322 ITR 42 (BOM). WE THEREFORE, DECLINED T O INTERFERE. THIS GROUND OF APPEAL IS REJECTED. 6. THE CONTROVERSY INVOLVED IN GROUND NO.2 FOR THE A.Y.2004-05 AND ONLY GROUND IN APPEAL OF THE REVENUE FOR THE A.Y.2005-06 IS WHETHER THE DEPB CREDIT WOULD FORM PART OF PROFIT FOR THE PURPOSE OF COMPUT ING DEDUCTION U/S.80IB OF THE I.T. ACT, 1961. THIS ISSUE IS COVERED AGAINST THE A SSESSEE BY JUDGMENT OF APEX COURT IN THE CASE OF LIBERTY INDIA VS. CIT 317 ITR 218 (SC) WHEREIN, IT HAS BEEN HELD THAT DUTY DRAW BACK RECEIPT AND DEPB BENEFIT D O NOT FORM PAT OF NET PROFIT FOR THE PURPOSE OF COMPUTING DEDUCTION U/S.80IB OF THE I.T.ACT,1961. RESPECTFULLY FOLLOWING THE JUDGMENT OF APEX COURT, WE REVERSE THE ORDER OF CIT(A) AND ALLOW GROUND NO.2 OF REVENUE APPEAL FOR THE ASSESSMENT YEAR 2004- 05 AND APPEAL OF THE REVENUE FOR THE ASSESSMENT YEA R 2005-06. ITA NO 275 & 281/RJT/2011 3 7. IN THE RESULT, THE APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 2004-05 IS PARTLY ALLOWED AND A.Y.2005-06 IS ALLOWED. . THIS ORDER PRONOUNCED IN THE OPEN COURT ON 15- 12-2011. SD/- SD/- (A.L. GEHLOT) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 15 TH DECEMBER, 2011 NVA/- 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