ITO 15(1)(4), MUMBAI V. DUTY FREE DISTRIBUTION SERVICES P.LTD, NAVI MUMBAI

ITA 2753/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2604 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 08-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 10AA; 115JB

Judgement Text

, , SMC , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, SMC MUMBAI , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO.2753/MUM/2015 ASSESSMENT YEAR: 2011-11 INCOME TAX OFFICER 15(1)(4) ROOM NO. 15B, GR. FLOOR AAYAKAR BHAVAN M.K. ROAD, MUMBAI 400020 / VS. M/S. DUTY FREE DISTRIBUTION SERVICES PVT. LTD. D-73/1, TTC INDUL. AREA MIDC, TURBHE, NAVI MUMBAI ( / REVENUE) ( /ASSESSEE) PAN . NO. AACCD6134D ! ' #$ / DATE OF HEARING : 13/07/2016 ' #$ / DATE OF ORDER: 13/07/2016 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 16/02/2015 OF LD. COMMISSIONER OF INCOME TAX, MUMBA I. / REVENUE BY SHRI RAJESH OJHA, JCIT / ASSESSEE BY SHRI J.P. BAIRAGRA ITA NO.2753/MUM/2015 DUTY FREE DISTRIBUTION SERVICES PVT. LTD. 2 THE FIRST GROUND AGITATED BY THE REVENUE, BEFORE TH IS TRIBUNAL, IS WITH RESPECT TO HOLDING THAT THE ASSESSEE IS ELI GIBLE FOR DEDUCTION UNDER SECTION 10AA OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. DURING HEARING, SHRI RAJESH OJHA, LEARNED D.R. DEFENDED THE CONCLUSION ARRIVED AT IN THE ASSESSMENT ORDER. ON THE OTHER HAND, SHRI J.P. BAIRAGRA, LEARNED COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. FACTS IN BRIEF AR E THAT THE ASSESSEE, CLAIMED TO BE ENGAGED IN THE BUSINESS OF DUTY FREE IMPORT AND EXPORT OF GOODS, MAINLY SOLD AT DUTY FRE E SHOPS IN INDIA AND ABROAD, MAINLY IN CIGARETTES AND FOREIGN MADE LIQUOR AND CLAIMED DEDUCTION AMOUNTING TO RS.48,78,973/- U NDER SECTION 10AA OF THE ACT. DURING SCRUTINY PROCEEDING S THE LEARNED ASSESSING OFFICER ASKED THE ASSESSEE TO FUR NISH NECESSARY DETAILS WHICH WERE FILED BY THE ASSESSEE. THE ASSESSEE VIDE LETTER DATED 13.10.2012 AND 09.03.201 3 MADE SUBMISSIONS CLAIMING THAT THE ASSESSEE IS A TRADING CONCERN AND ENGAGED IN TRADING SERVICE OF IMPORT AND EXPORT OF FMFL AND CIGARETTES FROM THE SEZ AND THEREFORE ELIGIBLE FOR DEDUCTION UNDER SECTION 10AA. THE ASSESSEE PLACED R ELIANCE ON SECTION 51 (1) OF THE SEZ ACT READ WITH RULE 76 OF SEZ RULES, 2006, WHEREIN THE SERVICES HAS BEEN DEFINE D TO INCLUDE TRADING. HOWEVER, THE LEARNED ASSESSING OFF ICER DISALLOWED THE CLAIMED DEDUCTION AND TAXED THE SAME UNDER THE NORMAL PROVISIONS OF THE ACT. ITA NO.2753/MUM/2015 DUTY FREE DISTRIBUTION SERVICES PVT. LTD. 3 3.1 ON APPEAL BEFORE THE LEARNED CIT(A) THE FACTUAL MATRIX/ SUBMISSIONS AS MENTIONED IN PARA 3.2 OF THE IMPUGNE D ORDER WERE CONSIDERED AND BY FOLLOWING VARIOUS DECISIONS INCLUDING HOTEL ASHOKA (ITDC) VS. ACIT (2012) STPL (WEB) 89 ( SC), GITANJALI EXPORTS (ITA NO. 6947 & 6948/MUM/2011), G OENKA DIAMONDS AND JEWELLERS LTD. 146 TTJ 68 (JP), MIDAS DFS PVT. LTD. 37 CCH 264 (KOL.), DECIDED IN FAVOUR OF THE AS SESSEE. THE REVENUE IS AGGRIEVED AND IS IN APPEAL BEFORE THIS T RIBUNAL. 3.2 IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER , LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCLUSION DR AWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSER TIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF KEPT IN JUXTAPOSI TION AND ANALYZED, WE FIND THE CLAIMED DEDUCTION UNDER SECTI ON 10AA OF THE ACT WAS STARTED IN 2007 FOR WHICH APPROVAL WAS GRANTED BY CSEZ DEVELOPMENT COMMISSIONER, PERMITTING THE ASSES SEE TO ESTABLISH THE UNIT AT SEZ TO UNDERTAKE ITS TRADING ACTIVITY. THE ASSESSEE PURCHASES ITEM LIKE CIGARETTES AND FOREIGN LIQUOR, BESIDE OTHER FOREIGN SUPPLIERS, FROM FLAMINGO DFS P VT. LTD. AND FROM FLAMINGO DUTY FREE SHOP PVT. LTD. HAVING T HEIR REGISTERED OFFICE AT NAVI MUMBAI. THESE TWO CONCERN S IMPORT THE ITEM FROM ABOARD AND FLAMINGO GOT THE LICENCE T O OPERATE DUTY FREE SHOPS AT VARIOUS AIR PORTS/SEA PORTS IN I NDIA AND ALSO HAS BONDED WAREHOUSES IN DIFFERENT CITIES IN I NDIA WHEREVER ITS DUTY FREE SHOPS. THE PURCHASES MADE BY THE ASSESSEE ARE BY WAY OF HIGH SEAS PURCHASES WHEREIN THE GOODS ARE SOLD BY FLAMINGO TO THE ASSESSEE, WHILE THE CAR GO IS ON THE HIGH SEAS. THESE ARE DONE THROUGH HIGH SEAS SALES C ONTRACT. THE NECESSARY DOCUMENTS WERE DULY EXAMINED BY THE L EARNED ITA NO.2753/MUM/2015 DUTY FREE DISTRIBUTION SERVICES PVT. LTD. 4 CIT(A) AND THIS FACTUAL MATRIX IS NOT CONTROVERTED BY THE REVENUE. ORIGINAL BILL OF LADING, BILL OF ENTRY WER E ALSO EXAMINED. THE PURCHASES WERE MADE ON THE HIGH SEAS AND NOT IN INDIA. THERE IS NOT A SINGLE INSTANCE WHERE THE LOCAL PURCHASES WERE MADE WITHIN IN INDIA. WE FIND THAT T HE RATIO LAID DOWN IN THE CASES LIKE GITANJALI EXPORTS, MIDA S DFS PVT. LTD. AND GOENKA DIAMOND AND JEWELLERS LTD. (SUPRA), SUPPORT THE CASE OF THE ASSESSEE. THE ISSUE OF ALLOWABILITY WAS DULY CONSIDERED BY THE JAIPUR BENCH IN 146 TTJ 68 (SUPRA ). THE TOTALITY OF FACTS/PROVISIONS OF SEZ ACT AND SEZ RUL ES PROVIDES THAT THE BENEFIT OF SECTION 10AA IS AVAILABLE ON TR ADING. THE RATIO LAID DOWN IN GITANJALI EXPORTS CORPORATION AN D GITANJALI GENTS LTD. ALSO SUPPORTS THE CASE OF THE ASSESSEE. THE RELEVANT FINDINGS HAVE BEEN REPRODUCED AT PAGE 6 ON WARDS OF THE IMPUGNED ORDER. CONSIDERING THE TOTALITY OF FACTS A ND THE JUDICIAL PRONOUNCEMENTS DISCUSSED HEREINABOVE WE FI ND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LEARNED CI T(A). 4. SO FAR AS THE NEXT GROUND, I.E. DELETING THE ADD ITION WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE AC T IS CONCERNED IT IS CONSEQUENTIAL TO THE DISALLOWANCE M ADE UNDER SECTION 10AA WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JB. SINCE WE HAVE UPHELD THE CLAIMED DEDUCTION U NDER SECTION 10AA OF THE ACT IN FAVOUR OF THE ASSESSEE T HERE IS NO QUESTION OF ADDING THE SAME WHILE COMPUTING THE BOO K PROFIT UNDER SECTION 115JB OF THE ACT. THUS WE FIND NO MER IT IN THE APPEAL OF THE REVENUE. FINALLY THE APPEAL OF THE RE VENUE IS DISMISSED. ITA NO.2753/MUM/2015 DUTY FREE DISTRIBUTION SERVICES PVT. LTD. 5 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. D.R. AT THE CONCLUSION OF THE HEAR ING ON 13/07/2016. SD/- (JOGINDER SINGH) ! /JUDICIAL MEMBER ! MUMBAI; & DATED : 13/07/2016 AA? P.S / /. . . ' #$%&%'# / COPY OF THE ORDER FORWARDED TO : 1. ()*+, / THE APPELLANT (RESPECTIVE ASSESSEE) 2. -.+, / THE RESPONDENT. 3. / / 0 ( ()* ) / THE CIT-15, MUMBAI. 4. / / 0 / CIT(A)-24, MUMBAI, 5. 23 - , / ()*# (4 , ! / DR, SMC BENCH, ITAT, MUMBAI 6. 5 6!* / GUARD FILE. / BY ORDER, .2) - //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI