Amira foods (India) Ltd, V. ITO Ward 1 (2),

ITA 3066/DEL/2007

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9875 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 25-08-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 22-06-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Retrospective amendment; Additional evidence; Revised return; Set aside
• Section: 80HHC; 139(5); 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `D : NEW DELHI) BEFORE SHRI D.R. SINGH, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.1642/DEL./2006 (ASSESSMENT YEAR : 2002-03) DCIT, CIRCLE 1(1), VS. M/S AMIRA FOOD INDIA LTD., NEW DELHI. 25, ABDUL FAZAL ROAD, BENGALI MARKET, NEW DELHI. (PAN/GIR NO.AAACA2200M) AND I.T.A.NO.3066/DEL./2007 (ASSESSMENT YEAR : 2003-04) M/S AMIRA FOOD INDIA LTD., VS. DCIT, CIRCLE 1(1), NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE. REVENUE BY : SMT. KAVITA BHATNAGAR, CIT(DR) ORDER PER A.K. GARODIA: AM OUT OF THIS BUNCH OF TWO APPEALS, THERE IS ONE APPE AL OF THE REVENUE FOR ASSESSMENT YEAR 2002-03 DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)IV, NEW DELHI DATED 28.2.2006 AND THE REM AINING APPEAL IS OF THE ASSESSEE FOR ASSESSMENT YEAR 2003-04, DIRECTED AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV, NEW DELHI DATED 15.3.2007. FOR THE S AKE OF CONVENIENCE, BOTH THESE APPEALS ARE BEING DISPOSED BY THIS COMMON ORDER. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF NOTICE WHICH HAS COME BACK UNSERVED WITH THE REMARKS SHIFTED. NO NEW ADDRES S HAS BEEN INTIMATED BY THE ASSESSEE TO THE TRIBUNAL. HENCE, THE APPEAL OF THE ASSESSEE IS DISMISSED AS UNADMITTED FOR WANT OF PROSECUTION BY FOLLOWING THE TRIBUNALS DECISION RE NDERED IN THE CASE OF CIT VS. MULTIPLAN (INDIA) LTD., REPORTED IN 38 ITD 320. I.T.A. NOS.1642/DEL./06 & 3066/DEL./07 (A.YS.2002-03 & 03-04) 2 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED AS UNADMITTED. 4. NOW, WE DECIDE THE REVENUES APPEAL AFTER HEARIN G THE LD.DR OF THE REVENUE AND PERUSING THE MATERIAL AVAILABLE ON RECORD. GROUND NO.1 OF THE APPEAL READS AS UNDER: 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN ADMI TTING FRESH EVIDENCE IN VIOLATION OF RULE 46A WITHOUT APPRECIATING: (I) THAT THE SUBMISSION OF THE ASSESSEE THAT HE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE, IS IN CORRECT AND FALSE, AS THE EVIDENCE WHICH WAS FILED AND ADMITTED BY THE LD. CIT(A)WAS NOT EXISTING AT THE TIME OF ASSESSMENT. (II) THAT LETTER DATED 22.12.05 WAS PROCURED AFTER THE ASSESSMENT WAS COMPLETED ON 31.3.05. (III) THAT AS A RESULT OF ASSESSMENT ON 31`.3.05 RE FUSING DEDUCTION U/S 80IA THE ASSESSEE BELATEDLY FILED APPLICATION BEFOR E DISTT. INDUSTRIES CENTRE ONLY ON 29.7.05. (IV) THAT THE EVIDENCE WHICH WAS NOT IN EXISTENCE D URING THE COURSE OF ASSESSMENT PROCEEDINGS, IT SHOULD NOT BE ALLOWED TO BE ADMITTED. LD.DR OF THE REVENUE SUBMITTED THAT THE COMMISSIONE R OF INCOME-TAX (APPEALS) WAS NOT JUSTIFIED IN ADMITTING THE ADDITIONAL EVIDENCE. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.DR OF THE REVENUE AND WE FIND THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS DULY O BTAINED THE REMAND REPORT ALSO FROM THE ASSESSING OFFICER AND UNDER THESE FACTS, W E FIND NO REASON TO INTERFERE IN THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) ON THIS ISSUE. THIS GROUND OF THE REVENUE IS REJECTED. 6. GROUND NO.2 IN THIS APPEAL READS AS UNDER: 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN HOLD ING THAT THE REVISED RETURN FILED IS VALID, WITHOUT APPRECIATING (I) THAT THE INCOME IN THE ORIGINAL AND REVISED RET URN IS THE SAME. (II) THAT THE ASSESSEE ONLY REVISED THE DEDUCTIONS CLAIMED BY IT TO INFLATE ITS CLAIM SO AS TO AVOID PROPER PAYMENT OF DUE TAXES. I.T.A. NOS.1642/DEL./06 & 3066/DEL./07 (A.YS.2002-03 & 03-04) 3 7. LD.DR OF THE REVENUE SUBMITTED THAT THE COMMISSI ONER OF INCOME-TAX (APPEALS) WAS NOT CORRECT IN HOLDING THAT REVISED RETURN FILE D BY THE ASSESSEE IS VALID. HE SUPPORTED THE ASSESSMENT ORDER. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.DR OF THE REVENUE. WE FIND THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) DECIDED TH IS ISSUE IN FAVOUR OF THE ASSESSEE ON THE BASIS THAT THE ASSESSEE HAS SATISFIED ALL THE C ONDITIONS STIPULATED IN SECTION 139(5) OF THE ACT. WE ALSO FIND THAT THE COMMISSIONER OF INC OME-TAX (APPEALS) HAS FOLLOWED THE JUDGMENT OF THE HONBEL APEX COURT IN THE CASE OF D ELHI CLOTH & GENERAL MILLS CO. LTD. VS. STATE OF UP AS REPORTED IN 18 ITR 277, WHEREIN IT HAS BEEN OBSERVED THAT SO LONG AS A SUBSEQUENT RETURN OR FRESH RETURN OR REVISED RETURN IS ITSELF VALIDLY SUBMITTED, THE ASSESSEE IS ENTITLED TO EXERCISE HIS OPTION REGARDING COMPUT ATION OF METHOD (INCLUDING OF CHANGE OF HIS OPINION) U/S 61 OF THE UP AGRICULTURE I.T. ACT, 1948. UNDER THESE FACTS, WE FIND NO GOOD REASON TO INTERFERE IN THE ORDER OF THE COMMIS SIONER OF INCOME-TAX (APPEALS) ON THIS ISSUE ALSO. THIS GROUND IS ALSO REJECTED. 9. GROUND NO.3 OF THE APPEAL READS AS UNDER: 3. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS I N ALLOWING DEDUCTION U/S 80IA WITHOUT APPRECIATING (I) THAT THE INVESTMENT LIMIT IN PLANT & MACHINERY FOR SSI IS RS.3 CRORE WHILE THE ASSESSEE ITSELF DECLARED THE INVEST MENT OF MORE THAN RS.9 CRORE IN PLANT AND MACHINERY. (II) THAT THE CERTIFICATE ISSUED BY THE DISTT. IND. CENTRE ON 10.12.99 WAS ON THE BASIS OF INVESTMENT OF RS.82,43,528/- ONLY. (III) THAT WHEN THE AO ASKED THE ASSESSEE TO EXPLAI N THE DIFFERENCE, THE ASSESSEE COULD NOT FILE ANY SATISFACTORY EXPLANATIO N. (IV) THAT ONLY AFTER THE ASSESSMENT WAS COMPLETED O N 31.3.05, THE ASSESSEE FILED AN APPLICATION BEFORE THE DISTT. IND . CENTRE ON 29.7.05 TO INCLUDE THE ADDITIONS IN THE CERTIFICATE . (V) THAT THE LD. CIT(A) HERSELF HELD (IN LAST PARA ON PAGE 14 OF THE ORDER THAT THE INCOME TAX DEPARTMENT IS NOT BOUND T O FOLLOW THIS CERTIFICATE, AND RIGHTLY SO BECAUSE THE CONDITION N O.7 OF THE CERTIFICATE STIPULATES THAT THE SAID CERTIFICATE D OES NOT CONFER OR ACCRUE ANY RIGHT AND CANNOT BE TREATED AS PROOF IN RESPECT OF STATUTORY REQUIREMENT. I.T.A. NOS.1642/DEL./06 & 3066/DEL./07 (A.YS.2002-03 & 03-04) 4 (VI) THAT THE LD.CIT(A) ALLOWED EXCLUSION OF INTERE ST CHARGE OF RS.1.13 CRORE FROM THE COST OF PLANT AND MACHINERY ( AS PER PAGE 12 OF THE ORDER ) IN VIOLATION OF SECTION 11B OF INDUSTRIES A CT READ WITH CIRCULAR DATED 10.12.99. 10. LD.DR OF THE REVENUE SUPPORTED THE ASSESSMENT O RDER. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.DR OF THE REVENUE AND HAVE GO NE THROUGH THE ORDER OF THE AUTHORITIES BELOW. WE FIND THAT COMMISSIONER OF IN COME-TAX (APPEALS) HAS OBSERVED AT PAGE 13 OF HIS ORDER THAT IN THE REMAND REPORT, THE ASSESSING OFFICER HAS BROADLY OPINED THAT THE RE-CONCILIATION IS OF A TECHNICAL NATURE A ND THE DESIGNATED AUTHORITIES HAS CONSIDERED IT GIVING THE STATUS OF A SMALL SCALE UN IT TO THE ASSESSEE. THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS REPRODUCED THE RELEVANT PO RTION OF THE REMAND REPORT AS PER WHICH THE OFFICERS OF THE DIC HAD INSPECTED THE UN IT OF THE ASSESSEE AND IT WAS FOUND WITHIN S.S.I. LIMIT UP TO 6 TH JUNE, 2005 AND HENCE AS PER THE REPORT OF THE GM, DIC, GURGAON, THE ASSESSEE WAS A S.S.I. UNIT FOR THE YEA R UNDER CONSIDERATION. WE ALSO FIND THAT IT WAS A SUBMISSION OF THE ASSESSEE THAT OUT O F TOTAL COST ON PLANT AND MACHINERY OF RS.941.79 LAKHS, VARIOUS ITEMS HAVING THE COST OF R S.587 LAKHS WERE TO BE EXCLUDED FROM THE SAME FOR THE PURPOSE OF S.S.I. AND MACHINES OF RS.60.82 LAKH WERE LOCATED OUTSIDE THE GURGAON UNIT AND HENCE PLANT AND MACHINERY OF ONLY RS.283.96 LAKH WAS EXISTING FOR THE UNIT IN QUESTION. IT IS WITHIN THE PERMITTED LIMIT OF RS.3 CRORES. LD.DR OF THE REVENUE COULD NOT POINT OUT ANY DEFECT IN THE RE-CONCILIATI ON AS APPEARING ON PAGE 12 OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS) AND CONSIDE RING ALL THESE FACTS AND THE REMAND REPORT OF THE ASSESSING OFFICER, WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) ON THIS ISSUE ALSO. GROUND NO.3 IS ALSO REJECTED. 11. GROUND NO.4 OF THE APPEAL READS AS UNDER: 4. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DIR ECTING THE AO TO ALLOW DEDUCTION U/S 80HHC FIRST AND THEN UNDER SECTION 80 IA, WITHOUT APPRECIATING (I) THAT THE DIRECTIONS SO GIVEN IS IN VIOLATION OF PROVISIONS OF SECTION 80IA(9). (II) THAT THE REFERENCE TO SECTION 90AB IS IRRELEVA NT WHILE WORKING OUT SUCH DEDUCTIONS. I.T.A. NOS.1642/DEL./06 & 3066/DEL./07 (A.YS.2002-03 & 03-04) 5 12. IT WAS SUBMITTED BY THE LD.DR OF THE REVENUE TH AT NOW THIS ISSUE IS COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF THE SPECI AL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF ACIT VS. HINDUSTAN MINT & AGRO PRODUCTS PVT . LTD., REPORTED IN 119 ITD 117 (DEL.) (SB) AS PER WHICH FOR THE PURPOSE OF COMPUTI NG DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 80HHC, THE PROFIT SHOULD BE REDUCED BY THE AMOUNT OF DEDUCTION ALLOWED U/S 80IA/80IB. RESPECTFULLY FOLLOWING THIS DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL, WE DECIDE THIS ISSUE AGAINST THE ASSESSEE AND DIRECT T HE ASSESSING OFFICER TO RE-COMPUTE THE DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 80IA AND 80 HHC OF THE ACT AS PER THIS DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL. THIS GROUND OF THE REVENUE IS ALLOWED. 13. GROUND NO.5 OF THE APPEAL READS AS UNDER: 5. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DIR ECTING THAT DEDUCTION U/S 80HHC IS ADMISSIBLE ON EXPORT SALES OF SUGAR, SEED, PULSES ETC., WITHOUT APPRECIATING (I) THAT THE AO COMPUTED DEDUCTIONU/S 80HHC ON SUCH EXPORT SALES TREATING THE ASSESSEE AS A TRADING EXPORTER. (II) THAT DEDUCTION U/S 80HHC ON SUCH EXPORT SALES CANNOT BE COMPUTED TREATING THE ASSESSEE AS A MANUFACTURING EXPORTER. 14. THE LD.DR OF THE REVENUE SUPPORTED THE ASSESSME NT ORDER. AT THIS JUNCTURE, IT WAS POINTED OUT BY THE BENCH THAT BEFORE THE COMMIS SIONER OF INCOME-TAX (APPEALS) CERTAIN MISTAKES WERE POINTED IN THE ASSESSMENT ORD ER REGARDING QUANTUM OF EXPORT TURNOVER WHICH WAS STATED TO BE RS.781.05 LACS WAS AS AGAINST RS.1015.05 LAKHS STATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. REGARDING THE DIRECT EXPENSES ALSO, IT WAS SUBMITTED BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT DIRECT EXPENSES ARE OF RS.858.70 LAKH AS AGAINST RS.1092.70 LAKH ST ATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. IN THE LIGHT OF THESE FACTS, THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS DIRECTED THE ASSESSING OFFICER TO CONFIRM AND V ERIFY THESE FIGURES AND IF THE FIGURES SUBMITTED BY THE ASSESSEE ARE CORRECT, MAKE NECESSA RY CORRECTIONS. IT WAS ENQUIRED BY THE BENCH AS TO WHAT IS THE MISTAKE IN THE DIRECTION OF THE COMMISSIONER OF INCOME-TAX (APPEALS). LD.DR OF THE REVENUE HAD NOTHING TO SAY . IN VIEW OF THESE FACTS, WE FEEL THAT I.T.A. NOS.1642/DEL./06 & 3066/DEL./07 (A.YS.2002-03 & 03-04) 6 NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE C OMMISSIONER OF INCOME-TAX (APPEALS) ON THIS ISSUE. HENCE, GROUND NO.5 OF THE APPEAL IS RE JECTED. 15. GROUND NO.6 & 7 ARE INTER-CONNECTED WHICH READ AS UNDER: 6. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DIR ECTING THE AO TO EXAMINE THE DOCUMENTS SUBMITTED BY THE ASSESSEE FOR CLAIM U/S 80HHC IN RESPECT OF DEPB, WITHOUT APPRECIATING I) THAT SETTING ASIDE THE ISSUE TO THE AO IS BEYOND THE JURISDICTION OF LD. CIT(A). II) THAT ISSUE SHOULD HAVE BEEN DECIDED BY THE COMM ISSIONER OF INCOME-TAX (APPEALS) AS WAS DONE WHILE DECIDING THE ISSUE OF D EDUCTION U/S 80IA. 7. THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED I N LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFICER TO CONFIRM WHETHER THERE WAS A DOUBLE ADDITION, WITHOUT APPRECIATING THAT IT WAS THE METH OD OF COMPUTATION FOR DEDUCTION U/S 80HHC AS PER LAW. 16. IT WAS SUBMITTED BY THE LD.DR OF THE REVENUE TH AT IN VIEW OF THESE FACTS THAT THE AMOUNT OF EXPORT TURN OVER IS ITSELF TO BE EXAMINED BY THE ASSESSING OFFICER AS TO WHETHER THE SAME IS BELOW RS.10 CRORE AS STATED BY THE COMM ISSIONER OF INCOME-TAX (APPEALS) OR ABOVE RS.10 CRORES AS STATED BY THE ASSESSING OFFIC ER IN THE ASSESSMENT ORDER AND IN VIEW OF RETROSPECTIVE AMENDMENT U/S 80HHC, BOTH THE SE ISSUES SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DEC ISION. WE FIND MERIT IN THIS CONTENTION OF THE LD.DR OF THE REVENUE BECAUSE QUANTUM OF TURNOV ER IS NOT CLEAR AS TO WHETHER IT IS BELOW RS.10 CRORE OR ABOVE RS.10 CRORE AND THE COMP UTATION OF DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 80HHC IS NOT POSSIBLE WITHOUT THE SAME. THE AUTHORITIES BELOW HAVE NOT CONSIDERED THE AMENDED PROVISIONS OF SECTION 80HHC AND HENCE, WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) ON BOTH THESE ISSUES AND RESTORE BOTH THE MATTERS BACK TO THE FILE OF THE ASSESSING OFFICER F OR FRESH DECISION AS PER ABOVE DISCUSSION AND AS PER THE AMENDED PROVISIONS OF SEC TION 80HHC AND IN THE LIGHT OF THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF HINDUSTAN MINT & AGRO PRODUCTS PVT. LTD.(SUPRA) AS REPORTED IN 119 ITD 11 7 (DEL.)(SB). THE ASSESSING OFFICER SHOULD PASS NECESSARY ORDERS AS PER LAW AFTER PROVI DING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. BOTH THESE GROUNDS OF THE R EVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. THE APPEAL OF THE REVENUE STANDS PARTLY A LLOWED. I.T.A. NOS.1642/DEL./06 & 3066/DEL./07 (A.YS.2002-03 & 03-04) 7 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED, WHEREAS THE APPEAL OF THE REVENUE STANDS PARTLY ALLOWED. 18. ORDER PRONOUNCED IN OPEN COURT ON 28/08/2009. (D.R. SINGH ) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: AUG. 28, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-IV, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT