Nice Overseas, Panipat V. ITO Ward-3, Panipat

ITA 3105/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8483 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 30-07-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 10-10-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Keywords: Business income
• Section: 80HHC; 80IB; 274; 207

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI R.P.TOLANI, JM AND SHRI R.C.SHARMA, AM ITA NO.3105/DEL/2008 ASSESSMENT YEAR : 2001-02 M/S NICE OVERSEAS, SECTOR-25, HUDA, PANIPAT. VS. INCOME TAX OFFICER, WARD-3, PANIPAT. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE. RESPONDENT BY : SHRI H.K.LAL, DR. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 31.7.2008 FOR THE AY 2001-02. 2. AN ADJOURNMENT PETITION WAS PLACED ON RECORD, BU T NOBODY WAS PRESENT TO PROSECUTE THE SAME. THE BENCH FOUND THA T BOTH THE ISSUES RAISED BY THE ASSESSEE ARE SQUARELY COVERED BY THE DECISIO N OF JURISDICTIONAL HIGH COURT AND ITAT SPECIAL BENCH, THEREFORE DECIDED TO DISPOSE THE APPEAL AFTER CONSIDERING THE MATERIAL PLACED ON RECORD AND THE D ECISION OF JURISDICTIONAL HIGH COURT. 3. FIRST GRIEVANCE OF THE ASSESSEE RELATES TO DISAL LOWANCE OF CLAIM OF DEDUCTION U/S 80IB ON EXPORT INCENTIVES AND DUTY DR AWBACK/DEPB. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN EXPORTER WHO DERIVES INCOME FROM MANUFACTURE AND EXPORT OF HANDLOOM GOODS. THE ASSE SSEE HAS RECEIVED CASH INCENTIVES ON ACCOUNT OF DEPB, RS.12,93,320/- AND D UTY DRAWBACK, ITA-3105/D/2008 2 RS.25,74,209/-. THE ASSESSEE HAS CLAIMED THAT DEPB AND DUTY DRAWBACK ARE PART OF EXPORT RECEIPTS OR ALTERNATIVELY THEY MAY B E REDUCED FROM THE COST OF GOODS MANUFACTURED BECAUSE IT IS RETURN OF THE DUTY PAID, THEREFORE, THE ASSESSEE CLAIMED DEDUCTION U/S 80IB ON THE AMOUNT O F DUTY DRAWBACK AND DEPB ALSO. AO HAS DISALLOWED THE CLAIM OF THE ASSE SSEE AND RELIED ON THE DECISION IN THE CASE OF CIT VS. STERLING FOODS 23 7 ITR 579 (SC), CIT VS. RITESH INDUSTRIES 274 ITR 324 (DELHI) AND OTHER D ECISIONS AND HELD THAT DEPB AND DUTY DRAWBACK ARE NOT THE INCOME DERIVED F ROM THE BUSINESS INCOME WHICH IS ELIGIBLE FOR DEDUCTION U/S 80IB. B Y THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ORDER OF AO. 4. IN THE CASE OF LIBERTY SHOES 207 CTR 243 (P&H) , NAHAR EXPORTS 288 ITR 494 (P&H) AND FIVE STAR RUGS 207 CTR 246 (P&H), THE HON'BLE JURISDICTIONAL HIGH COURT HAS DECIDED THAT DEPB AND DUTY DRAWBACK ARE NOT THE ELIGIBLE INCOME FOR DEDUCTION U/S 80IB BECAUSE THEY ARE NOT DERIVED FROM SPECIFIED BUSINESS. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT WHICH IS THE JU RISDICTIONAL HIGH COURT, IN THE CASE OF LIBERTY INDIA (SUPRA) AND OTH ER CASES, THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB ON THE AMOUNT RECEI VED ON ACCOUNT OF DEPB AND DUTY DRAWBACK, HENCE THIS GROUND OF APPEAL OF T HE ASSESSEE IS REJECTED. 5. NEXT GRIEVANCE OF THE ASSESSEE RELATES TO REDUCI NG THE DEDUCTION U/S 80HHC IN VIEW OF THE PROVISIONS OF SECTION 80IB(13) READ WITH SECTION 80IA(9) OF THE IT ACT. THE ISSUE IS NO RES-INTEGRA IN VIEW OF THE DECISION OF LARGER BENCH IN THE CASE OF HINDUSTAN MINT & AGRO P RODUCTS IN ITA NOS.1537, 1538 & 1539/DEL/2007 WHEREIN VIDE ORDER D ATED 23.6.2009, THE DECISION OF SPECIAL BENCH IN THE CASE OF ROGINI GAR MENTS 108 ITD 495 WAS UPHELD AFTER DISCUSSING THE VARIOUS JUDGMENTS O F HIGH COURTS AND ITA-3105/D/2008 3 HON'BLE SUPREME COURT AND IT WAS FINALLY HELD THAT IN VIEW OF THE PROVISIONS OF SECTION 80IA(9) AND 80IA(13), THE ASSESSEE IS EL IGIBLE FOR CLAIM OF DEDUCTION U/S 80HHC ON THE ELIGIBLE PROFIT WHICH IS WORKED OUT AFTER REDUCING THE AMOUNT OF DEDUCTION ALLOWED U/S 80IB. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE HOLD THAT THE ASSESSEE IS N OT ENTITLED TO CLAIM DEDUCTION ON THE VERY SAME AMOUNT OF ELIGIBLE PROFI T U/S 80HHC AND 80IB. RESPECTFULLY FOLLOWING THE SAME, THIS GROUND RAISED BY THE ASSESSEE IS ALSO REJECTED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH JULY, 2009. SD/- SD/- (R.P.TOLANI) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30.07.2009. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR