ACIT 8(1), MUMBAI V. ANTHEA AROMATICS P. LTD, MUMBAI

ITA 3174/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7808 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2001-2002
• Appeal Filed On: 23-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Section: 80HHC

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI R. V. EASWAR, PRESIDENT AND SHRI RAJEN DRA SINGH(AM) ITA NO.3174/M/2010 ASSESSMENT YEAR 2001-02 THE ACIT 8(1), R.NO.210, 2 ND FLOOR, M/S.ANTHEA AROMATICS PVT. LTD. AAYAKAR BHAVAN, M.K.MARG, 7A-11, TAKSHILA, MAHAK ALI CAVES MUMBAI 400 020. ANDHERI (E), MUMBAI 400 059. PAN : AABCA 0741 L APPELLANT RESPONDENT REVENUE BY : SHRI S.K.SINGH ASSESSEE BY : NONE O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 10.2.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2001-02. THE ONLY DISPUTE RAISED IS REGARDING ALLOWABILITY OF DEDUCTION UNDER SECTION 8 0HHC IN RELATION TO DEPB INCOME. AT THE TIME OF HEARING, NO ONE IS APPEARED ON BEHALF OF THE ASSESSEE ALTHOUGH NOTICE OF HEARING HAD BEEN SENT WELL IN AD VANCE. WE THEREFORE PROCEED TO DECIDE THE APPEAL ON THE BASIS OF MATERI AL AVAILABLE ON RECORD AND AFTER HEARING THE LEARNED DR. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E AO DURING THE ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE WHO WAS AN EXPORTER HAD 2 RECEIVED DEPB INCOME WHICH HAD BEEN TREATED UNDER S ECTION 28(III)(A)/(B)/(C) AND DEDUCTION HAD BEEN CLAIMED ACCORDINGLY. THE AO HELD THAT THE NATURE OF DEPB INCOME WAS COVERED UNDER SECTION 28(IV) AND AC CORDINGLY HE DENIED THE CLAIM OF DEDUCTION. IN APPEAL CIT(A) FOLLOWING THE DECISION OF SPECIAL BENCH OF TRIBUNAL IN CASE OF M/S. TOPMAN EXPORTS VS ITO (318 ITR (AT) 87) HELD THAT FACE VALUE OF THE DEPB HAD TO BE TREATED AS INCOME UNDER SECTION 28(III)(B) AND IN CASE OF SALE, EXCESS OF SALE PROCEEDS OVER THE F ACE VALUE HAD TO BE TREATED AS PROFIT UNDER SECTION 28(III)(D). HE THEREFORE DIREC TED THE AO TO COMPUTE THE DEDUCTION ACCORDINGLY. AGGRIEVED BY THE SAID DECISI ON THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE LEARNED DR, PERUSED THE RECORD S AND CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABI LITY OF DEDUCTION UNDER SECTION 80HHC IN RESPECT OF DEPB INCOME. THE CIT(A) FOLLOWING THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN CASE OF TOPMAN EXP ORTS (SUPRA) HAS TAKEN THE VIEW THAT THE FACE VALUE OF DEPB WILL BE CONSIDERED AS INCOME UNDER SECTION 28(III)(B) AND IN CASE OF SALE, EXCESS OF SALE VALU E OVER THE FACE VALUE HAS TO BE CONSIDERED AS PROFIT UNDER SECTION 28(III)(D). THE VIEW TAKEN BY THE SPECIAL BENCH WAS HOWEVER NOT UPHELD BY THE HONBLE HIGH CO URT OF MUMBAI IN CASE OF CIT VS KALPATARU COLOURS AND CHEMICALS (328 ITR 451 ) IN WHICH IT WAS HELD THAT THE ENTIRE DEPB INCOME INCLUDING THE FACE VALU E AND THE PROFIT ON SALE HAS TO BE CONSIDERED AS INCOME UNDER SECTION 28(III)(D) WHILE COMPUTING DEDUCTION UNDER SECTION 80HHC. THE ORDER OF CIT(A) THEREFORE CANNOT BE UPHELD. WE ACCORDINGLY SET ASIDE THE ORDER OF CIT(A) AND RESTO RE THE ISSUE TO THE FILE OF AO FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATI ON IN THE LIGHT OF JUDGMENT OF HONBLE HIGH COURT OF MUMBAI IN CASE OF CIT VS K ALPATARU COLOURS & CHEMICALS (SUPRA) AND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 3 4. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED F OR STATISTICAL PURPOSE. 5. ORDER WAS PRONOUNCED IN THE OPEN COURT 29.03.2 011. SD/- SD/- ( R. V. EASWAR ) (RAJENDR A SINGH) PRESIDENT ACCOUNTANT MEMBER DATE : 29.03.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR G BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK