Mitesh Impex, JAMNAGAR V. The Assistant Commissioner of Income Tax, Circle-2, JAMNAGAR

ITA 333/RJT/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67243 (ITAT-RAJKOT)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-04-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 21-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K SINGH DR U C
• Assessee Lawyers: J C RANPURA CA U
• Keywords: Deemed export; Competent authority
• Section: 143(3); 10B

Judgement Text

C I, IN THE INCOME TAX APPELLATE TRIBU N AL; RAJKOT BENCH, RAJKOT. BEFORE SHRI D . K. TYAGI , JM AND SHRI A. M OHAN ALANKAMONY , AM IT A NO . 784/RJT//2010 , 333 & 334/RJT/2012 OH H / ASSESSMENT YEAR 2005 - 06 , 2003 - 0 4 & 2006 - 07 MITESH IMPEX, PLOT NO.287, GIDC PHASE - II, DARED, JAMNAGAR PAN : AADFM 2151 M ( / APPELLANT) VS. ITO, WAR D - 2(2), JAMNAGAR A / RESPONDENT OHU /ASSESSEE BY SHRI J C RANPURA, CA . U / REVENUE BY SHRI M K SINGH, DR U C / DATE OF HEARING 22.04.2013 U C / DATE OF PRONOUNCEMENT 26 .04.2013 / ORDER PER BENCH: - THE SE THERE A PPEAL S ARE FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A), JAMNAGAR IN APPEAL NO S .CIT(A)/JAM/236/07 - 08/1600 ,158/10 - 11/101 & 159/10 - 11/101 DTD. 21.01.2010 , 25.04.2012 AND 25.04.2012 FOR THE ASSESSMENT YEAR 2005 - 06, 2003 - 04 AND 2006 - 07 RESPECTIVELY, PASSED U/S 250 W.R.S. 143(3) OF THE ACT . SINCE THE ISSUE IS IDENTICAL FOR ALL THE 3 ASSESSMENT YEARS, FOR THE SAKE OF CONVENIENCE, ALL THE CASES WERE HEARD TOGETHER AND ARE DISPOSED - OFF BY THIS COMMON ORDER. FOR THE ASSESSMENT YEAR 2006 - 07, THE GROUNDS WITH RESPECT TO DISALLOWANCE OF CUSTOMS FINE AND EXCISE FINE WERE NOT ARGUED BEFOR E US AND THEREFORE DISPOSED OF AS NOT PRESSED. 2. THE LEAD CASE IS TAKEN UP FOR ADJUDICATION IS FOR THE ASSESSMENT YEAR 2005 - 06 VIZ ITA NO.784/RJ T/2010. THE ASSESSEE IN ITS APPEAL HAS RAISED THREE GROUNDS, HOWEVER THE CRUX OF THE ISSUE IS THAT THE ASS ESSEE IS AGGRIEVED BY THE ORDER OF LD. CIT (A) WHEREIN HE HAS CONFIRMED THE ORDER OF LD. AO DENYING THE DEDUCTION U/S. 10B OF THE ACT , BY TREATING THE TURNOVER THE ASSESSEE AS NOT DEEMED EXPORT FOR ITS DOMESTIC SALE S TO OTHER E XPORT O RIENTED U NIT (EOU) . ITA NO.784/RJT//2010, 333 & 334/RJT/2012 2 3. THE ASSESSEE IS A FIRM , ENGAGED IN THE BUSINESS OF MANUFACTURING AND PRODUCING RECYCLED FERROUS AND NON - FERROUS METALS AND EXPORTING THE SAME AND ALSO SELLING IT IN THE DOMESTIC MARKETS, FILED ITS RETURN OF INCOME ON 17.11.2005 DECLARING INCOME O F RS.72 ,819/ - . THE ASSESSEE HAD CLAIMED DEDUCTION U/S 10B OF THE ACT BY FILING THE REQUISITE FORMS. IT IS OBSERVED BY THE LD. AO THAT FROM THE DETAILS OF EXPORT SUBMITTED THE ASSESSEE HAS SHOWN DEEMED EXPORTS SALES WORTH RS.6,40,35,764/ - . THE ENTIRE SALE PROCEE DS WAS RECEIVED IN INDIAN RUPEES AND THE GOODS WERE DELIVERED TO M/S. PARIKH ENTERPRISES PVT LTD AHMEDABAD AT JAMNAGAR IN INDIA. SUCH SIMILAR SALES DECLARED BY THE ASSESSEE AS DEEMED EXPORTS AGGREGATED TO RS.7,03,68,842/ - AS PER THE GROUNDS OF APPEAL . T HE LD. AO OPINIONED THAT THE DEDUCTION U/S 10B CANNOT BE GRANTED TO DOMESTIC SALES OF SUCH NATURE SINCE THE GOODS WERE NOT EXPORTED OUT OF INDIA AND THE SALES PROCEEDS WERE NOT REALIZED IN FOREIGN EXCHANGE AS S PECIFIED IN 10B OF THE ACT AND THEREFORE, DISA LLOWED THE DEDUCTION . LD CIT(A) CONFIRMED THE ORDER OF LD AO. AGGRIEVED BY THE ORDER OF THE LD CIT(A) THE ASSESSEE IS NOW IN APPEAL BEFORE US. 4.. LD. AR REITERATED HIS SUBMISSION MADE BEFORE THE REVENUE AUTHORITIES BEFORE US, HOWEVER, AGREED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY TH E DECISION OF THE TRIBUNAL, RAJ KOT BENCH IN ITA NO.1063/RJT/2010 F OR THE ASSESSMENT YEAR 2005 - 06 IN THE CASE OF SIYARAM METALS PVT LTD V. ACIT, CIRCLE - 2, JAMNAGAR. LD. DR ARGUED IN SUPPORT OF THE REVENUE RELYIN G ON ITS ORDERS AND THE DECISION OF TRIBUNAL CITED (SUPRA). 5. WE HAVE HEARD THE RIVAL SUBMISSION AND CAREFULLY CONSIDERED THE MATERIALS ON RECORD. ON PERUSING THE ORDER OF THE TRIBUNAL (SUPRA) ON THE IDENTICAL ISSUE WE FIND THAT THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL OF RAJKOT BEN CH. FOR REFERENCE WE HEREBY REPRODUCE THE RELEVANT PORTION OF THE ORDER: ITA NO.784/RJT//2010, 333 & 334/RJT/2012 3 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CONSIDERED THEIR SUBMISSIONS. THE ISSUE UNDER APPEAL IS COVERED AGAINST THE ASSESSEE AN D IN FAVOUR OF THE DEPARTMENT BY THE ORDER PASSED BY THIS BENCH ON 28.09.2012 IN ITO V. MONARCH OVERS E AS, IT A NO. 253/RJT/2011 RELATING TO ASSESSMENT YEAR 2007 - 08. RELEVANT PORTION OF THE SAID ORDER READS AS UNDER: - 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CONSIDERED THEIR SUBMISSIONS. IT IS CLEAR ON PLAIN READING OF SUB - SECTION (3) OF SECTION 10B THAT SECTION 10B APPLIES TO THE UNDERTAKING IF THE SALE PROCEEDS OF ARTICLES OR THINGS OR COMPUTER SOFTWARE EXPORTED OUT OF INDIA ARE RECEIVED IN, OR BROUGHT INTO, INDIA BY THE ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE, WITHIN A PERIOD OF SIX MONTHS FROM THE END OF THE PREVIOUS YEAR OR, WITHIN SUCH FURTHER PERIOD AS THE COMPETENT AUTHORITY MAY ALLOW IN THIS BEHALF. IT IS QUITE APPARENT THAT TWO CONDITI ONS ARE STIPULATED BY SUB - SECTION (3) FOR AVAILING THE RELIEF UNDER SECTION 10B. FIRST CONDITION IS THAT THE ARTICLES OR THINGS OR COMPUTER SOFTWARE MUST BE EXPORTED OUT OF INDIA WHILE THE SECOND CONDITION IS THAT THE SALE PROCEEDS THEREOF MUST BE RECEI VED IN CONVERTIBLE FOREIGN EXCHANGE WITHIN THE STIPULATED PERIOD. BOTH THE AFORESAID CONDITIONS ARE CUMULATIVE AND THEREFORE BOTH OF THEM HAVE TO BE SATISFIED TOGETHER. MERE RECEIPT OF CONVERTIBLE FOREIGN EXCHANGE IS NOT SUFFICIENT UNLESS THE ASSESSEE AL SO ESTABLISHES THAT THE CONVERTIBLE FOREIGN EXCHANGE SO RECEIVED REPRESENTS SALE PROCEEDS OF ARTICLES OR THINGS OR COMPUTER SOFTWARE EXPORTED OUT OF INDIA. PLAIN AND SIMPLE MEANING OF THE TERM EXPORTED OUT OF INDIA AS USED IN SECTION 10B(3) WOULD ENTA IL THE TRANSFER OF GOODS OUT OF THE TERRITORY OF INDIA AND THEREFORE THE GOODS MUST PHYSICALLY MOVE OUT OF INDIA. IN OUR CONSIDERED VIEW, THE ASSESSEE NEEDS TO SATISFY FIRSTLY THAT IT HAS EXPORTED SPECIFIED GOODS OUT OF INDIA AND THEREAFTER IT HAS ALSO TO SATISFY THAT THE SALE PROCEEDS THEREOF HAVE BEEN RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE WITHIN THE STIPULATED PERIOD. THE AFORESAID POSITION IS WELL BROUGHT OUT ON PLAIN READING OF SUB - SECTION (3) OF SECTION 10B AND THEREFORE DOES NOT REQUIRE ANY AUTHO RITY TO SUPPORT IT. HOWEVER, THE JUDGMENT DATED 26.04.2011 OF THE HONBLE ANDHRA PRADESH HIGH COURT IN M/S. SWAYAM CONSULTANCY PRIVATE LTD. V. ITO, TAX APPEAL NO.62 OF 2011 AND OF THE HONBLE DELHI HIGH COURT INDIA DEL(P) LTD VS. CIT (2012) 250 CTR (DEL) 344 ARE QUITE APPOSITE. 7. AS EVIDENT FROM THE AFORESAID DISCUSSION, RELIEF U/S 10B IS NOT AVAILABLE UNLESS THE GOODS OF SPECIFIED NATURE ARE SHOWN TO HAVE BEEN EXPORTED BY THE ASSESSEE OUT OF INDIA AND THE SALE PROCEEDS THEREOF HAVE BEEN RECEIVED IN CON VERTIBLE FOREIGN EXCHANGE WITHIN THE SPECIFIED PERIOD. THE ASSESSEE, APART FROM PLEADING THAT THE GOODS HAVE BEEN SOLD TO 100% EOU, HAS PLACED NO MATERIAL S ON RECORD TO ESTABLISH THAT THE GOODS OF SPECIFIED NATURE HAVE REALLY BEEN EXPORTED OUT OF INDIA BY HIM. THE ASSESSEE DOES NOT THEREFORE SATISFY THE PRIMARY CONDITION OF HAVING EXPORTED THE SPECIFIED GOODS OUT OF INDIA AND IS THEREFORE NOT ENTITLED TO RELIEF U/S 10B ON THE SOLE BASIS THAT IT HAS SOLD GOODS OF SPECIFIED NATURE TO 100% EOU OR RECEIVED THE IR SALE PROCEEDS IN CONVERTIBLE FOREIGN EXCHANGE. IN THIS VIEW OF THE MATTER, THE ORDER OF THE CIT(A) DESERVES TO BE REVERSED AND IS ACCORDINGLY REVERSED. RESULTANTLY, THE ORDER OF THE ASSESSING OFFICER IN THIS BEHALF IS RESTORED. 7. FACTS OF THE CASE IN THE PRESENT APPEAL ARE IDENTICAL WITH THOSE IN THE AFORESAID ORDER PASSED BY THIS TRIBUNAL. FOLLOWING THE AFORESAID ORDER OF THIS TRIBUNAL, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ITA NO.784/RJT//2010, 333 & 334/RJT/2012 4 6. FOLLOWING THE DECISION OF THE RAJKOT BENCH CITED (SUPRA), WE HEREBY DECIDE THE ISSUE IN FAVOUR OF REVENUE AND AGAINST THE ASSESSEE. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE FOR ALL THE THREE ASSESSMENT YEARS ARE DECIDED AGAINST IT. 7. IN THE RESULT , THE APPEAL S FILED BY THE ASSESSEE IN ITA NOS.784/RJT/ 2010, 333/RJT/2012 & 334/RJT/2012 ARE DISMISSED. T HIS O RDER IS PRONOUNCED IN THE O PEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - (D .K. TYAGI) ( A.M OHAN ALANKAMONY ) O . / JUDICIAL MEMBER OHAN / ACCOUNTANT MEMBER N/ ORDER DATE : - 26 - 04 - 2013 /RAJKOT BT T RJO O / COPY OF ORDER FORWARDED TO: - 1 / APPELLANT - M/S. MITESH IMPEX, JAMNAGAR 2 A / RESPONDENT - ITO,WARD - 2(2), JAMNAGAR 3 I G / CIT , JAMNAGAR 4. G - / CIT (A) , JAMNAGAR 5 OOI, C I, / DR, ITAT, RAJKOT 6 H / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, RAJKOT.