Parikh Enterprises Pvt. Ltd., Ahmedabad V. The Dy.CIT.,Circle-5, Ahmedabad

ITA 342/AHD/2012

• Counselvise Citation: 34220514 RSA 2012
• Duration Of Justice: 3 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-11-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 06-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: J M SHAH
• Keywords: Opportunity of being heard; Reassessment proceedings
• Section: 28; 154; 143(3); 80HHC

Judgement Text

ITA NO .342 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 0 - 01 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND KUL BHARAT JM] ITA NO. 342 / AHD / 2 0 1 2 ASSESSMENT YEAR: 20 0 0 - 01 PARIKH ENTERPRISE PVT. LTD., ....... .. . ..... APPELLANT C/O. VINOD AND NARENDRA, 101/ 102, SHAILY , NR. OLD GUJARAT HIGH COUR T , NAVRANGPURA, AHMEDABAD. [PAN AA ACP 9275 D] VS. DY. COMMISSIONER OF INCOME TAX, .... .................. .... .. RESPONDENT CIRCLE - 5, AHMEDABAD. APPEARANCES BY: J.M. SHAH FOR THE APPELLANT DINESH SINGH FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : NOVEMBER 1 6 TH , 201 5 DATE OF PRONOUNCING THE ORDER : NOVEMBER 17 TH , 2015 O R D E R PER PRAMOD KUMAR AM: 1. THE SHORT ISSUE THAT WE ARE RE A LLY REQUIRED TO ADJUDICATE IN THIS APPEAL IS WHETHER OR NOT THE LEA RNED CIT(A) WAS JUSTIFIED IN HOLDING THAT EXCISE DU T Y REFUND OF RS.48,30,650/ - , ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CASE, WAS NOT INCLUDIBLE IN PROFIT ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC OF THE INCOME TAX A C T, 1961 ( HEREINAFTER REFERRED TO AS THE ACT ) . THE ASSESSMENT YEAR INVOLVED IS 2000 - 01 AND THE IMPUGNED ORDER IS P A SSE D BY THE LD . CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE ACT. ITA NO .342 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 0 - 01 PAGE 2 OF 6 2. THE ISSUE IN APPEAL LIES IN A VERY NARROW COMPASS OF MATERIAL FACTS. T HE ASSESSEE BEFORE US IS AN EXPORTER AND HE HAD RECEIVED SOME EXCISE DUTY REFUNDS DURING THE RELEVANT PREVIOUS YEAR AGGREGATING TO RS.48,30,650/ - . IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DID NOT TAKE THESE RECEIPTS INTO ACCOUNT, FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECOND 80HHC, ON THE GROUND THAT THE SAID RECEIPTS WERE NOT DERIVED FROM EXPORT BUSINESS. IN APPEAL, HOWEVER, LD . CIT(A) REVERSED THIS ACTION BY OBSERVING THAT THE APPELLANT IS GETTING REIMBURSEMENT FROM THE GOVE RNMENT FOR THE EXCISE DUTY PAID TO THE GOVERNMENT (IN RESPECT OF EXCISE DUTY RELATABLE TO EXPORTS) WHICH IS DISTINGUISHABLE FROM DU TY DRAWBACK AND AS SUCH NOT COVERED BY EXPLANATION (BAA) BELOW SECTION 80HHC (4C). WHEN MATTER TRAVELLED BEFORE CO - ORDINATE BENCH OF THIS TRIBUNAL, THE MATTER WAS REMITTED BACK TO THE FILE OF THE LD . CIT(A) BY OBSERVING AS FOLLOWS : - 18. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD. IT IS NOT IN DISPUTE THAT IN THE REASSESSMENT DATED 14 - 11 - 2 008, THE AO FIRST DECIDED THE OBJECTION OF THE ASSESSEE REGARDING INITIATION OF THE REASSESSMENT PROCEEDINGS AND AT THE END OF THE ASSESSMENT ORDER, HE HAS COMPUTED THE INCOME OF THE ASSESSEE AS PER THE ORDER PASSED UNDER SECTION 154 DATED 26 - 10 - 2006 AT RS .1,47,44,250/ - . NO REASONS HAVE BEEN GIVEN BY THE AO IN THE ASSESSMENT ORDER. THE LEARNED CIT(A) HOWEVER, CONSIDERING THE EXPLANATION OF THE ASSESSEE NOTED THAT THE ASSESSEE WAS GETTING REIMBURSEMENT FROM THE GOVERNMENT OF THE EXCISE DUTY PAID TO THE GOVER NMENT IN RESPECT OF EXCISE DUTY RELATABLE TO THE EXPORTS. THE LEARNED CIT(A) WITHOUT EXAMINING THE ORDER OF THE GOVERNMENT OR RELEVANT MATERIAL NOT ON RECORD DECIDED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THE EXPLANATION (BAA) TO SECTION 80HHC OF TH E I.T. ACT WOULD NOT APPLY TO THE CASE OF THE ASSESSEE. THE LEARNED CIT(A) HAS NOT DECIDED THE APPEAL ON FACTS AND HAS NOT GIVEN ANY FACT FINDING AS TO WHAT WAS THE NATURE OF EXCISE DUTY REBATE/REFUND TO THE ASSESSEE. IT IS ALSO NOT CLEAR WHETHER THE ASSES SEE HAS DEBITED THE EXCISE DUTY OF RS.48,43,146/ - IN THE PROFIT AND LOSS ACCOUNT BEFORE RECEIVING THE AMOUNT OF RS.48,30,650/ - . ON THIS ISSUE, THE ASSESSEE PLEADED BEFORE THE LEARNED CIT(A) AS PER THE DETAILS ENCLOSED, IT HAS PAID EXCISE DUTY OF RS.48,43,4 16/ - DURING THE YEAR. THE DETAILS OF THE SAME FILED AT PAGE NO.52 OF THE PB, HOWEVER, WOULD SHOW THAT THERE ARE SO MANY DETAILS OF EXCISE DUTY WHICH ARE STATED TO BE PAID DURING THE YEAR, BUT ONLY FIVE TO SIX ARE RELEVANT WHICH ARE FALLING IN THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR IN QUESTION. ACCORDINGLY, THE DETAILS FILED AT PB - 52, EXCISE DUTY PAID ON SEVERAL OCCASIONS PERTAINED TO THE YEARS 1997, 1998 AND 1999 PRIOR TO THE ITA NO .342 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 0 - 01 PAGE 3 OF 6 COMMENCEMENT OF THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR IN QUESTION. THEREFORE, IT WOULD SHOW THAT THE LEARNED CIT(A) WITHOUT VERIFYING THE FACTS ALLOWED THE APPEAL OF THE ASSESSEE ON THIS ISSUE. HOWEVER, IT IS CLEAR FROM THE STATEMENT PB - 52 THAT THE DATES OF RECEIPTS OF EXCISE DUTY ARE FALLING IN THE ASSESSMENT Y EAR UNDER APPEAL. THE EXPLANATION (BAA) OF SECTION 80HH (4C) OF THE IT READS AS UNDER: (BAA) 'PROFITS OF THE BUSINESS' MEANS THE PROFITS OF THE BUSINESS AS COMPUTED UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' AS REDUCED BY - (1) NINETY P ER CENT. OF ANY SUM REFERRED TO IN CLAUSES (IIIA), (IIIB), (IIIC), (IIID) AND (IIIE) OF SECTION 28 OR OF ANY RECEIPTS BY WAY OF BROKERAGE, COMMISSION, INTEREST, RENT, CHARGES OR ANY OTHER RECEIPT OF A SIMILAR NATURE INCLUDED IN SUCH PROFITS ; AND (2) THE PROFITS OF ANY BRANCH, OFFICE, WAREHOUSE OR ANY OTHER ESTABLISHMENT OF THE ASSESSEE SITUATE OUTSIDE INDIA ; THE ABOVE EXPLANATION REFERRED TO 90% OF ANY SUM REFERRED TO CLAUSE (IIIA), (IIIB), (IIIC), (IIID) AND (IIIE) OF SECTION 28 AND THE SECTION 28(IIIC ) PROVIDES OF ANY DUTY OF CUSTOM OR EXCISE REPAID OR REPAYABLE AS DUTY DRAW BACK TO ANY PERSONS AGAINST EXPORTS UNDER THE CUSTOMS AND CENTRAL EXCISE DUTIES DRAWBACK RULES, 1971. THE LEARNED CIT(A) HAS ALSO NOT EXAMINED WHETHER CLAIM OF THE ASSESSEE THROUGH WHICH THE EXCISE REBATE WAS RECEIVED WAS FALLING IN ANY OF THE SCHEME AS REFERRED TO IN SECTION 28(IIIC) OF THE I.T. ACT. CONSIDERING THE FACTS OF THE CASE AND IN THE ABSENCE OF ADEQUATE MATERIALS BEFORE THE LEARNED CIT(A), THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION ON THIS ISSUE. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTORE THIS ISSUE TO HIS FILE WITH DIRECTION TO RE - DECIDE THIS ISSUE BY BRINGING ENTIRE FACTS ON RECORD. THE LEARNED CIT(A) SHALL ALSO EXAMINE DATES OF EXCI SE ITA.NO.874 AND 1299/AHD/2010 - 17 - DUTY PAID AND THE RECEIPTS WITH REFERENCE TO THE DETAILS GIVEN IN THE BOOKS OF ACCOUNTS BY THE ASSESSEE IN DIFFERENT ASSESSMENT YEARS. THE LEARNED CIT(A) SHALL ALSO EXAMINE THE ORDER FOR THE CLAIM THROUGH WHICH THE ASSE SSEE RECEIVED THE EXCISE DUTY REBATE/REFUND. THE LEARNED CIT(A) SHALL ALSO EXAMINE WHETHER THE CASE OF THE ASSESSEE WOULD BE FALLING IN SECTION 28(IIIC) OF THE ACT OR NOT. SINCE THE AO HAS NOT GIVEN ANY SPECIFIC FINDING ON THIS ISSUE, THEREFORE, LEARNED CI T(A) BEFORE DECIDING THE ABOVE ISSUE, SHALL GIVE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS WELL AS TO THE AO AND IN CASE ANY NEED ARISES, THE LEARNED CIT(A) MAY CALL FOR REMAND REPORT FROM THE AO. IN VIEW OF THESE OBSERVATIONS, THIS GROUND O F THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. DEPARTMENT S APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 3. THAT S HOW THE LEARNED CIT(A) CAME TO B E IN SE ISIN OF THE MATTER ONCE AGAIN. IN THIS ROUND OF PROCEEDINGS, THE LD. CIT(A) HAS OBSERVED AS FOLLO WS : - ITA NO .342 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 0 - 01 PAGE 4 OF 6 3. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. I HAVE ALSO PERUSED VARIOUS CA S E LAWS RELIED UPON BY THE LD. A.R. AND EVIDENCES FILED BY THE APPELLANT DURING THE APPELLATE PROCEEDING. IT IS SEEN THAT HON BLE ITAT HAS DIRECTED ME TO VERIFY W HETHER EXCISE DUTY REBATE OF RS.48,30,650/ - DECLARED BY THE APPELLANT UNDER THE HEAD INCOME FROM OTHER SOURCES FALLS WITHIN THE AMBIT OF SECTION 28(IIIC) OF THE I. T . ACT. TO GIVE DEFINITE FINDING ON THIS ISSUE, IT WILL BE PERTINENT TO CONSIDER THE EXPRES S PROVISIONS OF SECTION 28(IIIC). FOR THE SAKE OF BREVITY, THESE PROVISIONS A RE REPRODUCED AS UNDER : SECTION 28(IIIC) ANY DUTY OF CU S TOMS OR EXCISE REPAID OR REPAYABLE AS DRAWBACK TO ANY PERSON AGAINST EXPORTS UNDER THE CUSTOMS AND CENTRAL EXCISE DUTY D RAW BACK RULES, 1971. TO CLAIM DEDUCTION U/S. 80HHC ON THESE RECEIPT S , APPELLANT HAS TO STRICTLY FULFIL ALL THE CONDITIONS LAID DOWN UNDER SECTION 28(IIIC) FOR THE FOLLOWING REASONS: 4 . PERUSAL OF EVIDENCES FURNISHED BY THE APPELLANT REVEALS THAT APPELLAN T DO NO T FULFIL THE CONDITIONS LAID DOWN UNDER SE CTION 28(IIIC) FOR THE FOLLOWING REASONS : (I) APPELLANT HAS DECLARED RECEIPTS OF RS.48,30,650/ - UNDER THE HEAD REBATE OF EXCISE DUTY . REBATE IS DIFFERENT THAN EXCISE DUTY REPAID OR REPAYABLE AS DRAW BACK T O ANY PERSON, AS REQUIRED BY THE PROVISIONS OF SECTION 28(IIIC). (II) APPELLANT IS CLAIMING EXCISE DUTY REBATE IN FORM A.R. 4. APPELLANT HAS FAILED TO FILE LEADING EVIDENCES THAT THIS EXCISE DUTY REBATE WAS RECEIVED A S PER THE CUSTOMS AND CENTRAL EXCISE D UTY DRAW BACK RULES , 1971. (III) IT IS NOT KNOWN THAT THE FOREIGN EXCHANGE AGAINST THESE INVOICES WERE RECOVERED WITHIN THE STIPULATED TIME AS REQUIRED BY THE PROVISIONS OF SECTION 80HHC OF THE I.T. ACT. 5. IN VIEW OF THE ABOVE , I AM OF THE CONSIDERED OPIN ION THAT APPELLANT IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S 80HHC ON EXCISE DUTY REBATE SINCE THESE RECEIPTS DO NOT STRICTLY FALLS WITHIN THE PROVISIONS OF SECTION 28(IIIC) OF THE I.T. ACT. APPELLANT HAS A L S O PLACED RELIANCE ON THE CASE OF JAY CHEMICAL IND USTRIES L T D . (SUPRA). PERUSAL OF THIS CASE REVEALS THAT HON BLE ITAT HAS GIVEN FAVOURABLE DECISION TO THE APPELLANT IN VIEW OF THE FACT THAT APPELLANT IN THIS CA S E HAS RECEIVED EXCISE DUTY REFUND AND NOT EXCISE DUTY REBATE. THUS, THE RATIO OF THIS CASE W ILL NOT APPLY IN THE CASE IN HAND. IN VIEW OF THE ABOVE, I HOLD T HAT ITA NO .342 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 0 - 01 PAGE 5 OF 6 APPELLANT IS NOT ENTITLED TO CLAIM DEDUCTION U/S 80HHC ON EXCISE DUTY REBATE OF RS.48,30,650/ - . THAIS G R OUND OF APPEAL IS DISMISSED. 4. THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFO RE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MARTIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 6. WE FIND THAT LEARNED CI T( A ) IS COMPLETELY IN ERROR IN DECLINING THE DEDUCTION UNDER SECTI ON 80HHC, IN RESPECT OF EXCISE DUTY REFUND OF RS.48,30,650/ - , SOLELY ON THE BASIS THAT IT IS NOT COVERED BY SECTION 28(IIIC) OF THE ACT. THE IMPACT OF IT S BEING COVERED BY SECTION 28(III C ) IS INFACT AGAINST THE ASSESSEE INASMUCH AS , BY THE VIRTUE OF EXPL ANATION ( BAA ) BELOW SECTION 80HHC(4C), 90% OF SUCH RECEIPT S ARE TO BE EXCLUDED. NOW THAT THE LEARNED CIT ( A ) HAS CATEGORICALLY HELD THAT THESE RECEIPTS DO NOT STRICTLY FALL WITHIN THE PROVISIONS OF SECTION 28(IIIC) OF THE ACT , THE NATURAL COROLLARY OF TH IS FINDING IS THAT 90% OF EXCISE DUTY REFUND IS NOT TO BE DEDUCTED WHILE COMPUTING DEDUCTION UNDER SECTION 80HHC OF THE ACT PRECISELY WHAT WAS DONE BY THE ASSESSING OFFICER. WE HAVE ALSO NOTED, A S EVIDENT FROM MATERIAL ON RECORD, THAT EXCISE DUTY REFUND REPRESENTS REFUND OF SUCH EXCISE DUTY A S IS PAID WITH RESPECT TO PRODUCTION WHICH IS EVENTUALLY EXPORTED. IN THIS VIEW OF THE MATTER, EXCISE DUTY REFUND CANNOT BE VIEWED AS A STANDALONE INCOME AND IS TO BE VERY MUCH INCLUDED IN ELIGIBLE PROFITS. THEREFO RE, LEARNED CIT ( A ) WAS IN ERROR IN EXCLUDING THE SAME FROM PROFITS ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC. ACCORDINGLY, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO INCLUDE THIS AMOUNT OF RS.48,30,650/ - IN PROFITS ELIGIB LE FOR DEDUCTION UNDER SECTION 80HHC. THE ASSESSEE SUCCEEDS IN THIS POINT. ITA NO .342 /AHD/ 20 1 2 ASSESSMENT YEAR: 2 0 0 0 - 01 PAGE 6 OF 6 7. NO OTHER GRIEVANCE WAS PRESSED BEFORE US. 8. IN THE RESULT, THE APPEAL IS ALLOWED IN T HE TERMS INDICATED ABOVE. P RONOUNCED IN THE OPEN COURT ON THIS 17 TH D AY OF NOVEMBER , 2015. SD/ - SD/ - KUL BHARAT PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD , THE 1 7 TH DAY OF NOVEMBER , 201 5 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CO MMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD