ACIT, New Delhi V. M/s. Teletule Electronics Ltd., New Delhi

ITA 3505/DEL/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2321 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 09-12-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 27-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S SOHTA
• Section: 80HHC; 115JB

Judgement Text

ITA NO. 3505/DEL/08 A.Y. 2003-04 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH H: NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 3505/DEL/2008 A.Y. : 2003-04 ASSTT. COMMISSIONER OF INCOME TAX, M/S TELETUBE ELECTRONICS LTD., CIRCLE 16(1), NEW DELHI VS. 6 TH FLOOR, TDI CENTER, DISTT. CENTRE, JASOLA, NEW DELHI- 110 025 (PAN: AAACT0626Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SH. G.S. SOHTA, SR. DR O R D E R PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDERS OF THE LD. CIT(A) DATED 16.9.2008 AND PERTAINS TO A SSESSMENT YEAR 2003-04. 2. THE ISSUE RAISED IS THAT THE LD. CIT(A) HAS ERR ED IN ALLOWING DEDUCTION UNDER SECTION 80HHC FROM THE BOO KS PROFIT COMPUTED U/S 115JB OF THE IT ACT. 3. THE AO IN THIS CASE HELD THAT PROFIT MUST BE TAK EN TO BE THE POSITIVE PROFIT AND NOT LOSS AND HENCE HE HELD THAT THE ASSESSEE COMPANY IS NOT ENTITLED TO ANY DEDUCTION U NDER SECTION 80HHC. ITA NO. 3505/DEL/08 A.Y. 2003-04 2 4. UPON AOS DISALLOWANCE IN THE PRESENT CASE THE LD. CIT(A) REFERRED THE DECISION OF THE SPECIAL BENCH OF THE T RIBUNAL IN THE CASE OF DCIT VS. SYNCOME FORMULATIONS (I) LTD. 292 ITR AT 144 AND HELD THAT THE CLAIM OF THE ASSESSEE WITH REGARD TO DEDUCTION UNDER SECTION 80HHC FROM THE BOOK PROFITS IS TO BE ALLOWED. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORDS . NONE APPEARED ON BEHALF OF THE ASSESSEE. IT TRANSPIRE S THAT HONBLE BOMBAY HIGH COURT IN 318 ITR 252 HAD OVERRULED THE DECISION OF THE SPECIAL BENCH IN THE SYNCOME FORMULATIONS (I ) LTD. AND HELD THAT IT WAS NOT POSSIBLE TO ACCEPT THE CONSTRU CTION THAT THE MAT COMPANIES SHOULD BE TREATED ON A DIFFERENT FOO TING IN COMPUTING EXPORT PROFITS UNDER SECTION 80HHC FOR TH E PURPOSE OF SECTION 115JB. 6.1 IN THIS REGARD, WE ALSO FIND THAT HONBLE MADRA S HIGH COURT IN THE CASE OF CIT VS. MEGNA ELECTRO CASTINGS LTD. 184 TAXMAN 79 AND CIT VS. KG DENIN LTD. 180 TAXMAN 590 HAS HELD THAT IN CASE OF MAT ASSESSMENT DEDUCTION UNDER SECTION 80 HHC IS TO BE WORKED OUT ON THE BASIS OF ADJUSTED BOOK PROFIT UNDER SECTION 115JA AND NOT ON THE BASIS OF PROFIT COMPUTED UNDER REGULAR PROVISIONS OF LAW APPLICABLE TO COMPU TATION OF PROFITS AND GAINS OF BUSINESS AND PROFESSION. ITA NO. 3505/DEL/08 A.Y. 2003-04 3 6.2 NOW CONSIDERING THE ABOVE, WE FIND THAT THERE I S HONBLE MUMBAI HIGH COURT DECISION IN WHICH THE ISSUE IS D ECIDED AGAINST THE ASSESSEE AND THERE ARE ALSO DECISIONS OF THE HONBLE MADRAS HIGH COURT WHICH ARE IN FAVOUR OF T HE ASSESSEE. NO DECISION, DIRECT ON THE POINT, OF H ONBLE JURISDICTIONAL HIGH COURT HAS BEEN BROUGHT TO OUR N OTICE. UNDER SUCH CIRCUMSTANCES, WE REFER TO THE HONBLE A PEX COURT DECISION IN THE CASE OF M/S VEGETABLE PRODUCTS LTD. 88 ITR 192, THAT IN THE TAXING PROVISION IF TWO CONSTRUCTIONS ARE POSSIBLE, ONE FAVOURING ASSESSEE SHOULD BE ADOPTED. 6.3 RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT AND FOLLOWING THE HONBLE MADRAS HIGH COURT DECISION, WE DECIDE T HIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/12/2009 AFTER CONCLUSION OF THE HEARING. SD/- SD/- [R.P. TOLANI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09/12/2009 SRB COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3.CIT 4. CIT (A ) 5. DR, ITAT TRUE COPY BY ORDER, DR, ITAT, DELHI BENCH