ITO, UDAIPUR V. M/s. Aravali Minerals & Chemicals Industries Pvt. Ltd., UDAIPUR

ITA 352/JODH/2007

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54326 (ITAT-JODHPUR)
• Duration Of Justice: 4 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-07-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 04-05-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K R MEENA
• Keywords: Opportunity of being heard
• Section: 80HHC; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ JODHPUR BENCH, JODHPUR ] BEFORE SHRI RAJPAL YADAV, JM AND SHRI K. D. RAN JAN, AM I. T. APPEAL NO. 352 (JODH.) OF 2007. ASSESSMENT YEAR : 200405. THE INCOME-TAX OFFICER, M/S. ARAVALI MINERA LS AND CHEMICALS W A R D : 1 (1), VS. I NDUSTRIES PVT. LTD., U D A I P U R. B 132, M I A, M A D R I, U D A I P U R . P A N / G I R NO. AAB CA 2423 R. ( APPELLANT ) ( RESPOND ENT ) ASSESSEE BY : SHRI AMIT KOTHARI, ADV.; DEPARTMENT BY : SHRI K. R. MEENA [CIT] D. R.; O R D E R. PER K. D. RANJAN, AM : THIS APPEAL FILED BY THE REVENUE FOR ASSESSMENT YEA R 2004-05 ARISES OUT OF THE ORDER OF THE LD. CIT (APPEALS), UDAIPUR. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS FOLLOWS:- ON THE FACTS AND IN THE PRESENT CIRCUMSTANC ES OF THE CASE, THE LD. CIT (APPEALS) HAS ERRED IN :- 1) DELETING THE ADDITION OF RS.20,99,758/- ON ACCOUNT OF EXPORT SALES OF MARBLE BLOCKS MADE OUT OF UNDISCLOSED PURCHASES; 2) DELETING THE ADDITION OF RS.17,52,549/- ON ACCOUNT OF UNDISCLOSED CLOSING STOCK OF MARBLE BLOCKS; 2 I. T. APPEAL NO. 352 (JODH.) OF 2007. 3) ALLOWING THE DEDUCTION UNDER SECTION 80-HHC ON EXPO RT OF MARBLE BLOCKS IGNORING THE FACTS THAT IN VIEW OF CIRCULAR NO. 693 DATED 17/11/1994 THERE WAS NO SUBSTANTIAL VALUE ADDITION; 4) DELETING THE ADDITION OF RS.2,90,046/- UNDER SECTIO N 43-B ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO PF AN D ESI. 3. SUBSEQUENT TO THE FILING OF THE APPEAL, THE REVE NUE RAISED ADDITIONAL GROUND AS UNDER:- 5) WITH PREJUDICE TO THE ABOVE GROUNDS OF APPEAL , IF THE DEDUCTION UNDER SECTION 80-HHC IS DIRECTED TO BE ALLOWED, IT SHOULD BE ALLOWED AFTER REDUCING DEDUCTION UNDER SECTION 80-IB ON THE SAME INCOME. 4. THE FIRST ISSUE FOR OUR CONSIDERATION RELATES TO DELETING THE ADDITION OF RS.20,99,758/- ON ACCOUNT OF EXPORT SALES OF MARBLE BLOCKS. THE ASSE SSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS PREPARED A CHART FOR OPENING STOCK OF M ARBLE BLOCK, PURCHASE OF BLOCKS AND SALE OF BLOCKS DURING THE YEAR UNDER CONSIDERATION. AS PER THE CHART, THE OPENING STOCK AS ON 1/04/2003 WAS NIL. THE ASSESSEE MADE EXPORT SALES OF 5 BLOCK S ON 15/07/2003 VALUED AT RS.6,55,534/-. LIKEWISE, ON 21 ST JULY, 2003, TWO BLOCKS WERE SOLD FOR RS. 3,98,152/ -. ON 21 ST AUGUST, 2003 THE OPENING STOCK OF MARBLE BLOCKS WAS 7 WHEREAS ASSESS EE MADE SALES OF 34 BLOCKS. THUS, 27 MARBLE BLOCKS WERE SOLD OUT OF PURCHASES NOT RECORD ED IN THE BOOKS OF ACCOUNTS, THE VALUE THEREOF WAS RS.10,46,172/-. AGAIN ON 31 ST MARCH, 2004 THE OPENING STOCK OF MARBLE BLOCKS WAS 22 AND THE ASSESSEE MADE PURCHASE OF 17 BLOCKS OUT OF WHICH THE SALES OF TWO BLOCKS WAS MADE LEAVING CLOSING BALANCE OF 37 MARBLE BLOCKS VALUING AT RS.18,32,549/-. THE ASSESSEE HAD SHOWN CLOSING STOCK OF 3 BLOCKS VALUED AT RS.40,000/-. 5. IN RESPONSE TO QUERY RAISED BY THE AO IT WAS S TATED THAT THE ASSESSEE PURCHASED VIDE INVOICE NO. 60 DATED 19/07/2003 VIDE WHICH 5 MARBLE BLOCKS WERE PURCHASED. THESE MARBLE BLOCKS WERE PURCHASED DURING 9/7/2003 TO 12/07/2003 . THE BILL WAS PREPARED ON 19/7/2003 BUT THE GOODS HAD ACTUALLY BEEN RECEIVED UPTO 12 TH JULY, 2003 I.E. PRIOR TO EXPORT OF GOODS ON 15/7/0 3. 3 I. T. APPEAL NO. 352 (JODH.) OF 2007. THERE WAS NO SHORTAGE OF BLOCK AS ON 15.07.2003. W ITH REGARD TO EXPORT OF TWO MARBLE BLOCKS VIDE EXPORT INVOICE NO. 2 DATED 21 ST JULY, 2003 THE ASSESSEE PURCHASED TWO MARBLE BLOCK S VIDE INVOICE NO. 61 DATED 19/7/2003 FROM M/S. MAHABIR TR ADING COMPANY, UDAIPUR. THE BILL WAS ENTERED INTO BOOKS OF ACCOUNTS ON 25TH JULY, 2003 B UT THE ACTUAL PURCHASE WAS MADE ON 19.07.2003 WHICH WAS PRIOR TO THE RAISING OF THE BI LL FOR EXPORT SALES AND AS SUCH THERE WAS NO DISCREPANCY IN THE EXPORT SALES VIDE INVOICE NO. 2 DATED 21-7-2003. THE ASSESSEE FURTHER EXPLAINED GIVING THE DETAILS OF 34 BLOCKS PURCHASED ON VARIOUS DATES FROM DIFFERENT PARTIES. THE SAID BLOCKS WERE PURCHASED FROM 20 TH JULY, 2003 TO 14 TH AUGUST, 2003 EXCEPT ONE BLOCK WHICH WAS PURCHASED ON 17/01/2003 FROM M/S. S. C. JAIN & BROS. THE ASSESSEE HAD MADE ENTRIES IN THE BOOKS OF ACCOUNTS AFTER 21 ST AUGUST, 2003. IT WAS ALSO SUBMITTED THAT ALL THE PURCHASES WERE SUPPORTED BY BILLS AND EXPORTED GOODS WERE NONE ELS E THAN STATED AND AS SUCH THERE WAS NO BASIS FOR HOLDING THE ABOVE EXPORT SALES OUT OF PURCHASES NOT RECORDED IN THE BOOKS OF ACCOUNTS. THE AO CONSIDERED THE EXPLANATION OF THE ASSESSEE. HOW EVER, HE REJECTED THE EXPLANATION OFFERED BY THE ASSESSEE ON THE GROUND THAT THE EXPORT SALES WE RE NOT SUPPORTED WITH THE ENTRIES RECORDED IN THE BOOKS OF ACCOUNTS. THE SALES WERE MADE OUT OF PURCHASES NOT DISCLOSED IN THE BOOKS OF ACCOUNTS. HE, THEREFORE, ADDED THE AMOUNT OF RS.20 ,99,758/-. 5. BEFORE THE LD. CIT (APPEALS) THE ASSESSEE REITER ATED THE SAME SUBMISSIONS WHICH WERE MADE BEFORE THE ASSESSING OFFICER. IT WAS ALSO SUB MITTED THAT THE ASSESSEE HAD MANUFACTURED MARBLE SLABS OUT OF MARBLE BLOCKS AND EXPORT SALES OF MARBLE SLABS ON 4/08/2003 AND 10/03/2004 WERE OUT OF MANUFACTURED GOODS. IN RESPECT OF THIS CONTENTION, THE LD. AR OF THE ASSESSEE PRODUCED RG-1 REGISTER AND FILED A COPY OF THE SAME . IT WAS, THEREFORE, SUBMITTED THAT THE AO HAD MADE ADDITION WITHOUT ANY BASIS AND ON MERE PRE SUMPTION. THE LD. CIT (A) AFTER GOING THROUGH THE DETAILS FURNISHED BY THE ASSESSEE IN RE SPECT OF THREE EXPORT INVOICES WHICH INCLUDE CERTIFICATE OF ORIGIN, BILL OF LADING, PURCHASE BIL LS ALONG WITH MARBLE BILLING DETAILS FOR THE MONTH OF JULY, RECEIPTS BY KRISHNA CLEARING AGENCY, GANDH I DHAM, KUTCH. HE FURTHER DESCRIBED THE PURCHASE PROCEDURE ADOPTED BY INTERESTED FOREIGN BU YERS SUCH AS INSPECTION OF THE MARBLE BLOCKS, PUTTING MARBLE BLOCK NO. ETC. AFTER COMPLETING THE SE FORMALITIES THE EXPORT INVOICES WERE PREPARED IN THE NAME OF FOREIGN BUYER. THE EXPORT INVOICE CONTAINED THE BLOCK NUMBER, NUMBER 4 I. T. APPEAL NO. 352 (JODH.) OF 2007. OF MARBLE BLOCKS, DESCRIPTION OF GOODS, QUANTITY OF WEIGHT AND RATE PER TONNE. LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER:- THE A/R HAS FURNISHED THE COPY OF EXPORT INVOICE D ATED 15/7/2003, CERTIFICATE OF ORIGIN DATED 26/8/2003, BILL FOR LADING DATED 27/8/2003, P URCHASE BILL DATED 19/7/2003 ALONG WITH MARBLE BILLS DETAILS FOR THE MONTH OF JULY, 20 03, RECEIPTS BY KRISHNA CLEARING AGENCY, GANDHIDHAM, KACHH DATED 10/7/2003, 11/7/200 3, 13/7/2003, 14/7/2003 AND 15/7/2003 FOR FIRST FIVE MARBLE BLOCK NOS. GMI 91, 92, 94, 95 AND GMI 93, COPY OF EXPORT INVOICE DATED 21/7/2003, PACKING LIST DATED 21/7/20 03, CUSTOM CLEARANCE DATED 23/7/2003, CERTIFICATE OF ORIGIN DATED 26/8/2007, B ILL OF LADING DATED 27/8/2003, PURCHASE BILL DATED 19/7/2003, MARBLE BILLING DETAILS FOR TH E MONTH OF JULY, 2003, RECEIPT BY KRISHNA CLEARING AGENCY RECEIPT DATED 18/7/2003 FOR TWO BLOCKS NO. LA 83 AND LA 84. AGAIN EXPORT INVOICE DATED 21/8/2003, PACKING LIST DATED 21/8/2003, CERTIFICATE OF ORIGIN DATED 26/8/2003, BILL OF LADING DATED 27/8/2003, PU RCHASE BILL ALONG WITH PURCHASE DETAILS DATED 17/7/2003, 20/7/2003, 23/7/2003, 24/7 /2003, 7/8/2003, 11/8/2003, BILLING DETAILS FOR THE MONTH OF JULY, 2003, COPY OF PURCHA SE BILL DATED 14/8/2003, RECEIPT OF KRISHNA CLEARING AGENCY RECEIPT DATED 18/7/2003, 19 /7/2003, 20/7/2003, 21/7/2003, 25/7/2003 AND 27/7/2003 FOR 27 MARBLE BLOCKS. HAVING GONE THROUGH THE ABOVE DETAILS IT IS FOUND T HAT THE INTERESTED FOREIGN BUYER VISITS THE FACTORY OF THE EXPORTER, INSPECTS THE MARBLE BL OCKS, PUTS MARBLE BLOCK NO. BEING SATISFIED WITH THE QUALITY AND OTHER THINGS ABOUT T HE BLOCK. AFTER COMPLETING THESE FORMALITIES THE EXPORT INVOICES PREPARED IN THE NAM E OF THE FOREIGN BUYER / IMPORTER. THIS EXPORT INVOICE CONTAINS THE BLOCK NO., NUMBER OF BL OCKS, DESCRIPTION OF GOODS, QUANTITY / WEIGHT AND RATE PER TON IN US $. THE BLOCK IS PACK ED AND IT CONTAINS THE SAME BLOCK NO., KIND OF PACKAGE, NUMBER OF BLOCKS, MEASUREMENT CBM / WEIGHT AND DESCRIPTION OF GOODS. AFTER THAT THE MARBLE BLOCKS ARE SENT TO THE KANDLA PORT THROUGH TRUCKS. THE CUSTOM CLEARANCE AGENTS RECEIVES THE MARBLE BLOCKS AND ISS UE A CERTIFICATE IN THIS REGARD MENTIONING THE COMMODITY, TRUCK NO., NUMBER OF BLOC KS, UNLOADED AT, GATE PASS NO., DATE, GATE PASS WEIGHT, GROSS WEIGHT AT KANDLA, TARE WEIG HT AND NET WEIGHT, SAME BLOCK NO. 5 I. T. APPEAL NO. 352 (JODH.) OF 2007. AND EXPORTERS NAME. THE CUSTOM DEPARTMENT ISSUES THE CLEARANCE CERTIFICATE AFTER COMPLETING ALL THE FORMALITIES. THIS CLEARANCE CER TIFICATE ALSO MENTIONS THE SAME NUMBER OF MARBLE BLOCKS AS MENTIONED IN EXPORT INVOICE, CL EARING CERTIFICATE, PACKING LIST AND ALL THE OTHER DETAILS. THE CERTIFICATE OF ORIGIN ISSUE D BY GANDHIDHAM CHAMBER OF COMMERCE AND INDUSTRIES ALSO CONTAINS THE SAME BLOCK NOS. AN D OTHER DETAILS. SIMILARLY BILL OF LADING IS PREPARED BY SHIPPING AGENCY AND IT MENTIO NS THE SAME MARBLE BLOCK NO. AND ALL THE OTHER DETAILS. AFTER COMPLETING ALL THE FORMAL ITIES FROM PREPARING THE EXPORT BILL TO BILL OF LADING THE PURCHASE INVOICE IS PREPARED BY THE SELLER CONTAINING THE DATE, NAME AND ADDRESS OF THE PURCHASER I.E. EXPORTER, NUMBER OF MARBLE BLOCKS, DESCRIPTION OF GOODS, QUANTITY, RATE. THE BILLING DETAILS CONTAIN S S. NO., DATE, GATE PASS NO., VEHICLE NO., MARBLE BLOCK NO. GIVE BY SELLER, BUYERS MARK I.E. IMPORTERS MARK AND WEIGHT. THE CLEARANCE CERTIFICATE ISSUED BY THE CLEARING AGENCY ALSO CONTAINS THE NAME AND ADDRESS OF THE EXPORTER, COMMODITY, TRUCK NO. NUMBER OF BLOCKS , GATE PASS NO., DATE AND THE SAME MARBLE BLOCK NOS. THE APPELLANT HAS FOLLOWED THIS METHOD OF EXPORTING THE BLOCKS AND PREPARING THE PURCHASE BILL AFTER COMPLETION OF ALL THE FORMALITIES I.E. AFTER LAST STAGE OF BILL OF LADING TAKING PURCHASE BILL FROM THE SELLER AND THEN MAKING ENTRY INTO THE BOOKS OF ACCOUNT. THIS METHOD HAS BEEN FOLLOWED BY THE APPE LLANT FROM THE VERY BEGINNING OF THE YEAR WHEN THE EXPORT HAS BEEN STARTED TILL DATE. T HE SAME PRACTICE IS FOLLOWED IN THIS TRADE OF EXPORTING THE MARBLE BLOCKS BY OTHER EXPOR TERS ALSO. IT IS EVIDENT FROM THE ABOVE FACTS THAT WHEN PURCHASING THE MARBLE BLOCKS THE SA ME CANNOT BE EXPORTED. IN THE CASE OF THE APPELLANT THE MARBLE BLOCKS HAS EXPORTED NOT OU T OF UNACCOUNTED PURCHASE / STOCK BUT THE BLOCKS WERE ALREADY IN POSSESSION OF THE APPELL ANT AND PASSED THROUGH VARIOUS STAGES OF EXPORT. THUS THE PURCHASE AND CLOSING STOCK ALS O IS EXPLAINED WITH NECESSARY DOCUMENTARY EVIDENCE. THERE IS NO UNACCOUNTED STOC K OF MARBLE BLOCKS AS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THE ADDITION MADE BY THE ASSESSING OFFICER IS, THEREFORE, DELETED. THE APPEAL IS ALLOWED ON T HIS GROUND. 6. BEFORE US THE LD. SR. DR SUBMITTED THAT RG1 REGI STER WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER. IT WAS PRODUCED FOR THE FIRST T IME BEFORE THE LD. CIT (APPEALS). THE LD. CIT (A) HAD ACCEPTED THE CONTENTION OF THE ASSESSEE WIT HOUT AFFORDING OPPORTUNITY TO THE ASSESSING 6 I. T. APPEAL NO. 352 (JODH.) OF 2007. OFFICER. HE FURTHER SUBMITTED THAT THE ASSESSEE HA D EXPORTED THE MARBLE BLOCKS AND THERE IS NO DISPUTE ABOUT THIS FACT. HOWEVER, THERE WAS SHORTA GE OF STOCK AS DISCUSSED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THEREFORE, THE AS SESSING OFFICER SHOULD BE GIVEN OPPORTUNITY TO EXAMINE THE CONTENTION OF THE ASSESSEE. ON THE OTH ER HAND, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THERE WAS NO SHORTAGE OF STOCK. THE LD. AR OF THE ASSESSEE REFERRING TO PAGE NO. 13 OF PAPER BOOK SUBMITTED THAT THE ASSESSEE PURCHASED 5 BLOCKS FROM MAHABIR TRADING COMPANY IN THE MONTH OF JULY, 2003. THE ASSESSEE FILED RECEIPT OF BLOCKS ON DIFFERENT DATES FROM KRISHNA CLEARING AGENCY GIVING DETAILS OF WEIGHT OF EACH BL OCK. IT WAS FURTHER SUBMITTED THAT THERE WAS NO SHORTAGE OF STOCK. THE ASSESSEE WAS PURCHASING GOODS FROM VARIOUS PERSONS AND THE SAME WERE SENT ON BEHALF OF THE ASSESSEE TO THE CLEARING AGENT FOR THE PURPOSE OF EXPORT OUTSIDE INDIA. 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE ORDER OF THE LD. CIT (APPEALS) IT APPEARS THAT THE ASSESSEE HAD BEEN PURCHASING BLOCK OF MARBLES ON DIFFERENT DATES FROM SEVERAL PARTIES AND THEY WERE SENT DIRECTLY TO CLEARING AGENTS, THE RECEIPT THEREOF HAS BEEN ADMITTED BY THE CLEARING A GENT. THE LD. CIT (A) WHILE ALLOWING THE RELIEF HAS MENTIONED THE PROCEDURE FOLLOWED BY THE ASSESSEE AND THE DOCUMENTS REQUIRED FOR THE PURPOSE OF EXPORT OUTSIDE INDIA. HOWEVER, HE HAS N OT GIVEN ANY WORKING AS TO HOW THE PURCHASES OF THE MARBLE BLOCKS FROM DIFFERENT PARTIES HAD BEE N RECONCILED. WE, THEREFORE, SET ASIDE THE ISSUE TO THE FILE OF THE AO WHO WILL EXAMINE THE CO NTENTION OF THE ASSESSEE AND VERIFY THE EVIDENCE FILED BEFORE THE LD. CIT (APPEALS). IF TH E ASSESSEE HAD MADE PURCHASES BEFORE THE DATE OF EXPORTS OF MARBLE BLOCKS, THE CLAIM OF THE ASSES SEE HAD TO BE ALLOWED. THE LD. AO WILL DECIDE THE ISSUE ON MERITS AFTER AFFORDING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 8. THE NEXT ISSUE FOR CONSIDERATION RELATES TO DELE TING THE ADDITION OF RS.17,52,549/- ON ACCOUNT OF UNDISCLOSED CLOSING STOCK OF MARBLE BLOC KS. ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE HAS CLOSING STOCK OF 3 MARBLE BLOCKS WHICH WAS VALUED FOR RS.40,000/-. HOWEVER, THE AO NOTED THAT THE CLOSING STOCK SHOULD HAVE BEEN OF 37 BLOCKS. HE, THEREFORE, MADE ADDITION OF RS.17,52,549/- ON ACCOUNT OF VALUATION OF THE CLOSI NG STOCK OF BLOCKS. BEFORE THE LD. CIT (APPEALS) IT WAS SUBMITTED THAT THE ASSESSEE MADE P URCHASES OF 34 BLOCKS. IT WAS ALSO SUBMITTED 7 I. T. APPEAL NO. 352 (JODH.) OF 2007. THAT THE ASSESSEE HAD ALSO MANUFACTURED MARBLE SLAB S OUT OF MARBLE BLOCKS AND EXPORT SALES OF MARBLE SLABS ON 4/8/2003 AND 10/03/2004 WERE OUT OF MANUFACTURED GOODS. THE ASSESSEE PRODUCED RG1 REGISTER AND FILED THE COPY OF THE SAM E WHICH DEPICTED THAT EXPORT SALES HAVE BEEN AFFECTED THROUGH MANUFACTURED GOODS. THERE WA S NO DISCREPANCY IN THE CLOSING STOCK. THE LD. CIT (A) ON THE BASIS OF REASONING GIVEN IN RESP ECT OF GROUND NO. 1, THE ADDITION WAS DELETED BY OBSERVING THAT THERE WERE NO UNDISCLOSED PURCHAS ES. 9. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. SINCE WE HAVE SET ASIDE THE ISSUE RELATING TO EXPORT OF M ARBLE BLOCKS AND SINCE THE LD. CIT (A) HAS DELETED THE ADDITION BASED ON THE REASONS GIVEN FOR EXPORT OF MARBLE BLOCKS, WE FEEL IT PROPER TO SET ASIDE THIS ISSUE ALSO TO THE FILE OF THE ASSESS ING OFFICER WITH THE DIRECTION TO EXAMINE THE CLAIM OF THE ASSESSEE AND DECIDE THE ISSUE AFRESH. 10. THE NEXT ISSUE FOR CONSIDERATION RELATES TO ALL OWANCE OF DEDUCTION UNDER SECTION 80-HHC ON EXPORT OF MARBLE BLOCKS. THE ASSESSING OFFICER DISALLOWED CLAIM OF DEDUCTION UNDER SECTION 80-HHC ON THE BASIS OF DISCUSSION MADE IN THE ASSES SMENT ORDER FOR THE ASSESSMENT YEAR 2001-02. BEFORE THE LD. CIT (APPEALS) IT WAS SUBMI TTED THAT THE ITAT HAS ALLOWED DEDUCTION FOR ASSESSMENT YEAR 2001-02 AND, THEREFORE, THE ASSESSE E IS ENTITLED FOR DEDUCTION UNDER SECTION 80-HHC. THE LD. CIT (A) ALLOWED THE CLAIM OF THE A SSESSEE ON THE BASIS OF DECISION OF ITAT FOR ASSESSMENT YEAR 2001-02. 11. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ITAT, JODHPUR BENCH IN THE CASE OF AS SESSEE REPORTED IN 108 I.T.D. 163 FOR ASSESSMENT YEAR 2001-02 HAS HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 80HHC ON EXPORT OF PROCESSED MARBLE AS THE EXPORTER HAD SATISFIED THAT THE MARBLE RECEIVED BY IT WERE MANUALLY POLISHED ON THE ONE SIDE AS PER ITS I NSTRUCTIONS AND THE CUTTING AND THE POLISHING DONE BY THE ASSESSEE HAS HIGHER PROFIT INDICATING H IGH-VALUE ADDITION. SINCE ITAT, JODHPUR BENCH IN ASSESSEES OWN CASE HAS ALLOWED DEDUCTION UNDER SECTION 80HHC, RESPECTFULLY FOLLOWING THE DECISION OF THE ITAT IN ASSESSEES OW N CASE IT IS HELD THAT THE ASSESSEE IS ELIGIBLE 8 I. T. APPEAL NO. 352 (JODH.) OF 2007. FOR DEDUCTION UNDER SECTION 80-HHC ON EXPORT OF MAR BLE BLOCKS AS THE FACTS ARE IDENTICAL TO THE FACTS FOR ASSESSMENT YEAR 2001-02 AND NO MATERIAL H AS BEEN BROUGHT TO DISTINGUISH THE FACTS. 12. THE NEXT ISSUE FOR CONSIDERATION RELATES TO DEL ETING THE ADDITION OF RS.2,90,046/- UNDER SECTION 43-B ON ACCOUNT OF DELAYED PAYMENT OF EMPLO YEES CONTRIBUTION TO PROVIDENT FUND AND ESI. THE LD. CIT (APPEALS) DELETED THE ADDITION RE LYING ON THE DECISION OF THE ITAT IN ASSESSEES OWN CASE. 13. WE HAVE HEARD BOTH THE PARTIES. WE FIND THAT T HE PAYMENTS ON ACCOUNT OF PROVIDENT FUND AND ESI HAVE BEEN MADE BEFORE THE DUE DATE OF FIL ING OF THE RETURN OF INCOME. HONBLE SUPREME COURT IN THE CASE OF CIT VS. VINAY CEMENT L TD. 213 CTR (SC) 268 HAS HELD THAT THE DISALLOWANCE UNDER SECTION 43-B ON ACCOUNT OF CONTR IBUTION TO PROVIDENT FUND COULD NOT BE MADE WHEN CONTRIBUTIONS HAVE BEEN MADE BEFORE FILING OF RETURN OF INCOME. THE DECISION OF HONBLE GAUHATI HIGH COURT IN THE CASE OF GEORGE WILLIAMSON S (ASSAM) LTD. 284 ITR 619 WAS AFFIRMED BY HONBLE SUPREME COURT. SINCE THE ISSUE IS SQUAR ELY COVERED BY THE DECISION OF HONBLE SUPREME COURT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT (APPEALS) DELETING THE ADDITION. 14. THE LAST ISSUE FOR CONSIDERATION RELATES TO ALL OWANCE OF DEDUCTION UNDER SECTION 80-HHC AFTER REDUCING THE CLAIM OF DEDUCTION UNDER SECTION 80-IB ON THE SAME INCOME. DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE OBJEC TED TO ADMISSION OF ADDITIONAL GROUND. HE SUBMITTED THAT THERE IS CONFLICT OF OPINION ON THE ISSUE AND, THEREFORE, ADDITIONAL GROUNDS OF APPEAL SHOULD NOT BE ADMITTED. ON THE OTHER HAND, THE LD. SR. DR RELIED ON THE DECISION OF ITAT, JODHPUR BENCH IN THE CASE OF ACIT VS. M/S. SECURE M ETERS LTD. DATED 24/08/2007 IN ITA. NO. 457 (JU) OF 2006 WHEREIN DECISION OF SPECIAL BENCH IN THE CASE OF ROGINI GARMENTS HAS BEEN FOLLOWED. THE LD. SR. DR FURTHER SUPPORTED HIS CLA IM BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NTPC VS. CIT 229 ITR 383 (SC). THE LD. SR. DR ALSO RELIED ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. ROCHI RAM & SONS 271 ITR 444 (RAJ). 9 I. T. APPEAL NO. 352 (JODH.) OF 2007. 15. WE HAVE HEARD BOTH THE PARTIES AND HAVE GONE TH ROUGH THE ASSESSMENT ORDER CAREFULLY. FROM THE ASSESSMENT ORDER WE FIND THAT THE ASSESSIN G OFFICER HAD DISALLOWED THE CLAIM FOR DEDUCTION UNDER SECTION 80-HHC OF THE ACT ON THE GR OUND THAT SIMPLY DRESSING OR SMOOTHENING THE SURFACE OF THE MARBLE BLOCK WOULD NOT MEAN THAT IT HAS BEEN POLISHED AS PER REQUIREMENT OF ITEM NO (X) OF THE TWELFTH SCHEDULE IN THE I. T. ACT. THE ASSESSING OFFICER HAD ALSO DISALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 80-IB ON THE G ROUND THAT THE UNIT WAS ENGAGED IN MINING; AND DEDUCTION UNDER SECTION 80-IB WAS NOT ADMISSIBL E IN CASE OF MARBLE PRODUCERS. WHEN THE ASSESSING OFFICER HAD DISALLOWED BOTH THE DEDUCTION S, QUESTION OF CONSIDERING THE REDUCTION OF AMOUNT OF DEDUCTION UNDER SECTION 80IB FOR THE PURP OSE OF COMPUTATION OF DEDUCTION UNDER SECTION 80HHC COULD NOT HAVE ARRIVED BEFORE THE ASS ESSING OFFICER. THE LD. CIT (A) HAS, HOWEVER, ALLOWED BOTH THE DEDUCTIONS. THERE IS NO DISPUTE ABOUT THE FACT THAT THE LD. CIT (A) HAS POWER OF ENHANCEMENT. IT IS ALSO A FACT THAT AFTER 1/06/2001 POWER OF THE LD. CIT (A) TO SET ASIDE THE ASSESSMENT TO THE FILE OF THE AO HAS BEEN WITHD RAWN MEANING THEREBY THAT HE HAD TO DECIDE APPEAL ON MERITS. THEREFORE, IT WAS THE DUTY OF TH E LD. CIT (A) TO HAVE CONSIDERED THE PROVISIONS OF SECTION 80IA (9) OF THE ACT. THE CLAIM FOR DEDU CTION UNDER SECTION 80-HHC IS A LEGAL ISSUE, WHICH CAN BE RAISED AT ANY TIME BEFORE ANY APPELLAT E AUTHORITY, AS HELD BY HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. (SUPRA) PROVIDED ALL FACTS ARE AVAILABLE ON RECORD. IN THE INSTANT CASE, THE DEDUCTION ALLOWABLE UNDER SECTION 80IB AN D PROFITS OF BUSINESS ARE AVAILABLE ON RECORD. IT IS ALSO A FACT THAT HONBLE RAJASTHAN HIGH COURT IN THE CASE OF ROCHI RAM & SONS (SUPRA) HAS HELD THAT PROVISIONS OF SECTION 80IA (9) ARE APPLIC ABLE FROM 1/04/1999. WE, THEREFORE, ADMIT THE ADDITIONAL GROUND RAISED BY THE REVENUE AND DECIDE THE ISSUE ON MERITS. 16. NOW HAVING ADMITTED ADDITIONAL, WE FIND THAT I TAT, SPECIAL BENCH IN THE CASE OF ACIT VS. HINDUSTAN MINT & AGRO PRODUCTS (P.) LTD [2009] 119 I.T.D. 107 (DEL) (SB) HAS HELD THAT DEDUCTION UNDER SECTION 80HHC IS ALLOWABLE AFTER RE DUCING THE AMOUNT OF DEDUCTION ALLOWABLE UNDER SECTION 80IB OF THE ACT. WE, THEREFORE, IN VIEW OF DECISION OF RAJASTHAN HIGH COURT IN THE CASE OF ROCHI RAM & SONS (SUPRA) AND THE DECISI ON OF SPECIAL BENCH IN THE CASE OF HINDUSTAN MINT (SUPRA) HOLD THAT DEDUCTION UNDER SE CTION 80-HHC HAS TO BE COMPUTED AFTER 10 I. T. APPEAL NO. 352 (JODH.) OF 2007. REDUCING THE DEDUCTION ALLOWED UNDER SECTION 80-IB OF THE ACT. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 17. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED, FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 09 TH SEPTEMBER, 2011. SD/- SD/- [ RAJPAL YADAV ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER AT NEW DELHI . DATED : 09 TH SEPTEMBER, 2011. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT.