ITO, New Delhi V. M/s. XLNC Fashions, New Delhi

ITA 3520/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4488 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 11-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMPOORNANAND
• Section: 80IB; 10B; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. K. N. CHARY , JM ITA NO. 3520 /DEL/201 4 : ASSTT. YEAR : 201 0 - 1 1 INCOME TAX OFFICER , WARD - 22(2 ), NEW DELHI VS M/ S XLNC FASHIONS, A - 14, NEW FRIENDS COLONY, NEW DELHI - 110065 (APPELLANT) (RESPONDENT) PAN NO. A A A FX0026B ASSESSEE BY : NONE REVENUE BY : SH. SAMPOORNANAND, SR. DR DATE OF HEARING : 28 .09 .201 7 DATE OF PRONOUNCEMENT : 28 . 0 9 .201 7 ORDER PER N. K. SAINI, AM: THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 14.03.2014 OF LD. CIT(A) - XXIII , NEW DELHI . 2. DURING THE COURSE OF HEARING NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE NEITHER ANY ADJOURNMENT W AS SOUGHT. WE, THEREFORE, PROCEEDED EX - PARTE QUA THE ASSESSEE AND THE APPEAL IS DECIDED AFTER HEARING THE LD. DR. 3 . THE ONLY EFFECTIVE GROUND RAISED IN THIS APPEAL READS AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) WAS RIGHT IN HOLDING THAT ITA NO. 3520 /DEL /201 4 XLNC FASHIONS 2 EXEMPTION U/S 10B WAS ADMISSIBLE TO ASSESSEE ON DUTY DRAW BACK RECEIPT? 4 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 27.09.2010 DECLARING TOTAL INCOME OF RS.25,109/ - . LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WAS ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORT OF GARMENT ACCESSORIES AND WAS A HUNDRED PERCENT EXPORT ORIENTED UNIT SET - UP AT NOIDA. THE ASSESSEE DECLARED NET PROFIT OF R S.2,03,60,877/ - AND CLAIMED EXEMPTION U/S 10B OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WHICH INCLUDED DUTY DRAW BACK AMOUNTING TO RS.1,09,47,425/ - . THE AO OBSERVED THAT S INCE, THE ASSESSEE HAD INCLUDED THE DUTY DRAW BACK FOR COMPUTI NG DEDUCTION U/S 10B OF THE ACT WHICH IS ON IDENTICAL LINES AS THE DEDUCTION S U/S 80I AND 80IB OF THE ACT, HE, THEREFORE, DISALLOWED THE SAME ON THE BASIS THAT THE HON BLE DELHI HIGH COURT AND THE HON BLE SUPREME COURT HAD NOT CONSIDERED THE DUTY DRAW BACK AS ELIGIBLE PROFIT FOR COMPUTING DEDUCTION U/S 80I AND 80IB OF THE ACT. 5 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO DIRECTED THE AO TO ALLOW THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE ITAT DELHI BENCH IN ASSE SSEE S OWN CASE FOR THE ASSESSMENT YEAR 2009 - 10. THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 4.3 OF THE IMPUGNED ORDER WHICH READ AS UNDER: ITA NO. 3520 /DEL /201 4 XLNC FASHIONS 3 4.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND THE ARGUMENTS OF THE ID. AR. I HAVE ALSO CARE FULLY PERUSED THE ORDER OF HON'BLE ITAT, NEW DELHI IN THE APPELLANT'S OWN CASE FOR A.Y. 2009 - 10, AS MENTIONED SUPRA. ALTHOUGH, IN SIMILAR CASES OF CLAIM OF DEDUCTION U/S. 10B OF THE ACT, WHERE THE APPELLANT HAS CREDITED DUTY DRAWBACK IN ITS P&L A/C. DURING THE YEAR UNDER CONSIDERATION, I HAVE TAKEN A CONTRARY VIEW TO THAT OF THE HON'BLE ITAT, DELHI IN THE APPELLANT'S OWN CASE FOR A.Y. 2009 - 10, WHICH WAS BASED ON THE FOLLOWING JUDGMENTS : (A) CIT VS. MENON IMPEX PVT. LTD. 259 ITR 403 (MAD) (B) CIT VS. STERL ING FOODS 237 ITR 579 (SC) (C) LIBERTY INDIA VS. CIT (2009) 317 ITR 0218 (SC) (D) ITO VS. BANYAN CHEMICALS PVT. LTD. 310 ITR (AT) 384 (AHD)(TM) (E) INDIA COMNET INTERNATIONAL VS. ITO 304 ITR 322 (MAD) HOWEVER, IN THE INSTANT CASE, I AM BOUND BY THE JU DGME NT PRONOUNCED BY HON'BLE IT AT, NEW DELHI, WHICH IS THE JURISDICTIONA L BENCH OF HON'BLE IT AT, IN THE APPELLANT'S OWN CASE FOR A.Y.2009 - 10, WHICH IS THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, ON EXACTLY SIMILAR FACTS. THEREFORE, RESPECTFULLY FOLLOWING THE AB OVE M ENTIONED JUDGMENT OF HON'BLE IT AT IN THE APPELLANT'S CASE FOR A.Y. 2009 - 10, RELIEF IS GRANTED TO THE APPELLANT AND THE AO IS DIRECTED TO GIVE DEDUCTION U/S. 10B OF THE ACT AS CLAIMED BY THE APPELLANT AT RS.2,03,84,339/ - . 6 . NOW THE DEPARTMENT IS IN APPEAL. THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER DATED 04.02.2013. ITA NO. 3520 /DEL /201 4 XLNC FASHIONS 4 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD, IT IS NOTICED THAT THE LD. CIT(A) BY FOLLOWING THE EARLIER ORDER DATED 27.01.2014 OF THE ITAT DELHI BENCH H , NEW DELHI IN ITA NO. 4712/DEL/2012 FOR THE ASSESSMENT YEAR 2009 - 10 IN ASSESSEE S OWN CASE HAS DIRECTED THE AO TO ALLOW THE DEDUCTION U/S 10B OF THE ACT. WE, TH EREFORE, DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) AND ACCORDINGLY DO NOT SEE MERIT IN THIS APPEAL OF THE DEPARTMENT . 8 . IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. (O RD E R PRONOUNCED IN THE COURT ON 28 / 0 9 /2017 ) SD/ - SD/ - ( K. N. CHARY ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DAT ED: 28 /09 /2017 *SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR : ITAT ASSISTANT REGISTRAR