ACIT 6(3), MUMBAI V. METRO POLYMERS P. LTD, MUMBAI

ITA 3676/MUM/2010

• Counselvise Citation: 367619914 RSA 2010
• Duration Of Justice: 1 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 07-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G P TRIVEDI
• Assessee Lawyers: KIRAN MEHTA
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUMBAI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 3676/MUM/2010 (ASSESSMENT YEAR: 2004-05) ACIT, CIRCLE 6(3) M/S. METRO POLYMERS PVT. LTD. ROOM NO. 522, 5TH FLOOR 214 UNITED INDUSTRIAL PREMI SES AAYAKAR BHAVAN, M.K. ROAD VS. MOGAL LANE, MAHIM MUMBAI 400020 MUMBAI 400016 PAN - AABCM 5866 A PAN - AABCM 5866 A APPELLANT RESPONDENT APPELLANT BY: SHRI G.P. TRIVEDI RESPONDENT BY: SHRI KIRAN MEHTA O R D E R PER R.S. SYAL, A.M. THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 11.02.2010 AGAINST DELETION OF PENALTY OF ` 6,73,757/- IMPOSED BY THE A.O. UNDER SECTION 271(1)(C) IN RELATION TO A.Y. 20 04-05. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSES SEE CLAIMED DEDUCTION UNDER SECTION 80HHC AS WELL AS 80IB. IN THE OPINION OF THE A.O. RELIEF UNDER SECTION 80HHC WAS REQUIRED TO BE CALCULATED BEFORE REDUCING THE AMOUNT OF RELIEF UNDER SECTION 80IB. ON THIS BASIS THE AMOUNT OF DEDUCTION WAS LOWERED AND THE RESULTANT PENALTY WAS IMPOSED. THE LEARNED CIT(A) GOT CONVINCED WITH ASSESSEES SUBMISSIONS AND ORDERED F OR DELETION OF THE PENALTY. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSIN G THE RELEVANT MATERIAL ON RECORD IT IS NOTICED THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80HHC WAS NOT MADE IN THE AIR. THE HO N'BLE MADRAS HIGH COURT IN SCM CREATIONS VS. ACIT (2008) 304 ITR 319 HAS HELD THAT THE AMOUNT OF DEDUCTION UNDER SECTION 80 IA IS NOT TO B E DEDUCTED FROM THE PROFITS AND GAINS OF BUSINESS BEFORE COMPUTING RELI EF UNDER SECTION 80HHC. THIS IS THE WAY IN WHICH THE ASSESSEE HAS MADE ITS CLAIM. SUBSEQUENTLY A ITA NO. 3676/MUM/2010 2 CONTRARY VIEW, IN FAVOUR OF THE REVENUE, CAME TO BE EXPRESSED BY THE SPECIAL BENCH OF THE TRIBUNAL IN ACIT VS. HINDUSTAN MINT & AGRO PRODUCTS PVT. LTD. (2009) 119 ITD 107 (DEL) (SB). IT IS STILL FURTHER NOTED THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN ITS RECENT JUDGEMENT R EPORTED AS ASSOCIATED CAPSULE P. LTD. VS. DCIT AND ANR. (2011) 332 ITR 42 (BOM) HAS FOLLOWED THE VIEW OF THE HON'BLE MADRAS HIGH COURT IN THE CASE O F SCM CREATIONS (SUPRA) THEREBY DISAGREEING WITH THE JUDGEMENT OF THE HON'B LE DELHI HIGH COURT IN GREAT EASTERN EXPORTS VS. CIT (2011) 332 ITR 14 (DE L) HOLDING CONTRARY. THESE FACTS INDICATE THAT THE VIEW TAKEN BY THE ASS ESSEE IN CLAIMING DEDUCTION UNDER SECTION 80HHC CANNOT BE FAULTED WIT H. AS SUCH THERE IS NO QUESTION OF IMPOSING ANY PENALTY UNDER SECTION 271( 1)(C) IN SUCH A SITUATION. WE, THEREFORE, APPROVE THE VIEW TAKEN BY THE LEARNE D CIT(A) IN CANCELLING THE PENALTY. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MAY 2011. SD/- SD/- (ASHA VIJAYARAGHAVAN) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 27 TH MAY 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XII, MUMBAI 4. THE CIT VI, MUMBAI CITY 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.