M/S. ARKEMA CATALYST INDIA PVT. LTD, MUMBAI V. THE ACIT CIR 6(1), MUMBAI

ITA 3742/MUM/2006

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1578 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-04-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 12-06-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M SUBRAMANIAN SHRI S K SINGH
• Keywords: Business income; Depreciation
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI N.V. VASUDEVAN, JM & SHRI R.K. PANDA, AM I.T.A. NO. 3742/MUM/2006 (ASSESSMENT YEAR 2000-2001) M/S. ARKEMA CATALYSIS INDIA PVT. LTD., RUBY HOUSE, B WING, 2 ND FLOOR, J.K. SAWANT MARG, DADAR (W), MUMBAI-28 PAN:AAACE6078K VS. ACIT, CIR. 6(1) 5 TH FLOOR, AAYAKAR BHAVAN, MUMBAI APPELLANT RESPONDENT APPELLANT BY: SHRI M. SUBRAMANIAN RESPONDENT BY: SHRI S.K. SINGH O R D E R DATE OF HEARING: 13.05.2010 DATE OF ORDER: 04.06.2010 PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 28 TH APRIL, 2006 OF THE CIT(A)-VI, MUMBAI RELATING TO ASSESSMENT YEAR 2000-01. 1. THIS APPEAL WAS EARLIER DISMISSED BY THE TRIBUNAL F OR WANT OF PROSECUTION. SUBSEQUENTLY, THE TRIBUNAL VID E ORDER DATED 8 TH JUNE, 2009 RECALLED ITS EARLIER ORDER. HENCE THIS IS A RECALLED MATTER. 2. GROUNDS OF APPEAL NO. 1 BY THE REVENUE READS AS UND ER: 1. THE LEARNED INCOME TAX OFFICER AND THE CIT(A) HAS ERRED IN NOT ALLOWING DEDUCTION U/S. 80HHC OF THE INCOME-TAX ACT, 1961 AMOUNTING TO RS.16,66,050/- FROM THE BOOK PROFIT U/S. 115JA. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSING OFFICER WHILE COMPUTING BOOK PROFIT U/S. 115JA OF THE INCOM E-TAX ACT, I.T.A. NO. 3742/MUM/2006 M/S. ARKEMA CATALYST INDIA PVT. LTD. ========================== 2 1961 (THE ACT) DID NOT ALLOW DEDUCTION U/S. 80HHC O F THE ACT AMOUNTING TO RS.16,66,050/-. 4. IN APPEAL, THE CIT(A) OBSERVED THAT IN THE A.Y. 200 1-02 IN ASSESSEES OWN CASE IT HAS BEEN HELD THAT 80HHC AS WORKED OUT WHILE COMPUTING NORMAL BUSINESS INCOME IS REQUIRED TO BE REDUCED FROM BOOK PROFIT. HOWEVER, IN THE PRESENT CASE AS PER NORMAL COMPUTATION OF INCOME THE ASSESSEE WOULD NOT BE ENTITLED FOR ANY DEDUCTION U/S. 80HHC AND, THEREFOR E, THERE IS NO CASE FOR ANY REDUCTION OF BOOK PROFIT AND COMPUT ATION MADE BY THE ASSESSING OFFICER U/S. 115JA IS REQUIRED TO BE CONFIRMED. HE ACCORDINGLY DISMISSED THE GROUND RAISED BY THE A SSESSEE. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN VIEW OF THE DECISION OF THE SPECIAL BENCH OF THE TR IBUNAL IN THE CASE OF DCIT VS. SYMCOME FORMULATIONS INDIA LTD. RE PORTED IN 106 ITR 193 (MUM) (SB) THE ASSESSEE IS ENTITLED TO DEDUCTION U/S. 80HHC OF THE ACT AMOUNTING TO RS.16,66,050 FRO M THE BOOK PROFIT TAXED U/S. 115JA. 6. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THAT T HE DECISION OF THE SPECIAL BENCH HAS BEEN REVERSED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. AJANTA PHAR MA. THEREFORE, THE ORDER OF THE CIT(A) HAS TO BE UPHELD . 7. THE LEARNED COUNSEL FOR THE ASSESSEE, IN HIS REJOIN DER, REFERRING TO THE DECISION OF THE TRIBUNAL IN THE CA SE OF DCIT VS. GLENMARK LABORATORIES LTD. VIDE I.T.A. NO. 4155/MU M/07 ORDER DATED 9 TH NOVEMBER, 2009 FOR THE A.Y. 2004-05 SUBMITTED THAT THE TRIBUNAL AFTER CONSIDERING THE DECISION OF THE JURISDICTIONAL HIGH COURT HAD FOLLOWED THE DECISION OF THE I.T.A. NO. 3742/MUM/2006 M/S. ARKEMA CATALYST INDIA PVT. LTD. ========================== 3 SPECIAL BENCH OF THE TRIBUNAL AND ALLOWED THE CLAIM OF THE ASSESSEE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BO TH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFI CER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE AS SESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BE FORE US. WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CASE OF C IT VS. M/S. AJANTA PHARMA LTD. VIDE INCOME TAX APPEAL NO. 1005 OF 2008 ORDER DATED 7 TH MAY, 2009 HAS HELD THAT THE MAT COMPANIES ARE ENTITLED TO THE SAME DEDUCTION OF EXPORT PROFIT U/S . 80HHC AS ANY OTHER COMPANY INVOLVED IN EXPORT IN TERMS OF SE CTION 80HHC(1B). SINCE IN THE INSTANT CASE THE ASSESSEE HAS FILED RETURN OF INCOME DISCLOSING LOSS OF RS.1,80,20,001 AND SINCE THE CIT(A) HAS GIVEN A FINDING THAT AS PER NORMAL COMPU TATION OF INCOME THE ASSESSEE WOULD NOT BE ENTITLED FOR ANY D EDUCTION U/S. 80HHC OF THE ACT FOR WHICH THERE IS NO CASE FO R ANY REDUCTION OF BOOK PROFIT, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF DEDUCTION U/S. 80HHC AS PER NORMAL C OMPUTATION OF INCOME, THE DECISION OF THE TRIBUNAL IN THE CASE OF GLENMARK LABORATORIES LTD. (SUPRA) IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THIS VIEW OF THE MATTER AND IN VI EW OF BINDING DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF AJANTA PHARMA LTD. (SUPRA) WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND ACCORDINGLY UPHOLD THE SAME. THIS G ROUND RAISED BY THE ASSESSEE IS ACCORDINGLY DISMISSED. 9. GROUNDS OF APPEAL NO. 2 BY THE ASSESSEE READS AS UN DER: DEPRECIATION ON INTANGIBLE ASSETS AMOUNTING TO RS.30,00,000/- SHOULD BE ALLOWED WHILE COMPUTING TAXABLE INCOME. I.T.A. NO. 3742/MUM/2006 M/S. ARKEMA CATALYST INDIA PVT. LTD. ========================== 4 10. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET FAIRLY CONCEDED THAT THIS GROUND IS AGAINST THE ASSESSEE B Y THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. TECHNO SHARES & STOCKS LTD., REPORTED IN 28 DTR 201. SINCE THE ISSUE STANDS DECIDED AGAINST THE ASSESSEE BY THE DECISION OF THE JURISDICTIONAL HIGH COURT CITED ABO VE, THIS GROUND RAISED BY THE ASSESSEE IS DISMISSED. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 4 TH JUNE, 2010. SD/- (N.V. VASUDEVAN) JUDICIAL MEMBER SD/- (R.K. PANDA) ACCOUNTANT MEMBER MUMBAI, DATED 4 TH JUNE, 2010 COPY TO: (1) THE APPELLANT, (2) THE RESPONDENT, (3) THE CIT(A)-VI, MUMBAI, (4) THE CIT, CITY-VI, MUMBAI, (5) THE DR, D BENCH, ITAT, MUMBAI. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI TPRAO