ACIT, Moradabad V. M/s. Rajan Overseas INC., Moradabad

ITA 3772/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8556 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 28-07-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 24-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL DR SHRI PIYUSH KAUSHIK
• Assessee Lawyers: E PASS MORADABAD PAN NO AACFRM
• Section: 43B; 80IB; 80HH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI R.P.TOLANI, JM AND SHRI R.C.SHARMA, AM ITA NO.3772/DEL/2008 ASSESSMENT YEAR : 2005-06 ASSTT.COMMISSIONER OF INCOME TAX, RANGE-II, MORADABAD. VS. M/S RAJAN OVERSEAS INC., NEAR HANUMAN MURTI, SAMBHAL BYE PASS, MORADABAD. PAN NO.AACFR5369M. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI H.K.LAL, DR. RESPONDENT BY : SHRI PIYUSH KAUSHIK, ADVOCATE. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 17.9.2008 FOR THE AY 2005-06. 2. FIRST GRIEVANCE OF THE REVENUE RELATES TO ALLOWI NG DEDUCTION U/S 80IB ON THE AMOUNT OF EXPORT INCENTIVES. IN THE COURSE OF ASSESSMENT, THE AO DISALLOWED CLAIM OF DEDUCTION U/S 80IB IN RESPECT OF EXPORT IN CENTIVES RECEIVED BY THE ASSESSEE BY RELYING ON THE DECISION OF HON'BLE SUPR EME COURT IN THE CASE OF CAMBAY ELECTRIC SUPPLY INDUSTRIAL CO.LTD. 113 ITR 84 AND STERLING FOODS 237 ITR 579. 3. BY THE IMPUGNED ORDER, THE CIT(A) OBSERVED THAT THE SCOPE OF SECTION 80IB IS WIDER IN COMPARISON TO SECTION 80HH & 80I OF THE INCOME TAX ACT. AFTER RELYING ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF ELTEK SGS (P) LTD. 3 DTR 241/169 TAXMAN 283, WHEREIN HONBLE JU DGES AFTER EXAMINING VARIOUS CASE LAWS CONCLUDED THAT CUSTOMS DUTY DRAWB ACK IS PROFIT DERIVED FROM BUSINESS OF INDUSTRIAL UNDERTAKING, HENCE ELIGIBLE FOR DEDUCTION U/S 80IB. ITA-3772/DEL/2008 2 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GON E THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN VIEW OF THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF ELTEK SGS (P) LTD. (SUPRA), THE ISSUE WITH REGARD TO ALLOWABILITY OF CLAIM OF DEDUCTION IN RESPECT OF INCOME BY WAY OF EXPORT INC ENTIVE IS NO MORE RES-INTEGRA WHEREIN FOLLOWING WAS THE OBSERVATION OF THE HONBL E COURT:- DEDUCTION U/S 80IB PROFITS AND GAINS DERIVED FRO M INDUSTRIAL UNDERTAKING DUTY DRAW BACK CUSTOMS DUTY DRAWBAC K IS PROFIT DERIVED FROM BUSINESS OF INDUSTRIAL UNDERTAKING, HE NCE ELIGIBLE FOR DEDUCTION UNDER SEC. 80IB EXPRESSION DERIVED FROM THE BUSINESS OF AN INDUSTRIAL UNDERTAKING USED IN SECTION 80IB IS NEITHER AS BROAD AS ATTRIBUTABLE TO NOT AS NARROW AS DERIVED FROM B UT IS SOMEWHERE IN BETWEEN SOURCE OF THE DUTY DRAW BACK IS THE BU SINESS OF THE INDUSTRIAL UNDERTAKING WHICH TO MANUFACTURE AND EXP ORT GOODS OUT OF RAW MATERIAL THAT IS IMPORTED AND ON WHICH CUSTOMS DUTY IS PAID. 5. NO DECISION TO THE CONTRARY OF ALLAHABAD/U.P. HI GH COURT WAS BROUGHT TO OUR NOTICE BY THE LEARNED DR, THEREFORE RESPECTFULL Y FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT ON THE VERY SAME ISSUE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A) IN ALLOWING CLAI M OF DEDUCTION U/S 80IB ON THE EXPORT INCENTIVES. 6. NEXT ISSUE RELATES TO DELETION OF DISALLOWANCE O F PF CONTRIBUTION WHICH WAS MADE BY INVOKING THE PROVISIONS OF SECTION 43B READ WITH SECTION 2(24)(X) OF THE IT ACT. 7. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW AND ALSO CONSIDERED THE ARGUMENTS OF LEARNED AR AND LEARNED DR. IN VIEW OF THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF P.M.ELE CTRONICS - 220 CTR 635, BOTH EMPLOYERS AND EMPLOYEES CONTRIBUTION CANNOT BE DISA LLOWED IF THE SAME ARE PAID BEFORE THE LAST DATE OF FILING THE RETURN. IN THIS CASE, THE ISSUE BEFORE THE HIGH COURT FOR CONSIDERATION WAS ALLOWABILITY OF DEDUCTI ON U/S 36(1)(VA) READ WITH ITA-3772/DEL/2008 3 SECTION 2(24) AND SECTION 43B IN RESPECT OF EMPLOYE R/EMPLOYEES CONTRIBUTION TOWARDS PF CONTRIBUTION WHICH WAS MADE AFTER DUE DA TE PRESCRIBED UNDER THE EPF ACT AND THE RULES MADE THEREIN BUT BEFORE THE DUE D ATE FOR FURNISHING THE RETURN OF INCOME U/S 139(1). THE HONBLE HIGH COURT CONFIRME D THE ORDER OF THE TRIBUNAL TO THE EFFECT THAT AMENDMENT BROUGHT IN SECTION 43B BY VIRTUE OF FINANCE ACT, 2003 WAS CURATIVE IN NATURE AND HENCE APPLICABLE RE TROSPECTIVELY. THEREAFTER, BY FOLLOWING THE VERDICT OF HON'BLE SUPREME COURT IN T HE CASE OF VINAY CEMENT 213 ITR 268 WHICH WAS FOLLOWED BY THE DIVISION BENC H OF DELHI HIGH COURT IN THE CASE OF DHARMENDRA SHARMA 297 ITR 20, THE HON BLE HIGH COURT OBSERVED THAT THE VIEW TAKEN BY THE TRIBUNAL DESERVES TO BE SUSTAINED AS IT IS NOT RES-INTEGRA IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF VINAY CEMENT. IN THE INSTANT CASE BEFORE US, THERE IS NO DISPUTE TO THE FACT OF DATE OF PAYMENT WHICH WAS BEFORE FILING OF THE RETURN. ACCORDINGLY, RESP ECTFULLY FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT, WE DO NOT FIND ANY INFIR MITY IN THE ORDER OF THE CIT(A) IN DELETING THE DISALLOWANCE ON ACCOUNT OF DELAYED CONTRIBUTION OF PF AND ESI. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH JULY, 2009. SD/- SD/- (R.P.TOLANI) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28.07.2009. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR