DCIT, New Delhi V. M/s. Venus Hotelware (P) Ltd., New Delhi

ITA 3790/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86737 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 12-02-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 13-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRAKAR
• Assessee Lawyers: SIDDHARTH KOHLI
• Keywords: Tax effect; Reassessment proceedings
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: H : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO. 3790/DEL/2013 ASSESSMENT YEAR: 2004 - 05 DY. COMMISSIONER OF INCOME VS. M/S VENUS HOTELWARE (P) LTD. TAX, CIRCLE - 17(1), NEW DELHI WZ - 1, BASAI NAZAFGARH ROAD, NEW DELHI (PAN: AAACV0339A) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. J.P. CHANDRAKAR, SR.DR RESPONDEN T BY: SH. SIDDHARTH KOHLI, CA DATE OF HEARING: 12.02.2015 DATE OF PRONOUNCEMENT: 13.02.2015 ORDER PER I.P. BANSAL, JM : 1. THE PRESENT APPEAL IS FI L E D BY THE REVENUE AND IT IS DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) DATED 6 TH MARCH, 2013 FOR THE ASSESSMENT YEAR 2004 - 05. 2. THE GROUNDS OF APPEAL READ AS UNDER: I. LEARNED CIT(A) IN LAW AND ON THE FACTS OF THE CASE IN DIRECTING THE A.O. TO REWORK THE COMPUTATION OF DEDUCTION U/S 80HHC OF THE I.T. ACT AS PER CIRCULAR NO. 2 OF 2006 WHICH IS NOT APPLICABLE TO THE FACTS OF THE CASE. II. LEARNED CIT(A) ERRED IN NOT FOLLOWING THE RATIO OF THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF M/S IPCA LABORATORIES LTD. VS. CIT 266 ITR 521 (SC) AS APPLIED BY THE A.O. 2 ITA NO. 3790/DEL/2013 AY : 2004 - 05 III. THE APPELLANT CRAVES FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF APPEAL. 3. THE IMPUGNED ASSESSMENT IS ORDER DATED 30 TH DECEMBER, 2011 PASSED UNDER SECTION 143(3)/147 OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) . THE ASSESSMENT WAS REOPENED ON THE GROUND THAT THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80HHC AMOUNTING TO RS. 8,96,199/ - , WAS WRONGLY ALLOWED TO THE ASSESSEE AS THERE WAS NEGATIVE PROFIT. IN THE RE - ASSESSMENT PROCEEDINGS AN AMOUNT OF RS. 8,96,199/ - IS ADDED TO THE EARLIER ASSESS ED INCOME. THUS, IN THE PRESENT CASE, THE ADDITION WHICH HAS BEEN MADE IN THE ASSESSMENT ORDER IS ONLY A SUM OR RS. 8,96,199/ - . LEARNED CIT(A) HAS DECIDED THIS ISSUE AS PER PARA 4.2 OF THE IMPUGNED ORDER WHICH READ AS UNDER: 4.2 IN HIS SUBMISSIONS, THE A PPELLANT ARGUED THAT DEDUCTION U/S 80HHC WAS ALLOWABLE AND RELIED ON CIRCULAR NO. 2/2006. THE SUBMISSIONS OF THE APPELLANT AND THE FACTS HAVE BEEN CAREFULLY CONSIDERED. THE APPELLANT HAS RELIED ON CIRCULAR NO. 2/2006 HOWEVER, COMPLETE DETAILS OF THE COMPUT ATION FOR DEDUCTION U/S 80HHC HAVE NOT BEEN FURNISHED. THE APPELLANT HAS STATED THAT IN HIS SUBMISSIONS DATED 21.10.2011 DURING REASSESSMENT PROCEEDINGS, HE HAD PLACED RELIANCE ON CIRCULAR NO. 2/2006 BUT THIS HAS NOT BEEN CONSIDERED IN THE ASSTT. ORDER. CO NSIDERING THE FACTS, THE A.O. IS DIRECTED TO EXAMINE HIS RECORD AND WORK OUT THE ALLOWABLE DEDUCTION U/S 80HHC AFTER ALSO CONSIDERING CIRCULAR NO. 2/2006. THE GROUNDS ARE PARTLY ALLOWED WITH THESE REMARKS. 3 ITA NO. 3790/DEL/2013 AY : 2004 - 05 4. AT THE OUTSET, IT WAS SUBMITTED BY LEARNED AR THAT THE TAX EFFECT IN THE PRESENT CASE IS LESS THAN RS. 3 LACS AND THEREFORE, THE DEPARTMENTAL APPEAL SHOULD NOT BE ENTERTAINED ON THIS GROUND ALONE. 5. IT WAS FURTHER SUBMITTED BY LEARNED AR THAT LEARNED CIT(A) HAS NOT GRANTED DIRECT RELIEF TO THE ASSESS EE AND HE HAS DIRECTED THE A.O. TO EXAMINE THE RECORDS AND WORK OUT THE DEDUCTION ALLOWABLE UNDER SECTION 80HHC OF THE ACT AFTER CONSIDERING THE CIRCULAR. IT WAS SUBMITTED BY LEARNED AR THAT THERE IS NOTHING WRONG IN THE DIRECTION GIVE BY LEARNED CIT(A) A ND THEREFORE, THE DEPARTMENTAL APPEAL IS LIABLE TO BE DISMISSED. 6. ON THE OTHER HAND, IT WAS SUBMITTED BY LEARNED DR THAT THE GRANT OF DEDUCTION UNDER SECTION 80HHC IS CONTRARY TO THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF M/S IPCA LABORATORIE S LTD. VS. CIT 266 ITR 521 (SC) AND LEARNED CIT(A) ALSO DID NOT HAVE POWER TO SET ASIDE THE ISSUE TO THE FILE OF A.O. THUS, IT WAS SUBMITTED BY LEARNED DR THAT THE DEPARTMENTAL APPEAL SHOULD BE ALLOWED. 7. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. THE DEPARTMENTAL APPEAL IS LIABLE TO BE DISMISSED NOT ONLY ON ACCOUNT OF LOW TAX EFFECT, WHICH IN THE PRESENT CASE IS LESS THAN RS. 3 LACS , BUT ALSO ON THE GROUND THA T THOUGH THE LEARNED CIT(A) MAY NOT HAVE POWER TO SET ASIDE THE ISSUE BUT ULTIMATELY HE HAS DIRECTED THE A.O. TO WORK OUT THE ALLOWABLE DEDUCTION 4 ITA NO. 3790/DEL/2013 AY : 2004 - 05 UNDER SECTION 80HHC WHICH DIRECTION DOES NOT MEAN THAT HE HAS ALLOWED THE RELIEF TO THE ASSESSEE AND THE A.O. HAS ALL THE POWERS TO APPLY THE RELEVANT LAW. 8. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. ACCORDINGLY , THE SAME IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 13 TH FEBRUARY , 2015. SD/ - SD/ - (N.K. SAINI) ( I.P. BANSAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH FEBRUARY , 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI