Maharashtra Seamless Ltd, V. Addl. CIT range-6,

ITA 3886/DEL/2006

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5793 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 22-03-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 29-11-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: STEPHEN GEORGE
• Assessee Lawyers: VED JAIN CA MS RANO JAIN
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B: NEW DELHI SHRI G.E. VEERABHADRAPPA, HONBLE VICE-PRESIDENT AND SHRI C.L. SETHI, JUDICIAL MEMBER ITA NO. 3886/DEL/2006 ASSESSMENT YEAR : 2003-04 MAHARASHTRA SEAMLESS LTD. A/23B, IST FLOOR, ASAF ALI ROAD, NEW DELHI VS. ADDL. COMMISSIONER OF INCOME TAX, RANGE 6, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VED JAIN, CA MS. RANO JAIN, CA RESPONDENT BY : SHRI STEPHEN GEORGE, CIT DR O R D E R PER: C.L. SETHI, J.M. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER-DATED 28.09.2006 PASSED BY THE LD. CIT(A) PERTAINING TO THE A.Y. 200 3-04. 2. IT HAS BEEN SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT GROUND NO. 1 RAISED BY THE ASSESSEE BEING GENERAL I N NATURE NEED NO ADJUDICATION. HENCE, THE SAME IS REJECTED. 3. IN THE COURSE OF HEARING OF THIS APPEAL, GROUND NO. 2 RAISED BY THE ASSESSEE HAS NOT BEEN PRESSED, AND, HENCE, THE SAME ALSO STANDS REJECTED. ITA NO. 3886/DEL/2006 PAGE 2 OF 4 4. GROUND NO. 3 AND 4 IS WITH REGARD TO THE ASSESSE ES CLAIM OF DEDUCTION U/S. 80HHC OF THE INCOME TAX ACT, 1961 ( THE ACT). 5. THE ASSESSEE COMPANY IS A SUPPORTING MANUFACTURE R AND HAS EXPORTED GOODS THROUGH M/S. JAGUAR OVERSEAS LTD., W HICH IS AN EXPORT HOUSE. THE AO DISALLOWED THE DEDUCTION U/S. 80HHC ON THE GROUND THAT THE ASSESSEE IS A SUPPORTING MANUFACTURER OF M /S. JAGUAR OVERSEAS LTD., AND IN CASE OF M/S. JAGUAR OVERSEAS LTD., THE EXPORTER, IF THE EXPORT INCENTIVE OF DEPB OF RS. 9,65,43,572/- IS RE DUCED FROM BUSINESS PROFIT, THERE WOULD BE NEGATIVE INCOME, AND SINCE T HERE WOULD BE NEGATIVE INCOME, THE ASSESSEE BEING THE SUPPORTING MANUFACTURER, WOULD NOT BE ELIGIBLE FOR ANY DEDUCTION. 6. THE CIT(A) UPHOLD THE AOS ORDER ON THIS ISSUE. 7. THE QUESTION WHETHER THE FACE VALUE OF DEPB OR I TS PROFIT WILL BE RELEVANT FOR THE PURPOSE OF COMPUTING DEDUCTION U/S . 80HHC, HAS BEEN NOW CONSIDERED BY THE SPECIAL BENCH OF INCOME TAX A PPELLATE TRIBUNAL IN THE CASE OF TOPMAN EXPORT 318 ITR 87 (AT) = 125 TTJ 289, AND AFTER CONSIDERING THAT DECISION, THE ISSUE WHETHER THERE WOULD BE PROFIT AVAILABLE FOR 80HHC DEDUCTION CAN ONLY BE CONSIDERE D. WE, THEREFORE, RESTORE THIS MATTER BACK TO THE FILE OF THE AO FOR HIS FRESH CONSIDERATION ITA NO. 3886/DEL/2006 PAGE 3 OF 4 IN THE LIGHT OF THE PROPOSITION LAID DOWN IN THE DE CISION OF SPECIAL BENCH IN THE CASE OF TOPMAN EXPORT (SUPRA), AFTER P ROVIDING REASONABLE OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE. THE MATTER ABOUT AVAILABILITY OF DEDUCTION U/S. 80HHC TO THE ASSESSE E SHALL REMAIN OPEN BEFORE THE AO FOR HIS FRESH DECISION AS PER LAW. T HE ASSESSEE SHALL BE AT LIBERTY TO MAKE AND RAISE SUCH CONTENTIONS AND SUBM ISSIONS AS THE ASSESSEE THINKS FIT AND PROPER IN SUPPORT OF ITS CL AIM. THE AO SHALL CONSIDER THE ASSESSEES CONTENTION AND THE PROVISIO NS OF LAW IN THE LIGHT OF THE DECIDED CASES, AND THEN PASS A WELL SPEAKING AND REASONED ORDER ON THE ISSUE. WE ORDER ACCORDINGLY. 8. NEXT ISSUE IS, AS TO WHETHER THE PROFIT OF TWO U NITS SHALL BE AGGREGATED FOR THE PURPOSE OF DEDUCTION U/S. 80HHC OR UNIT-WISE DEDUCTION IS TO BE ALLOWED, IS ALSO RESTORED BACK T O THE FILE OF THE AO FOR HIS FRESH ADJUDICATION. THE MATTER SHALL REMAIN OP EN BEFORE THE AO FOR HIS FRESH DECISION AS PER LAW. 9. IT IS TO BE MENTIONED HERE THAT THE LD. COUNSEL FOR THE ASSESSEE ALSO CONTENDED THAT THE MATTER WITH REGARD TO THE ASSESS EES CLAIM U/S. 80HHC BE RESTORED BACK TO THE AO FOR HIS FRESH ADJU DICATION IN THE LIGHT OF THE DECIDED CASES AND AS PER LAW. ITA NO. 3886/DEL/2006 PAGE 4 OF 4 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR A STATISTICAL PURPOSE IN THE MANNER AS INDICATED AB OVE. 11. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 31 ST MARCH, 2010. SD/- ( G.E. VEERABHADRAPPA ) VICE-PRESIDENT SD/- (C.L. SETHI) JUDICIAL MEMBER DATED: 31 ST MARCH, 2010 *NITASHA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. BY ORDER DEPUTY REGISTRAR