ACIT, Moradabad V. M/s. Dynatech Exports, Moradabad

ITA 3919/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2217 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-12-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 18-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANISH GUPTA
• Keywords: Set aside
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI D.R.SINGH AND SHRI K.D.RANJAN ITA NOS.3918 & 3919/DEL/2009 ASSESSMENT YEARS : 2003-04 & 2004-05 ACIT CIRCLE-II, MORADABAD. VS. DYNATECH EXPORTS PREM NAGAR, KANTH ROAD, MORADABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANISH GUPTA, D.R. RESPONDENT BY: NONE ORDER PER RANJAN, AM: THESE APPEALS BY THE REVENUE FOR ASSESSMENT YEARS 2 003-04 AND 2004-05 ARISE OUT OF ORDER OF LD. CIT(A), BAREILLY. THESE APPEALS WERE HEARD TOGETHER AND FOR SAKE OF CONVENIENCE ARE DECIDED BY THIS COMMON ORDER. 2. THE REVENUE HAS TAKEN IDENTICAL GROUNDS IN BOTH THE APPEALS RELATING TO DEDUCTION U/S 80HHC IN RESPECT OF DEPB. THE ASSE SSING OFFICER DISALLOWED THE CLAIM OF ASSESSEE UNDER THIRD PROVI SO TO SECTION 80HHC(3) AS THE REQUISITE CONDITIONS WERE NOT SATISFIED. 3. ON APPEAL, LD. CIT(A) ALLOWED THE CLAIM ON THE G ROUND THAT DEPB WAS A PART OF EXPORT PROFIT DERIVED FROM EXPORT BUS INESS AND, THEREFORE, ASSESSING OFFICER WAS DIRECTED TO RECOMPUTED THE DE DUCTION U/S 80HHC BY INCLUDING THE AMOUNT OF DEPB. 2 4. BEFORE US, THE LD. SR. D.R. SUBMITTED THAT LD. CIT(A) HAS NOT DISCUSSED THE ISSUE RELATING TO REQUISITE CONDITION S TO BE SATISFIED AS CONTAINED IN THIRD PROVISO TO SEC. 80HHC(3) WHICH W AS INSERTED BY TAXATION LAWS (AMENDMENT) ACT, 2005 WITH RETROSPECTIVE EFFEC T FROM 01-4-1998. THE ASSESSEES TURNOVER WAS MORE THAN RS.10 CRORES AND, THEREFORE, THE ASSESSEE WAS REQUIRED TO FULFILL BOTH THE CONDITIONS OF THIR D PROVISO TO SEC. 80HHC(3). SINCE THE LD. CIT(A) HAS NOT DISCUSSED THE ISSUE, I T HAS BEEN PLEADED THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF LD. CIT(A) . 5. NONE ATTENDED ON BEHALF OF THE ASSESSEE WHEN THE CASE WAS CALLED UP FOR HEARING. KEEPING IN VIEW THE ISSUE INVOLVED, TH E APPEALS FILED BY REVENUE ARE DECIDED AFTER HEARING THE LD. D.R. 6. WE HAVE HEARD THE LD. SR. D.R. AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FOR THE PURPOSES OF COMPUTATI ON OF DEDUCTION U/S 80HHC(1), EXPORT PROFIT IS DETERMINED IN ACCORDANCE WITH PROVISIONS OF SECTION 80HHC(3). FOR THIS PURPOSE PROFIT OF BUSINE SS IS TO BE DETERMINED AS PROVIDED IN CLAUSE (BAA) OF THE EXPLANATION TO SECT ION 80 HHC. THEREAFTER, THE EXPORT PROFIT IS COMPUTED U/S 80HHC(3). EXPORT PROFIT SO COMPUTED, SHALL BE FURTHER INCREASED BY THE AMOUNT SPECIFIED IN FIRST PROVISO TO 5 TH PROVISO TO SEC. 80HHC(3). THE THIRD PROVISO TO SECT ION 80HHC(3) IS APPLICABLE IN RESPECT OF THE CASES WHERE EXPORT TUR NOVER EXCEEDS RS.10 CRORES. THE ASSESSEE IN ORDER TO CLAIM THE BENEFIT OF THIRD PROVISO, HAS TO FULFILL THE CONDITIONS LAID DOWN THEREIN. THE BENEF IT OF THIRD PROVISO WILL BE AVAILABLE ONLY IF THE ASSESSEE HAS NECESSARY AND SU FFICIENT EVIDENCE TO PROVE THAT (A) HE HAD AN OPTION TO CHOOSE EITHER THE DUTY DRAW BACK OR THE DUTY ENTITLEMENT PASS BOOK SCHEME, BEING THE DUTY REMISS ION SCHEME; AND (B) THE RATE OF DRAW BACK CREDIT ATTRIBUTABLE TO CUSTOMS DU TY WAS HIGHER THAN THE 3 RATES OF CREDIT ALLOWABLE UNDER THE DUTY ENTITLEMEN T PASS BOOK SCHEME, BEING THE DUTY REMISSION SCHEME. SINCE THE ASSESSEE DID NOT SATISFY THE CONDITIONS SPECIFIED IN THIRD PROVISO, THE ASSESSIN G OFFICER DENIED THE BENEFIT OF THIS PROVISO. HOWEVER, WITHOUT CONSIDERI NG THE RELEVANT PROVISIONS OF LAW, LD. CIT(A) HAS DIRECTED THE ASSESSING OFFIC ER TO ALLOW DEDUCTION U/S 80HHC IN RESPECT OF DEPB.. THIS, IN OUR CONSIDERED OPINION, IS NOT IN ACCORDANCE WITH THE PROVISIONS OF LAW. WE, THEREFOR E, SET ASIDE THE ISSUE TO THE FILE OF LD. CIT(A) WITH THE DIRECTIONS TO EXAMI NE THE CASE IN THE LIGHT OF PROVISIONS OF THIRD PROVISO TO SEC. 80HHC AND DECID E THE ISSUE ON MERITS. 7. IN THE RESULT, APPEALS FILED BY THE REVENUE FOR BOTH THE YEARS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 10 TH DECEMBER, 2009 IMMEDIATELY AFTER CLOSE OF HEARING. SD/- SD/- (D.R.SINGH) (K.D.RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10.12.2009. PSP COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR