DCIT 14(2)(1), MUMBAI V. ORSON EXPORTS, MUMBAI

ITA 3948/MUM/2010

• Counselvise Citation: 394819914 RSA 2010
• Duration Of Justice: 1 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 14-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RK GUPTA
• Keywords: Competent authority
• Section: 80HHC

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. K.AGARWAL (JM) AND SHRI RAJENDRA SI NGH(AM) ITA NO.3948/M/2010 ASSESSMENT YEAR 2004-05 THE ACIT 14(2), EARNEST HOUSE, M/S. ORSON EXPORTS 3 RD FLOOR, NARIMAN POINT, 1707-A PANCHRATNA, OPERA HOUSE MUMBAI 400 021. MUMBAI 400 004. PAN : AAAFO 4405 D APPELLANT RESPONDENT REVENUE BY : SHRI R.K. GUPTA ASSESSEE BY : NONE ORDER PER RAJENDRA SINGH (AM) THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 26.2.10 OF CIT(A) FOR THE ASSESSMENT YEAR 2004-05. THE ONLY DI SPUTE RAISED IN THIS APPEAL IS REGARDING ALLOWABILITY OF DEDUCTION UNDER SECTIO N 80HHC IN RELATION TO DEPB INCOME. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IN THE RELEVANT YEAR HAD CLAIMED DEDUCTION UNDER SECTION 80HHC ON T HE ENTIRE DEPB INCOME OF RS.16,15,637/- WHICH INCLUDED DEPB RECEIVABLE AT TH E END OF THE YEAR OF RS.7,93,794/-. AO TREATED THE AMOUNT RECEIVABLE OF RS.7,93,794/- AS INCOME UNDER SECTION 28(IV) AND DID NOT ALLOW DEDUCTION UN DER SECTION 80HHHC IN RELATION TO THE SAID INCOME. IN APPEAL ASSESSEE SUB MITTED BEFORE CIT(A) THAT DEPB INCOME OF RS.7,93,794/- PERTAINED TO EXPORT MA DE DURING THE FINANCIAL 2 YEAR 2002-03 AND AGAINST WHICH APPLICATION WAS FILE D WITH THE COMPETENT AUTHORITY ON 26.9.2003 AND THEREFORE THE SAME AMOUN T HAD TO BE TREATED AS INCOME UNDER SECTION 28(III)(B) IN TERMS OF THE DEC ISION OF THE SPECIAL BENCH OF TRIBUNAL IN CASE OF TOPMAN EXPORTS LTD. (318 ITR 87 ) AND THE DEDUCTION UNDER SECTION 80HHC HAS TO BE ALLOWED. CIT(A) DIRECTED TH E AO TO CONSIDER THE CLAIM OF THE ASSESSEE AND IF THE SAME WAS FOUND TO BE COR RECT DEDUCTION HAS TO BE ALLOWED FOLLOWING THE DECISION OF THE SPECIAL BENCH (SUPRA). AGGRIEVED BY THE SAID DECISION REVENUE IS IN APPEAL. 3. BEFORE US NO ONE APPEARED AT THE TIME OF HEARING OF THE APPEAL THOUGH THE NOTICE HAD BEEN SENT WELL IN ADVANCE NOR ANY AD JOURNMENT APPLICATION HAS BEEN RECEIVED. WE THEREFORE PROCEED TO DECIDE THE A PPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LEARNED DR WHO SUBMITTED THAT THE ISSUE WAS COVERED BY THE JUDGMENT OF HONB LE HIGH COURT OF MUMBAI IN CASE OF CIT VS KALPATARU COLOURS AND CHEMICALS LTD. (328 ITR 451). 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE M ATTER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABILITY OF DEDUCTION UNDE R SECTION 80HHC IN RESPECT OF DEPB INCOME WHICH ALSO INCLUDED THE PROFIT ON SALE OF DEPB AS WELL AS FACE VALUE OF DEPB. THE SPECIAL BENCH OF THE TRIBUNAL IN CASE OF TOPMAN EXPORTS (SUPRA) HAD HELD EARLIER THAT FACE VALUE OF DEPB WI LL BE INCOME UNDER SECTION 23(IIII)(B) WHEREAS THE PROFIT ON SALE WOULD BE INC OME UNDER SECTION 23(III)(D). HOWEVER, HONBLE HIGH COURT OF MUMBAI RECENTLY IN C ASE OF KALPATARU COLOURS & CHEMICALS (SUPRA) HAVE HELD THAT BOTH THE PROFIT AS WELL AS FACE VALUE OF DEPB HAS TO BE CONSIDERED AS INCOME UNDER SECTION 23(III )(D) AND HAS TO BE DEALT WITH ACCORDINGLY. THE ORDER OF CIT(A) THEREFORE CAN NOT BE SUSTAINED. WE THEREFORE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE FILE TO THE AO FOR FRESH 3 ORDER AFTER NECESSARY EXAMINATION IN THE LIGHT OF D ECISION OF HONBLE HIGH COURT OF MUMBAI IN CASE OF KALPATARU COLOURS & CHEMICALS (SUPRA) AND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED F OR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 0.05.2011. SD/- SD/- ( D. K. AGARWAL ) (RAJENDRA SIN GH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 20.05.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR C BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK