M/s. Ajit Exports, Delhi V. ACIT, New Delhi

ITA 3983/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0368 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-01-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 26-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRENDRA KUMAR
• Assessee Lawyers: VISHNU SHARMA
• Keywords: Opportunity of being heard; Competent authority
• Section: 143(3)

Judgement Text

I.T.A. NO.3983 /DEL/2010 1/1 IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH A NEW DELHI, BENCH A NEW DELHI, BENCH A NEW DELHI, BENCH A BEFORE SHRI R. P. TOLANI, JUDICIAL MEMBER AND SHRI A K GARODIA, ACCOUTANT MEMBER ITA NO.3983 /DEL/2010 (ASSESSMENT YEAR2007-08) M/S. AJIT EXPORTS VS. ADDL. CIT, RANGE 21, 93, MANGOLPUR KHURD, NEW DELHI DELHI 83 (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AALFA9672K APPELLANT BY: SHRI VISHNU SHARMA, ADV. RESPONDENT BY: SHRI AMRENDRA KUMAR, SR. DR ORDER ORDER ORDER ORDER PER A. K. GARODIA, AM: PER A. K. GARODIA, AM: PER A. K. GARODIA, AM: PER A. K. GARODIA, AM: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) XXII, NEW DELHI DATED 15.06.2010 FOR THE ASSESSMENT YEAR 2007-08. THE GROUNDS RAISED BY THE ASSESSEE AR E AS UNDER: MAY IT PLEASE YOUR HONOURS. THE APPLICANT RAISES FOLLOWING GROUNDS TO ASSAIL THE AFORESAID ASSESSMEN T ORDER. THAT THE ASSESSEE IS A PARTNERSHIP FIRM CONSISTING OF TWO UNITS M/S. CB JEWELERS AND M/S. AJIT EXPORTS NSEZ ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORTS OF GOLD JEWEL LERY AND DOMESTIC TRADING OF GOLD AND DIAMOND JEWELLERY. THAT THE APPELLATE AUTHORITY COMPLETELY ERRED ON F ACTS AND IN LAW WHILE FRAMING THE IMPUGNED ASSESSMENT FOR AS SESSMENT YEAR 2007-08, THEREBY WRONGLY ASSESSING THE INCOME OF ` 1,29,50,376/- AGAINST THE RETURN INCOME OF ` 15,86, 060/-. 1. THAT THE APPELLATE AUTHORITY COMPLETELY ERRED ON FACTS AND IN LAW IN DISALLOWING THE DEDUCTIONS OF ` 1,29,50,3 76/- CLAIMED BY THE APPLICANT U/S 10A OF I. T. ACT WHICH THE APPLICANT IS LEGALLY ENTITLED FOR. 2. THAT THE A.O. AND THE APPELLATE AUTHORITY DID NO T APPRECIATE THE PROVISION OF SECTION 10A OF THE I. T . ACT APPLICABLE IN THE CASE OF ASSESSEE. HOWEVER, THE S AME A.O. AND THE APPELLATE AUTHORITY GRANTED EXEMPTION UNDER SECTION 10A FOR THE SAME ASSESSMENT YEAR I.E. 2007- 08 TO THE OTHER ASSESSEES WHO WERE SIMILARLY SITUATED LIK E THE INSTANT APPELLANT. 3. THAT THE APPELLANT CRAVE LEAVE TO AMEND OR ALTER, R AISE ANY OTHER GROUND AT THE TIME OF HEARING IN THE INTEREST OF JUSTICE. I.T.A. NO.3983 /DEL/2010 2/2 2. THE BRIEF FACTS OF THE CASE ARE THAT DURING THIS YEAR, WHEN THE INCOME TAX PROCEEDINGS WERE GONG ON, THERE WAS A RA ID BY DRI IN THE PREMISES AND IN THE RESIDENCE OF THE PARTNERS O F THE FIRM. MOST OF THE DOCUMENTS WERE SEIZED BY DRI OFFICE AND ONE OF THE PARTNERS SHRI AJIT SINGH WAS ARRESTED AND 2 ND PARTNER RAN AWAY. HE WAS RELIEVED FROM JAIL ON 12.12.2009 AND OTHER PARTNER IS STILL ABSCONDING AS NOTED BY LD. CIT(A) IN PARA 5.2 OF HIS ORDER., THE A.O., IN THE MEANTIME WAS ISSUING NOTICE TO THE ASSESSEE TO GET THE ASSESSMENT PROCEEDINGS COMPLETED. SINCE THERE WAS NOBODY IN T HE OFFICE AND THE PREMISES OF THE ASSESSEE WERE LOCKED, NOBODY RE CEIVED THE NOTICE ISSUED BY THE A.O. MR. AJIT SINGH WAS RELIEV ED FROM JAIL ON 12.12.2009 AND THEREAFTER, HE CAME TO KNOW ABOUT TH E PROCEEDINGS. MR. AJIT SINGH ATTENDED FOR THE FIRST TIME ON 24.12 .2009. THE A.O. ASKED HIM TO PRODUCE DETAILS, WHICH HE COULD NOT BE CAUSE OF NON- AVAILABILITY OF STAFF AND THE RECORDS WHICH WERE PL ACED BY THE STAFF SOMEWHERE OR TAKEN AWAY BY DRI OFFICE. THE A.O. PA SSED THE ASSESSMENT ORDER ON 30.12.2009 BECAUSE THE SAME WAS GETTING TIME BARRED ON 31.12.2009. THE A.O. MADE THE ADDIT ION OUT OF DISALLOWANCE OF SOME EXPENSES AND HE ALSO REJECTED THE CLAIM OF THE ASSESSEE REGARDING EXEMPTION U/S 10A. BEING AGGRIE VED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CI T(A) BUT WITHOUT SUCCESS IN RESPECT OF THE EXEMPTION CLAIMED BY THE ASSESSEE U/S 10A. THE DISALLOWANCE OF EXEMPTION U/S10A WAS CONF IRMED BY LD. CIT(A) ON THIS BASIS THAT THE ASSESSEE WAS REQUIRED TO BRING INTO INDIA THE SALE PROCEEDS IN CONVERTIBLE FOREIGN EXCH ANGE WITHIN A PERIOD OF 6 MONTHS FROM THE END OF THE PREVIOUS YEA R OR WITHIN SUCH FURTHER PERIOD AS THE COMPETENT AUTHORITY MAY ALLOW . IN THE PRESENT CASE, THE ASSESSEE HAS NOT BROUGHT INTO INDIA THE S ALE PROCEEDS IN CONVERTIBLE FOREIGN EXCHANGE WITHIN A PERIOD OF 6 M ONTHS FROM THE END OF THE RELEVANT PREVIOUS YEAR. NOW, THE ASSESSE E IS IN FURTHER APPEAL BEFORE US ON THIS ISSUE REGARDING REJECTION OF CLAIM OF ASSESSEE FOR EXEMPTION U/S 10A. 3. IT WAS SUBMITTED BY THE LD. A.R. BEFORE US THAT AS PER THE PROVISIONS OF SECTION 10A(3), THE ASSESSEE HAS TO B RING INTO INDIA THE I.T.A. NO.3983 /DEL/2010 3/3 SALE PROCEEDS IN CONVERTIBLE FOREIGN EXCHANGE WITHI N A PERIOD O 6 MONTHS FROM THE END OF THE PREVIOUS YEAR OR WITHIN SUCH FURTHER PERIOD AS THE COMPETENT AUTHORITY MAY ALLOW IN THIS BEHALF. IT IS ALSO SUBMITTED THAT AS PER EXP. (1) TO SECTION 10A(3), R ESERVE BANK OF INDIA IS THE COMPETENT AUTHORITY FOR THE PURPOSE OF SUB-SECTION (3) OF SECTION 10A. HE SUBMITTED BEFORE US A COPY OF C IRCULAR NO.91/2003 OF RBI DATED 01.04.2003 ISSUED BY RBI AS PER WHICH, THE SALE PROCEEDS CAN BE BROUGHT INTO INDIA BY WAY OF R EALIZING EXPORT PROCEEDS WITHIN A PERIOD OF 12 MONTHS, FROM THE DAT E OF EXPORT AS PER CIRCULAR NO.28 DATED 30.03.2001 AND AS PER THIS CIRCULAR DATED 01.04.2003, EVEN THIS STIPULATION OF 12 MONTHS AND EXTENDED PERIOD THERETO HAS BEEN REMOVED. IT IS SUBMITTED THAT IN VIEW OF THIS CIRCULAR OF RBI, THE ASSESSEES CLAIM FOR EXEMPTION /DEDUCTION U/S 10A IS TO BE ALLOWED BECAUSE THE ASSESSEE HAS BROUG HT INTO INDIA THE EXPORT PROCEEDS WITHIN A PERIOD OF 12 MONTHS FR OM THE DATE OF EXPORT. IT IS ALSO SUBMITTED THAT IN THE SUBSEQUEN T YEAR I.E. IN ASSESSMENT YEAR 2008-09, THE A.O. HIMSELF HAS ALLOW ED THE CLAIM OF THE ASSESSEE REGARDING EXEMPTION U/S 10A UNDER SIMI LAR FACTS AND CIRCUMSTANCES. HE SUBMITTED A COPY OF THE ASSESSME NT ORDER U/S 143(3) FOR ASSESSMENT YEAR 2008-09, WHICH IS DATED 28.12.2010. IT WAS SUBMITTED THAT IF CONSIDERED NECESSARY, THE MAT TER MAY BE RESTORED BACK TO THE FILE OF THE A.O. FOR A FRESH D ECISION. LD. D.R. SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. AS PER THE PROVISIONS OF SECTION 10A(3), TH E COMPETENT AUTHORITY MAY ALLOW THE ASSESSEE TO BRING INTO INDI A THE SALE PROCEEDS IN CONVERTIBLE FOREIGN EXCHANGE EVEN AFTER EXPIRY OF THE PRESCRIBED PERIOD OF 6 MONTHS FORM THE END OF THE P REVIOUS YEAR. AS PER EXPLANATION (1) TO SECTION 10A(3), RBI IS THE C OMPETENT AUTHORITY FOR THIS PURPOSE. THE ASSESSEE HAS FURNI SHED BEFORE US THE CIRCULAR OF RBI NO.91/2003 DATED 01.04.2003 IN WHIC H REFERENCE HAS BEEN MADE OF ANOTHER CIRCULAR ISSUED BY RBI CIRCULA R NO.28 DATED 30.03.2001. IT HAS BEEN POINTED OUT IN THE SAID CI RCULAR DATED 01.04.2003 THAT AS PER EARLIER CIRCULAR DATED 30.03 .2001, UNIT I.T.A. NO.3983 /DEL/2010 4/4 SITUATED IN SEZ HAS BEEN PERMITTED RELIEF TO REPATR IATE TO INDIA AND FULL VALUE OF GOODS AND SOFTWARE WITHIN A PERIOD OF 12 MONTHS FROM THE DATE OF EXPORT AND IT HAS NOW BEEN DECIDED TO R EVIEW THE STIPULATED TIME OF 12 MONTHS AND EXTENDED PERIOD OF FULL REALIZATION OF EXPORT PROCEEDS. THIS CIRCULAR OF RBI WAS NOT C ONSIDERED BY THE AUTHORITIES BELOW WHILE DECIDING ISSUE REGARDING AL LOWABILITY OF EXEMPTION U/S 10A. MOREOVER, IN THE SUBSEQUENT YEA R, I.E. ASSESSMENT YEAR 2008-09, THE A.O. HAS ALLOWED TO TH E ASSESSEE, EXEMPTION U/S 10A AS PER THE ASSESSMENT ORDER PASSE D BY HIM U/S 143(3). BUT THE FACTS OF THIS YEAR ARE NOT AVAILAB LE BEFORE US AS TO WHETHER IN THIS YEAR, THE SALE PROCEEDS WERE BROUGH T IN INDIA BY THE ASSESSEE WITHIN THE PRESCRIBED PERIOD OF 6 MONTHS O R IT WAS BROUGHT INTO INDIA AFTER THAT PERIOD. CONSIDERING ALL THES E FACTS, WE FEEL THAT IN THE INTEREST OF JUSTICE, THE MATER SHOULD GO BAC K TO THE FILE OF THE A.O. FOR A FRESH DECISION AFTER CONSIDERING THE CIR CULAR ISSUED BY RBI AND ALSO AFTER CONSIDERING THE ASSESSMENT ORDER PAS SED BY THE A.O. IN THE ASSESSEES OWN CASE FOR THE SUBSEQUENT YEAR I.E. ASSESSMENT YEAR 2008-09 AND AFTER FINDING OUT AS TO WHETHER, T HE FACTS IN THE PRESENT YEAR ARE SIMILAR TO THE FACTS IN THE NEXT Y EAR. THE A.O. SHOULD PASS NECESSARY ORDER AS PER LAW AS PER ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 6. PRONOUNCED IN THE OPEN COURT ON 11 TH FEB., 2011. SD./- SD./- (R. P. TOLANI) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:11 TH FEB., 2011 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI