Sagar Drugs & Pharmaceuticals Ltd., Ahmedabad V. The ACIT.,Circle-8, Ahmedabad

ITA 4042/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9382 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-11-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 15-12-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K DHANISTA
• Assessee Lawyers: S N SOPARKAR
• Keywords: Retrospective amendment; Set aside
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI G.D.AGRAWAL, VICE-PRESIDENT (AZ) AND SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER DATE OF HEARING : 24/11/2010 DRAFTED ON:24/11/ 2010 ITA NO. 4042/AHD/2008 ASSESSMENT YEAR : 2002-03 SAGAR DRUGS & PHARMACEUTICALS LTD. SAGAR NR.SAHAJANAND COLLEGE AMBAWADI AHMEDABAD VS. THE ASSTT.CIT CIRCLE-8 AHMEDABAD PAN/GIR NO. : AADCS 9311E (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI S.N. SOPARKAR RESPONDENT BY: SHRI R.K.DHANISTA, SR. D.R. O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WHICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-XIV , AHMEDABAD DATED 23/09/2008 AND THE SOLITARY GROUND IS AS FOL LOWS:- (2) THE LEARNED COMMISSIONER (APPEAL) ERRED IN C ONFIRMING THE ACTION OF THE ASSESSING OFFICER IN RESPECT OF NOT A LLOWING THE DEDUCTION U/S.80HHC ON DEPB CREDIT. ALTERNATIVE, WITHOUT PREJUDICE TO ABOVE, FOR THE PU RPOSE OF COMPUTING BUSINESS PROFIT 90% OF DEPB CREDIT MAY BE EXCLUDED FROM THE INCOME COMPUTED UNDER THE HEAD BU SINESS AND PROFESSION. IN OTHER WORDS THE DEPB CREDIT MA Y BE ITA NO. 4042/AHD/2008 SAGAR DRUGS & PHARMACEUTICALS LTD. VS. ASST.CIT ASST.YEAR 2002-03 - 2 - TAXED UNDER THE HEAD INCOME FROM BUSINESS OR PROFE SSION AND DEDUCTION U/S.80HHC BE COMPUTED ACCORDINGLY. 2. FACTS IN BRIEF HAS BEEN NARRATED BY THE LEARNED CIT(APPEALS) VIDE PARA 3.1. & 3.2 ARE AS UNDER:- 3.1. THE SECOND GROUND OF APPEAL RELATES TO NON-GR ANTING OF DEDUCTION U/S.80HHC OF THE ACT ON DEPB INCOME. IN THIS CASE, ORIGINAL ASSESSMENT WAS MADE ON 18/3/2005, WHEREIN THE DEDUCTION U/S.80HHC ON THIS INCOME WAS NOT ALLOWED. THE MATTER WENT UPTO THE HON.ITAT, WHO SET ASIDE THE ASSESSMEN T TO THE FILE OF A.O. TO DECIDE THE MATTER AFRESH IN ACCORDANCE WITH THE AMENDMENT IN THE PROVISION OF THE ACT, AFTER GIVING AN OPPORTUNITY TO THE APPELLANT. THE AO HAS PASSED THE IMPUGNED ORDER AND HAS DISALLOWED THE DEDUCTION U/S.890HHC ON DEPB INCOME, AS THE TURNOVER EXCEEDS RS.10 CRORE., ON THE GROUND THAT T HE APPELLANT HAS NOT PROVIDED ANY PIECE OF EVIDENCE AND RELEVANT PAPERS TO SHOW THAT IT SATISFIES THE TWO CONDITIONS AS LAID D OWN IN THE PROVISIONS OF THE SECTION, AS AMENDED. 3.2. THE APPELLANT, DURING THE COURSE OF APPELLATE PROCEEDINGS, HAS SUBMITTED THAT IT SHOULD BE ALLOWED DEDUCTION U /S.80HHC. AFTER CONSIDERING THE SUBMISSIONS OF THE APPELLANT AND THE FACTS OF THE CASE, I DO NOT AGREE WITH THE APPELLANTS SUBMI SSIONS. AS THE TURNOVER EXCEEDS RS.10 CR. AND THE APPELLANT DID NO T GIVE ANY EVIDENCE TO SHOW THAT IT SATISFIES THE TWO CONDITIO NS AS PER THE AMENDED PROVISIONS, THE ACTION OF THE A.O. IS HELD TO BE JUSTIFIED AND THIS GROUND IS REJECTED. 3. THE ISSUE NOW STOOD COVERED BY THE DECISION OF ITAT B BENCH AHMEDABAD IN THE CASE OF INTAS EXPORTS VS. ACIT [ ITA NOS.1819 & 1820/AHD/2008 FOR AYS 2003-04 & 2004-05 RESPECTIV ELY ] ORDER DATED 30/07/2010, WHEREIN THE TRIBUNAL VIDE PARAGRAPH NO. 4 HAS DECIDED THE ISSUE BY OBSERVING AS UNDER: ITA NO. 4042/AHD/2008 SAGAR DRUGS & PHARMACEUTICALS LTD. VS. ASST.CIT ASST.YEAR 2002-03 - 3 - 4. AFTER HEARING BOTH THE SIDES WE ARE OF THE OPIN ION THAT ON ACCOUNT OF THE AMENDMENTS IN SECTION 28(IIIA) WITH RETROSPECTIVE EFFECT FROM 01/04/1962; SECTION 28(IIID) WITH RETROSPECTIV E EFFECT FROM 01/04/1998 AND 28(IIIE) WITH RETROSPECTIVE EFFECT F ROM 01/04/2001 VIDE TAXATION LAW (AMENDMENT) ACT, 2005 AND CONSEQUENT AMENDMENT IN SUB-SECTION(3) OF SECTION 80HHC OF THE I.T. ACT, 19 61 AS WELL AS ON ACCOUNT OF THE INSERTION OF 2 ND , 3 RD AND 4 TH PROVISO TO THE SUB-SECTION, THERE IS NO SCOPE LEFT FOR THIS ASSESSEE TO CLAIM T HE DEDUCTION IN RESPECT OF INCOME ON SALE OF DEPB LICENCE BEING THE TURNOVE R CROSSED THE LIMIT OF RS.10 CRORES AND THE REQUISITE CONDITIONS HAVE N OT BEEN FULFILLED BY THE ASSESSEE. WE FIND NO FALLACY IN THE ORDERS O F THE AUTHORITIES BELOW AND BY PLACING RELIANCE ON EASTMAN INDUSTRIES LTD. VS. DY.CIT REPORTED AS 120 ITD 362 (DELHI), AFFIRM THE SAME. FOR BOT H THE YEARS, THESE GROUNDS OF THE ASSESSEE ARE, THEREFORE, DISMISSED. 3.1. IN ADDITION TO THE ABOVE VERDICT OF THE RESPEC TED CO-ORDINATE BENCH AHMEDABAD; THE LEARNED AUTHORISED REPRESENTAT IVE MR. S.N.SOPARKAR HAS MENTIONED THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. KALPATARU COLOURS & CHEMICAL S REPORTED AS 238 ITR 451[BOM], HOWEVER, THEREIN AS WELL THE HON'BLE COURT HAS EMPHASIZED THE FULFILLMENT OF THE TWIN CONDITIONS F OR THE SAID CLAIM. SINCE THE REVENUE AUTHORITIES HAVE GIVEN A CATEGORI CAL FINDING THAT THOSE CONDITIONS ARE NOT SATISFIED, HENCE, WE HAVE NO REA SON TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT(APPEALS). FOLLOWIN G THE PRINCIPLES ALREADY LAID DOWN, WE HEREBY DISMISS THIS GROUND OF THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE DIS MISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 26/ 11 /2010. SD/- SD/- ( G.D.AGRAWAL ) ( MUKUL KR. SHRAWAT ) VICE PRESIDENT (AZ) JUDICIAL ME MBER AHMEDABAD; DATED 26/ 11 /2010 T.C. NAIR, SR. PS ITA NO. 4042/AHD/2008 SAGAR DRUGS & PHARMACEUTICALS LTD. VS. ASST.CIT ASST.YEAR 2002-03 - 4 - COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XIV, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD 1. DATE OF DICTATION..24/11/2010 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 24/11/2010 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S26.11.10 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 26.11.10 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER