AGIO PHARMACEUTICALS LTD, MUMBAI V. DCIT 8(1), MUMBAI

ITA 408/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4197 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-06-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 18-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 408/MUM/2012 ASSESSMENT YEAR : 2002-03 M/S. AGIO PHARMACEUTICALS LTD. A-38, NANDJYOT INDUSTRIAL ESTATE, ANDHERI KURLA ROAD ANDHERI (E) MUMBAI-400 072. PAN NO. AABCA 8426 A VS. ACIT 8(1) MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : M. SUBRAMANIAN REVENUE BY : SHRI MANOJ KUMAR DATE OF HEARING : 26.06.2013 DATE OF PRONOUNCEMENT : 05.07.2013 O R D E R PER B. RAMAKOTAIAH, AM: THIS IS AN ASSESSEES APPEAL AGAINST THE ORDER OF C IT(A) -16 DATED 22.11.2011. THE ASSESSEE HAS RAISED THREE GROUNDS. GROUND NO.1 AND 2 IS WITH REFERENCE TO RE-OPENING OF THE ASSESSMENT W HICH WERE NOT PRESSED DURING THE COURSE OF PRESENT APPEAL. GROUND NO. 3 I S AS UNDER:- 3.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. AO ERRED IN RE-COMPUTING THE DEDUCTION ALLOWABLE U/S. 80HHC OF THE INCOME TAX ACT AND ALLOWING THE SAME AT RS.92,71,82 8/- AS AGAINST RS.1,74,48,179/- CLAIMED BY THE APPELLANT. ITA NO. 408/M/12 A.Y.02-03 M/S. AGIO PHARMACEUT ICALS LTD. 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSMENT U/S. 143(3) R.W.S. 147 WAS COMPLETED ON 28.02.2006 DETER MINING TOTAL INCOME AT RS.1,87,92,117/-. IN THE ASSESSMENT THE LD. AO DISALLOWED THE ASSESSEE S CLAIM OF DEDUCTION U/S. 8OHHC IN RESPEC T OF DEPB. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER THE ASSESSEE FILE D AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) VIDE HIS ORDER DATED 28. 11.2006 CONFIRMED THE ACTION OF THE AO IN RESPECT OF DISALLOWANCE OF EXC ESS DEDUCTION U/S. 8OHHC ON ACCOUNT OF DEPB. HOWEVER, THE LD. CIT(A) D IRECTED THE AO TO RE-COMPUTE THE DEDUCTION U/S. 8OHHC IN RESPECT OF F OREIGN EXCHANGE FLUCTUATION GAIN BY INCLUDING IN THE NUMERATOR AND THE DENOMINATOR. THE LD. CIT(A) FURTHER DIRECTED THE AO TO EXCLUDE DEPB FROM TOTAL TURNOVER AS PER THE DECISION OF THE HONBLE BOMBAY HIGH COUR T IN THE CASE OF SUDARSHAN CHEMICALS INDUSTRIES LTD (245 ITR 769). R EGARDING THIS PART RELIEF ALLOWED BY THE LD. CIT(A) NO FURTHER APPEAL HAS BEEN FILED BY THE DEPARTMENT. THE PART RELIEF GIVEN BY THE LD. C1T(A) IS DULY TAKEN CARE BY THE AO IN THIS ORDER BY THE AO. AGGRIEVED BY THE AF ORESAID ORDER OF THE LD. CIT(A), THE ASSESSEE FILED APPEAL BEFORE THE TR IBUNAL . BEFORE THE TRIBUNAL, THE ASSESSEE RAISED AN ADDITIONAL GROUND CHALLENGING THE INITIATION OF REASSESSMENT PROCEEDINGS. THE ITAT, V IDE ITS ORDER DATED 30.03.2009 IN ITA NO.531/MUM/2007, HAS SET ASIDE T HE ORDER TO THE FILE OF THE AO WITH THE DIRECTION THAT THE AO IS TO SUPPLY A COPY OF REASONS OF REOPENING, ENABLING THE ASSESSEE TO RAI SE OBJECTIONS AND THEN DECIDE AS PER LAW. IN VIEW OF THE DIRECTIONS OF THE HONBLE ITAT, THE AO PROVIDED REASONS FOR REOPENING OF THE ASSESSMENT AN D REQUESTED TO SUBMIT THE CONTENTION/OBJECTION RAISED BY THE ASSES SEE. IN REPLY, THE ASSESSEE OBJECTED THE REOPENING PROCEEDINGS BY STA TING THAT THE TAXATION LAW (AMENDMENT) ACT, 2005, NO.55 OF 2005 DATED 28.1 2.2005 ARE SUBSEQUENT TO THE ASSESSMENT YEAR 2002-03. THE ASS ESSEE FURTHER SUBMITTED THAT THE REASSESSMENT BASED ON AMENDMENT IS NOTHING BUT CHANGE OF OPINION AND IS INVALID. ITA NO. 408/M/12 A.Y.02-03 M/S. AGIO PHARMACEUT ICALS LTD. 3 2.1 AO HOWEVER REJECTED THE OBJECTIONS OF THE ASSES SEE AND CALCULATED THE DEDUCTION U/S. 80HHC EXCLUDING THE DEPB AMOUNT THEREBY RESTRICTING THE ALLOWANCE. THE LD. CIT(A) FOLLOWING THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. KALPATARU COLOURS & CHEMICALS (ITAL NO.2887/2009) DATED 28.06.2010 UPHE LD THE CALCULATION MADE BY THE ASSESSING OFFICER. 3. IT WAS FAIRLY ADMITTED BY BOTH THE PARTIES THAT THIS ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF H ON'BLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS (342 ITR 49) AND ACCO RDINGLY THE MATTER HAS TO BE RESTORED TO AO TO WORKOUT THE DEDUCTION U /S 80HHC IN ACCORDANCE WITH THE PRINCIPLES LAID DOWN BY THE HON 'BLE SUPREME COURT IN THE ABOVE REFERRED JUDGMENT. THEREFORE, AO IS DI RECTED TO RE-COMPUTE THE DEDUCTION ALLOWABLE U/S. 80HHC OF THE ACT. THE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05.07.2013. SD/- SD/- (VIVEK VARMA) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 05.07. 2013. JV. ITA NO. 408/M/12 A.Y.02-03 M/S. AGIO PHARMACEUT ICALS LTD. 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.