M/s. Groz Net Industries, New Delhi V. ACIT, New Delhi

ITA 4108/DEL/2009

• Counselvise Citation: 410820114 RSA 2009
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 15-09-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 12-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Assessee Lawyers: RANO JAIN
• Keywords: Reopening of assessment; Competent authority
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `F: NEW DELHI BEFORE SHRI C.L.SETHI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER I.T. A. NO.4108/DEL/2009 ASSESSMENT YEAR : 2002-03 M/S. GROZ NET INDUSTRIES, ASSTT. COMMISSIONER INC OME-TAX, C-7/7, NEW FRIENDS COLONY, VS. CIRCLE 22(1), NEW DE LHI. NEW DELHI. PAN: AAAFG8454E (APPELLANT) (RESPONDENT) APPELLANT BY: SMT. RANO JAIN, CA RESPONDENT BY: SMT. PRATIMA KA USHIK, SR. DR. O R D E R PER C.L. SETHI, JUDICIAL MEMBER: THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER DATED 22.09.2009 PASSED BY THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS) PERTAINING TO THE ASSESSMENT YEAR 2002-03. 2. THIS APPEAL WAS DISPOSED OF EARLIER BY THE TRIBU NAL VIDE CONSOLIDATED ORDER DATED 17.12.2009. WHILE DECIDING THIS APPEAL BY ORDER DATED 17.12.209, THE GROUNDS NO.1 & 2 REGARDING VALIDITY OF REOPENING OF ASSESSMENT, WERE REJECTED AS THE SAME WERE NOT PRES SED BY THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. GROUND NO.3 WITH REGARD TO THE QUESTION OF DISALLOWANCE OF AMOUNT OF DEPB FOR THE PURPOSE OF DEDUCTION 2 U/S 80HHC WAS DECIDED BY THE TRIBUNAL IN THE LIGHT OF THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF TOPMAN EXPORT VS. ITO, 318 ITR (AT) 87. AGAINST THE ORDER DATED 17.12.2009 OF THE TRIBUNAL, THE REVENUE PREFERRED AN APPEAL BEFORE THE HONBLE HIGH COURT. THE HONBLE HIGH COURT OF DELHI VIDE DECISION DATED 4 TH MARCH, 2011 IN ITA NO.1716/10, HAS RESTORED THIS MATTER BACK TO THE TRIBUNAL TO DE CIDE THE APPEAL ON MERIT AFTER TAKING INTO ACCOUNT THE FACTUAL POSITION OF T HE CASE. THE HONBLE HIGH COURT HAS OBSERVED AS UNDER:- THE DECISION OF THE ITAT SPECIAL BENCH, MUMBAI IN THE CASE OF TOPMAN EXPORT VS. ITO IN ITA NO. 5769/MUM./ 2006 WAS DECIDED ON DATED 11 TH AUGUST 2009. BY THAT JUDGMENT, THE SPECIAL BENCH OF THE TRIBUNAL HAS HELD THAT THE FAC E VALUE OF DEPB IS CHARGEABLE TO TAX U/S 28(IIIB) AT THE TIME OF ACCRUAL OF INCOME, THAT IS, WHEN THE APPLICATION FOR DEPB IS F ILED WITH THE COMPETENT AUTHORITY PURSUANT TO EXPORTS AND PROFIT IN SALE OF DEPB REPRESENTING THE EXCESS OF SALE PROCEEDS OF DE PB OVER ITS FACE VALUE IS LIABLE TO BE CONSIDERED U/S 28(II ID) AT THE TIME OF ITS SALE. THE REVENUE HAD FILED THE APPEAL IN THE HIGH COURT ADJUDICATE AT BOMBAY AGAINST THE AFORESAID DECISION OF THE SPECIAL BENCH OF THE ITAT. THE BOMBAY HIGH COURT H AS REVERSED THE DECISION OF THE TRIBUNAL AND THE JUDGM ENT OF THE BOMBAY HIGH COURT IS REPORTED AS COMMISSIONER OF IN COME TAX VS. KALPATARU COLOURS AND CHEMICALS, 328 ITR 45 1. SINCE THE TRIBUNAL HAD SIMPLY FOLLOWED SPECIAL BEN CH DECISION IN TOPMAN EXPORTS (SUPRA) WHICH STANDS OVE R RULED, WE SET ASIDE THE ORDER PASSED BY THE TRIBUNAL IN AL L THESE CASES AND REMIT THE CASES BACK TO THE TRIBUNAL TO DECIDE THESE APPEALS ON MERITS AFTER TAKING INTO ACCOUNT FACTUAL POSITIO N IN ALL THESE CASES. 3 3. HENCE, THE MATTER HAS BEEN AGAIN PLACED BEFORE T HE TRIBUNAL FOR FRESH DECISION. 4. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE ORDERS OF THE AUTHORITIES BELOW. 5. IN THIS CASE, THE ASSESSING OFFICER DISALLOWED T HE ASSESSEES CLAIM OF DEDUCTION UNDER SEC. 80HHC IN RESPECT OF DEPB INCOM E BY OBSERVING THAT THE TWO CONDITIONS PROVIDED UNDER THE THIRD PROVISO APPENDED TO SEC. 80HHC OF THE ACT, HAVE NOT BEEN SATISFIED. THE ORD ER OF THE AO ON THIS POINT WAS CONFIRMED BY THE CIT(A). 6. ON AN APPEAL BEFORE THE TRIBUNAL, THE ISSUE WAS DECIDED AFTER FOLLOWING THE DECISION OF SPECIAL BENCH OF TRIBUNAL IN THE CASE OF TOPMAN EXPORTS (SUPRA). THE HONBLE HIGH COURT OF DELHI I N THE AFORESAID DECISION DATED 18-02-2011 HAS OBSERVED THAT THE BOMBAY HIGH COURT HAS REVERSED THE DECISION OF TRIBUNAL IN THE CASE OF TOPMAN EXPORTS VS. ITO AND THE SAID JUDGMENT OF THE BOMBAY HIGH COURT IS REPORTED AS CI T VS. KALPATARU COLOURS AND CHEMICALS, 328 ITR 451 (BOM.). 7. AFTER HEARING BOTH THE PARTIES AND HAVING REGARD TO ALL THE FACTS THAT ALL THE DETAILS WITH REGARD TO DEPB RECEIPTS ARE NOT AV AILABLE ON RECORD, AN UNDERSTANDING IS ARRIVED TO RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR HIS FRESH DECISION AFTER EXAMINING THE FACTS OF THE PRESENT CASE AND AFTER 4 APPLYING THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. KALPATARU COLOURS AND CHEMICALS (SUPRA) OR OTHE RWISE AFTER APPLYING THE LATEST POSITION OF LAW ON THE ISSUE AT THE TIME OF PASSING THE ORDER BY THE AO. THE AO SHALL PROVIDE REASONABLE OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE. THE ASSESSEE SHALL PRODUCE ALL THE DETAILS AND PART ICULARS WITH REGARD TO THE DEPB RECEIPTS IN ORDER TO ENABLE THE AO TO DECIDE T HE ISSUE AS PER LAW. WE ORDER ACCORDINGLY. 8. HENCE, THE ISSUE INVOLVED IN GROUND NO.3 OF THIS APPEAL IS DECIDED IN THE MANNER AS INDICATED ABOVE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE WITH REGARD TO GROUND NO.3 IS TREATED TO BE ALLOWED FOR A STATISTICAL PUR POSE. 10. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT IMMEDIATELY AFTER THE HEARING WAS OVER ON 15 TH SEPTEMBER, 2011. SD/- SD/- (B.C. MEENA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15 TH SEPTEMBER, 2011. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) BY ORDER 5. DR *MG DEPUTY REGISTRAR, ITAT.