Sh. Ashok Verma, Jalandhar V. The Deputy Commissioner of Income tax, Jalandhar

ITA 420/ASR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5752 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 11-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ASHWANI GUPTA
• Section: 80HHC; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, VICE PRESIDENT AND SH. MEHAR SINGH, ACCOUNTANT MEMBER I.T.A. NO.420(ASR)/2010 ASSESSMENT YEAR:2002-03 PAN :AAJPV11883B SH. ASHOK VERMA VS. THE DY. COMMR. OF INCOME-TAX, C/O M/S. SAVI INTERNATIONAL RANGE-1, JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. ASHWANI GUPTA, CA RESPONDENT BY: SH. TARSEM LAL, DR ORDER PER MEHAR SINGH, AM, THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER OF THE CIT(A), JALANDHAR, DATED 13.08.2010, PASSED UNDER SECTION 250(6) OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER REFERRED TO IN SHORT THE ACT), FOR THE ASSESSMENT YEAR 2002-03. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LD. CIT(A), HAS GRAVELY ERRED IN REJEC TING THE GROUND OF APPEAL THAT LD. DCIT HAS GRAVELY ERRED IN OPENING THE ASSESSMENT FOR THIS YEAR. THE CONDITION PRECEDE NT REQUIRED FOR ISSUING NOTICE U/S 148 OF THE ACT BEING NOT PRE SENT, THE NOTICE FOR REASSESSMENT AS ISSUED WAS BAD IN LAW A ND HENCE ALL 2 CONSEQUENTIAL PROCEEDINGS INCLUDING THE IMPUGNED O RDER OF WORTHY DCIT BEING BAD IN LAW IS REQUIRED TO BE QUAS HED. 2. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND AS PER LAW, THE WORTHY DCIT AS WELL AS LD. CIT(A) HAS GRAVELY ERRED IN REDUCING THE CLAIM OF THE ASSESSEE FIRM UN DER SECTION 80HHC OF THE ACT, FROM 36522333/- TO THE TUNE OF RS.35920129/-, AFTER DEDUCTING DFRC AMOUNTING TO RS.954767/- FROM CALCULATION OF DEDUCTION ANNEXED B Y THE ASSESSEE, BY MAKING WRONG ASSUMPTION THAT WHOLE REC EIPT OF DFRC IS PROFIT ON ITS SALE. 3. IN THESE REGARDS, ALL THE FINDINGS OF THE LD. CI T(A) ARE BASELESS, UNLAWFUL AND AGAINST FACTS AND CIRCUMSTANCES OF THE CASE. AND ALSO, LD. CIT(A) HAS ERRED IN REJECTING THE JUDICIA L DECISIONS & JUDICIAL PRINCIPLE, WITHOUT ANY BASIS, RELIED UPON BY APPELLANT. 4. THAT THE APPELLANT ASSESSEE CRAVES THE RIGHT TO AMEND, ADD OR ALTER ANY GROUND OF APPEAL BEFORE THE APPEAL IS FIN ALLY DISPOSED OFF. 3. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, THE LD. COUNSEL FOR THE ASSESSEE, DID NOT PRESS GROUND NO.1, HENCE, THE SAM E IS DISMISSED AS NOT PRESSED. 4. GROUND NOS. 3 & 4 RAISED BY THE ASSESSEE ARE GE NERAL IN NATURE, HENCE, WE DO NOT CONSIDER IT ESSENTIAL TO ADJUDICAT E THE SAME. 5. IN GROUND NO.2, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE LD. CIT(A) ERRED IN REDUCING THE CLAIM OF THE ASSE SSEE FIRM UNDER SECTION 80HHC OF THE ACT FROM RS.36522333 TO THE TUNE OF RS .35920129/-, AFTER DEDUCTING DFRC AMOUNTING TO RS. 954767/- FROM CALCU LATION OF DEDUCTION ANNEXED BY THE ASSESSEE, BY MAKING WRONG ASSUMPTION THAT WHOLE RECEIPT OF DFRC IS PROFIT ON ITS SALE. THE LD. COUNSEL FOR THE ASSESSEE EMPHASIZED ON THE SUBMISSIONS MADE BY HIM IN THE COURSE OF ASSESS MENT PROCEEDINGS. FURTHER, HE HAS FILED WRITTEN SUBMISSIONS AND REQUE STED THAT THE SAME MAY BE INCORPORATED IN THE ORDER AND THE SAME ARE REPRODUC ED HEREUNDER: 3 3. MY ONLY SUBMISSIONS, WITH DUE RESPECT TO THIS H ONBLE BENCH TO TAKE THESE ON RECORD IF POSSIBLE, WHICH WE RE SUBMITTED DURING ASSESSMENT PRODUCED (REPRODUCED AT PAGE 5 OF THE ORDER ) THAT USE OF WORD ANY BEFORE PROFIT U/S 28(IIID) AND 28(IIIE) CARRIES GREAT IMPORTANCE AND SPEAKS OUT THE INTENTI ON OF THE STATUTE. AS PER SECTION 28(IIIA), STATUTE HAS HAS U SED THE WORD PROFITS ON SALE OF A LICENSE AND IN SECTIONS 28(II ID) & (IIIE), THE STATUTE HAS SPECIFICALLY INSERTED THE WORD ANY BE FORE PROFIT WHILE MAKING THE AMENDMENT, WHICH SIGNIFIES THAT TH ERE CAN BE PROFITS OR THERE CAN BE NO PROFITS. SO THE INSERTI ON OF WORD ANY BEFORE PROFITS PRESUPPOSES THE COST ELEMENT, WHICH CAN TENDER EITHER PROFITS OR NO PROFITS. YOUR HONOR, AND THIS COST ELEMENT CAN BE TAKEN ONLY THE ENTITLEMENT OF DEPV/DFRC, WHI CH SHALL DERIVE EITHER PROFITS OR LOSS ON TRANSFER. THIS WAS THE CLEAR INTENTION OF LAW MAKERS IN FRAMING AMENDED PROVISIO NS OF SECTION 28(IIID) & (IIIE). THEREFORE, THE FACE VA LUE SHOULD BE DEDUCTED FROM SALE PROCEEDS FOR THE PURPOSES OF ALL OWING DEDUCTION U/S 28HHC. IN HIS OPINION, THIS ASPECT H AS NOT BEEN DISCUSSED IN THE APPELLATE ORDERS, RELIED UPON. 6. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, BOTH THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR WERE FAIR ENOUGH TO CONCEDE THAT THE ISSUE, IN QUESTION, IS SQUARELY COVERED BY THE DECISION O F THE ITAT, AMRITSAR BENCH, AMRITSAR, VIDE ORDER DATED 24 TH DEC.,2010, IN THE CASE OF M/S. F.C. SONDHI & CO. (INDIA) PVT. LTD. JALANDHAR VS. ADDL. COMMISSIONER OF INCOME-TAX, RANGE-1, JALANDHAR AND OTHERS, PASSED I N ITA NOS. 124 & 125 (ASR)/2009 FOR THE ASSESSMENT YEARS 2003-04 % 2004- 05 AND OTHERS, IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. 7. WE HAVE CAREFULLY PERUSED AND CONSIDERED THE RIV AL SUBMISSIONS, FACT OF THE CASE AND THE RELEVANT MATERIAL PLACED ON RE CORD. HAVING GONE THROUGH THE ORDER OF THE ITAT, AMRITSAR BENCH, DATED 24 TH DEC., 2010, IN THE CASE OF M/S. F.C. SONDHI & CO. (INDIA) PVT. LTD. JALANDHAR VS. ADDL. COMMISSIONER 4 OF INCOME-TAX, RANGE-1, JALANDHAR AND OTHERS, PASSE D IN ITA NOS. 124 & 125 (ASR)/2009 FOR THE ASSESSMENT YEARS 2003-04 & 2 004-05 AND OTHERS (COPY OF THE ORDER IS PLACED ON RECORD), WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS SQ UARELY COVERED BY THE AFORESAID DECISION OF THE TRIBUNAL DATED 24 TH DEC.,2010L. THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID ORDER OF THE T RIBUNAL, WE DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 17TH JUNE, 2011. SD/- SD/- (H.L. KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMB ER DATED: 17TH JUNE, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE: SH. ASHOK VERMA C/O SAVI INTERNATIONA L, JALANDHAR. 2. THE DCIT, RANGE-1, JALANDHAR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR DR, AMRISAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.