DCIT, New Delhi V. M/s. Samtel Colour Ltd, New Delhi

ITA 4444/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5662 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 22-03-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 23-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Section: 80HHC

Judgement Text

ITA NO. 4444/DEL/2009 A.Y. 2000-01 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 4444/DEL/2009 A.Y. 2000-01 DY. COMMISSIONER OF INCOME TAX, VS. M/S SAM TEL COLOR LTD., . CIRCLE-7(1), ROOM NO. 312, 3 RD FLOOR, PLOT NO. 7, 6 TH FLOOR, TDI CENTRE, C.R. BUILDING, IP ESTATE, NEW DELHI JASOLA DISTRI CT COMPLEX, NEAR SARITA VIHAR, NEW DELHI (PAN: AAACS6589D) [APPELLANT] (RESPONDENT) ASSESSEE BY : SH. SACHIT JOLLY, ADV. DEPARTMENT BY : SH. T. VASANTHAN, SR. DR ORDER PER SHAMIM YAHYA, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE CIT(A) DATED 23.09.2009 AND PERTAINS TO A.Y. 2000-01. 2. THE ISSUE RAISED IS THAT THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN DIRECTING THE ASSESSI NG OFFICER NOT TO MAKE ANY ADJUSTMENT ON ACCOUNT OF DEDUCTION UNDER SECTION 80H HC WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB. ITA NO. 4444/DEL/2009 A.Y. 2000-01 2 3. IN THIS CASE THE AO HAD DENIED THE CLAIM OF DEDU CTION U/S 80HHC FOR THE PURPOSE OF SECTION 115JA. THE DEDUCTION U/S 80HHC WAS NOT ALLOWED UNDER THE REGULAR PROVISIONS OF INCOME TAX ACT, AS INCOME OF THE ASSESSEE HAS BEEN COMPUTED AT LOSS. 4. UPON ASSESSEES APPEAL LD. CIT(A) REFERRED TO TR IBUNALS DECISION WHEREIN, IT WAS HELD THAT DEDUCTION U/S 80HHC IN THE CASE OF MA T ASSESSMENT IS TO BE WORKED OUT ON THE BASIS OF ADJUSTED BOOK PROFIT AND NOT ON THE BASIS OF PROFIT COMPUTED UNDER THE REGULAR PROVISIONS OF LAW APPLIC ABLE TO COMPUTATION OF PROFITS AND ACCOUNTS OF BUSINESS AND PROFESSIONAL. ACCORDINGLY, LD. CIT(A) DIRECTED THE AO TO COMPUTE THE BOOK PROFIT IN ACCOR DANCE WITH THE ABOVE. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. IT TRANSPIRES THAT THE IDENTICAL ISSUE WAS CONSIDERED BY THIS TRI BUNAL IN ITA NO. 3505/DEL/2008 (AY 2003-04) IN THE CASE OF ACIT VS. M/S TELETUBE E LECTRONICS LTD. THE TRIBUNAL HELD AS UNDER:- 6. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORD S. NONE APPEARED ON BEHALF OF THE ASSESSEE. IT TRANSPIRES THAT HONBLE BOMBAY HIGH COURT IN 318 ITR 252 HAD OVERRULED THE DECISION OF THE SP ECIAL BENCH IN THE SYNCOME FORMULATIONS (I) LTD. AND HELD THAT IT WAS NOT POSSIBLE TO ITA NO. 4444/DEL/2009 A.Y. 2000-01 3 ACCEPT THE CONSTRUCTION THAT THE MAT COMPANIES SHOU LD BE TREATED ON A DIFFERENT FOOTING IN COMPUTING EXPORT PROFITS UNDER SECTION 80HHC FOR THE PURPOSE OF SECTION 115JB. 6.1 IN THIS REGARD, WE ALSO FIND THAT HONBLE MADRA S HIGH COURT IN THE CASE OF CIT VS. MEGNA ELECTRO CASTINGS LTD. 184 TAX MAN 79 AND CIT VS. KG DENIN LTD. 180 TAXMAN 590 HAS HELD THAT IN CASE OF MAT ASSESSMENT DEDUCTION UNDER SECTION 80 HHC IS TO BE WORKED OUT ON THE BASIS OF ADJUSTED BOOK PROFIT UNDER SECTION 115J A AND NOT ON THE BASIS OF PROFIT COMPUTED UNDER REGULAR PROVISIONS O F LAW APPLICABLE TO COMPUTATION OF PROFITS AND GAINS OF BUSINESS AND PROFESSION. 6.2 NOW CONSIDERING THE ABOVE, WE FIND THAT THERE I S HONBLE MUMBAI HIGH COURT DECISION IN WHICH THE ISSUE IS DECIDED AGAINST THE ASSESSEE AND THERE ARE ALSO DECISIONS OF THE HONBLE MADRAS HIGH COURT WHICH ARE IN FAVOUR OF THE ASSESSEE. NO DECISION, DIREC T ON THE POINT, OF HONBLE JURISDICTIONAL HIGH COURT HAS BEEN BROUGHT TO OUR NOTICE. UNDER SUCH CIRCUMSTANCES, WE REFER TO THE HONBLE A PEX COURT DECISION IN THE CASE OF M/S VEGETABLE PRODUCTS LTD. 88 ITR 192, THAT IN THE TAXING PROVISION IF TWO CONSTRUCTIONS ARE PO SSIBLE, ONE FAVOURING ASSESSEE SHOULD BE ADOPTED. 6.3 RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT AND FOLLOWING THE HONBLE MADRAS HIGH COURT DECISION, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 6.2 RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT FROM HONBLE APEX COURT, WE FOLLOW THE HONBLE MADRAS HIGH COURT DECISION AND HOLD THAT ASSESSEE IS ENTITLED ITA NO. 4444/DEL/2009 A.Y. 2000-01 4 FOR DEDUCTION UNDER SECTION 80HHC ON ADJUSTED BOOK PROFIT FOR THE PURPOSE OF SECTION 115JA. ACCORDINGLY, WE CONFIRM THE ORDER O F THE LD. CIT(A) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REV ENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/03/201 0 UPON CONCLUSION OF THE HEARING. SD/- SD/- [A.D. JAIN] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 22/03/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES