PRAYAS WRITING INSTRUMENTS, MUMBAI V. DCIT 24(3), MUMBAI

ITA 4483/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3051 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 27-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 80HHC

Judgement Text

, , , , INCOME-TAX APPELLATE TRIBUNAL CBENCH M UMBAI , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & PAWAN SINGH, JUDICIAL MEMBER ./I.T.A./4483/MUM/2014 , /ASSESSMENT YEAR: ( 2008-09) M/S. PRAYAS WRITING INSTRUMENTS 113, SATI INDUSTRIAL ESTATE, I.B. PATEL ROAD, GOREGAON (E) MUMBAI-400 063. PAN:AAGFP 6727 P VS. DY. CIT 24(3) ROOM NO.701, C-11, 7 TH FLOOR, BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI-400 051. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI NAVEEN GUPTA-DR ASSESSEE BY: NONE / DATE OF HEARING: 21.06.2016 / DATE OF PRONOUNCEMENT: 21.06.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 15.01.2013 OF CIT(A)-34 , MUMBAI THE ASSESSEE HAS FILED THE PRESENT APPEAL.ASSESSEE-FIRM,ENGAGED IN THE BUSINES S OF MANUFACTURING AND TRADING OF PENS, BALLPENS, MECHANICAL PENCIL AND THEIR PARTS AND COM PONENTS ETC., FILED ITS RETURN ON 30.9.2008 DECLARING TOTAL INCOME AT RS.NIL.THE ASSESSING OFFI CER (AO) COMPLETED ASSESSMENT U/S. 143(3) OF THE ACT ON 30.05.10 DETERMINING THE INCOM E OF THE ASSESSEE AT RS.20.60 LAKHS. 2. THE EFFECTIVE GROUND OF APPEAL IS ABOUT DEDUCTION U NDER CHAPTER- VIA OF THE ACT ON DEPB/DUTY DRAWBACK BENEFITS,AMOUNTING TO RS.12.44 L AKHS.DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD CLA IMED DEDUCTION U/S. 80IB(4) OF THE ACT ON THE RECEIPT OF DUTY DRAWBACK AND FDR INTEREST OF RS .12,44,012/- AND RS.83,648/- RESPECTIVELY. HE HELD THAT AS PER THE PROVISIONS OF SECTION 80IB(4) THE DEDUCTION IN CASE OF AN INDUSTRIAL UNDERTAKING WAS ADMISSIBLE ONLY IN RESPE CT OF PROFITS AND GAINS DERIVED FROM SUCH UNDERTAKING,THAT RECEIPT OF EXPORT INCENTIVES COULD NOT BE CONSIDERED AS DERIVED FROM INDUSTRIAL UNDERTAKING,THAT THE LANGUAGE USED IN SE CTION 80IB(4) WAS THE SAME AS THAT OF SECTION 80HH/80I OF THE ACT. REFERRING TO THE CASES OF STERLING FOODS (234ITR579) AND PANDIAN CHEMICALS (264ITR378),HE HELD THAT THE ASSE SSEE WAS NOT ENTITLED TO DEDUCTION OF RS.12.44 LAKHS IN RESPECT OF DUTY DRAWBACK. 3. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE PREFERRE D AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA) AND MADE SUBMISSIONS BEFORE HIM.IT R ELIED UPON THE CASES OF ELTAK SGS 4483/M/14-PRAYAS WI 2 P.LTD.(300ITR6) AND INDIA GELATINE & CHEMICALS LTD. (275ITR284). AFTER CONSIDERING THE ASSESSMENT ORDER AND THE SUBMISSION OF THE ASSESSEE , THE FAA HELD THAT THE ISSUE BEFORE HIM WAS TO DECIDE AS TO WHETHER THE RECEIPT ARISING OUT OF SALE OF DEPB CREDITS HAD TO BE TAKEN IN ENTIRETY FOR COMPUTATION OF 80HHC OF THE ACT OR NOT .HE REFERRED TO THE CASES OF TOPMAN EXPORTS (31 ITR 87-SB-AT) AND KALPATARU COLOURS AND CHEMICALS LTD. (328 ITR 451). HE ALSO REFERRED TO THE JUDGMENT OF THE HON'BLE SUPREM E COURT DELIVERED IN THE CASE OF TOPMAN EXPORTS AND HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION AS PER THE PROVISIONS OF SECTION 80HHC ON EXPORT PROFIT AND THAT THE BENEFIT OF SUCH DEDUCTION COULD NOT BE DENIED TO THE ASSESSEE.ACCORDINGLY, HE DIRECTED THE AO TO FOLLOW THE JUDGMENT OF THE APEX COURT AND TO BIFURCATE THE TOTAL SALE PROCEEDS OF DEPB INTO TWO COMPARTMENTS. FINALLY, HE ALLOWED THE APPEAL FILED BY THE ASSESSEE. 4. AS STATED EARLIER NO ONE APPEARED ON BEHALF OF THE ASSESSEE. THE DR, ON A QUERY BY THE BENCH STATED THAT ASSESSEE HAD MADE A CLAIM U/S. 80 IB(4) OF THE ACT, THAT THE FAA HAD NOT DEALT WITH THE ISSUE AND HAD ALLOWED THE APPEAL OF THE ASSESSEE, THAT HE HAD WRONGLY HELD THAT THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION U/S. 8 0HHC. 5. WE HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECO RD. WE FIND THAT THE FAA HAD, WHILE DECIDING THE APPEAL, REFERRED TO THE PROVISIONS OF SECTION 80HHC AND HAD ALLOWED THE APPEAL, THAT THE AO HAD MADE DISALLOWANCE WITH REGARD TO CL AIM MADE U/S. 80IB(4) OF THE ACT. WE FIND THAT ASSESSEE HAD NOT FILED ANY APPLICATION U/ S.154 OF THE ACT FOR RECTIFYING THE MISTAKE APPARENT ON RECORD. CONSIDERING THE FACTS OF THE CA SE,WE ARE OF THE OPINION THAT MATTER NEEDS RE-ADJUDICATION BY THE FAA. THEREFORE, IN THE INTER EST OF JUSTICE, MATTER IS RESTORED BACK TO THE FILE OF FAA FOR FRESH ADJUDICATION WHO WOULD AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. EFFECTIVE GROUND OF APPEAL (GOA) IS D ECIDED IN FAVOUR OF THE ASSESSEE IN PART. REST OF THE GROUNDS RAISED BY THE ASSESSEE ARE CONS EQUENTIAL IN NATURE. AS A RESULT APPEAL FILED BY THE ASSESSEE STANDS PAR TLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST , JUNE, 2016. 21 , 2016 SD/- SD/- ( / // / PAWAN SINGH ) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21.06.2016. JV.SR.PS. 4483/M/14-PRAYAS WI 3 / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR G BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.