DCIT, New Delhi V. M/s Nagesh Knitwears P. Ltd., New Delhi

ITA 4484/DEL/2010

• Counselvise Citation: 448420114 RSA 2010
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 14-10-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 07-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: MUNSHI RAM MANAGER
• Section: 80HHC; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E DELHI BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 4484(DEL)/2010 ASSESSMENT YEAR: 2004-05 DEPUTY COMMISSIONER OF INCOME NAGESH KNITWEARS P. LTD., TAX, CIRCLE 13(1), NEW DELHI. VS. E-4 0, MASJID MOTH, GREATER KAILASH, PART-III, NEW DELHI-48. PAN: AAACB2140D (APPELLANT) (RESPON DENT) APPELLANT BY : SHRI R.S. NEGI, SR. DR RESPONDENT BY: SHR I MUNSHI RAM, MANAGER DATE OF HEARING : 14.10.2011 DATE OF PRONOUNCEMENT: 21.10.2011. ORDER PER K.G. BANSAL : AM THE ONLY GROUND TAKEN IN THIS CASE IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT( APPEALS) ERRED IN DIRECTING THE AO TO ALLOW DEDUCTION U/S 80HHC OF THE INCOME-TAX ACT, 1961 (THE ACT FOR SHORT) IN RESPECT OF EXPORT Q UOTA PREMIUM. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE ISSUE STANDS COVERED BY THE DECISION OF F BE NCH OF DELHI TRIBUNAL IN ITS OWN CASE IN ITA NO. 14(DEL)/2008 FOR ASSESSME NT YEAR 1999-00, DATED ITA NO. 4484(DEL)/2010 2 26.09.2008, A COPY OF WHICH HAS BEEN PLACED IN T HE PAPER BOOK. THIS ORDER PLACED RELIANCE ON THE DECISION OF THE TRIB UNAL IN ASSESSEES CASE FOR ASSESSMENT YEARS 2001-02 AND 2003-04, WHICH READ S AS UNDER:- IN OUR VIEW, IT IS NOT NECESSARY FOR US TO GO IN TO THE ISSUE WHETHER THE LETTER UNDER REFERENCE FROM CBDT IS A CIRCULAR OR NOT. WE FIND THAT THE ASSESSING OFFICER HAS ALREADY TREATED THE PREMIUM ON SALE OF EXPORT QUOTA AS BE ING OF THE SAME NATURE AS PROFIT ON SALE OF IMPORT LICENSES AS MENTIONED IN SECTION 28(IIIA) BECAUSE HE HAS ALREADY DED UCTED 90% OF THE PREMIUM ON SALE OF EXPORT QUOTA FROM THE PR OFIT OF BUSINESS AS PER EXPLANATION (BAA). UNDER THE PRO VISIONS OF EXPLANATION (BAA) ONLY 90% OF THE SUMS REFERRED IN CLAUSES (IIIA), (IIIB) (IIIC) OF SECTION 28 ETC. OR ANY RECEIPTS OF SIMILAR NATURE ARE REQUIRED TO BE EXCLUDED. AS THE ASSE SSING OFFICER HAD DEDUCTED 90% OF PREMIUM ON SALE OF EXPORT QUO TA AS PER EXPLANATION (BAA), HE HAS ALREADY TREATED THE N ATURE OF PREMIUM ON SALE OF EXPORT QUOTA AS THAT OF THE SU M REFERRED IN SECTION 28(IIIA), WHICH RELATES TO RECEIPTS FRO M SALE OF IMPORT LICENSES. ONCE, THE ASSESSING OFFICER H AS TREATED THE NATURE OF PREMIUM ON SALE OF EXPORT LICENSES MENT IONED IN SECTION 28(IIIA), HE CANNOT DENY THE BENEFIT OF IN CREASE AS MENTIONED IN PROVISOS TO SECTION 80HHC(3) AS P ER WHICH 90% OF SUM MENTIONED IN SECTION 28(IIIA) IN THE RAT IO OF EXPORT TURNOVER TO TOTAL TURNOVER HAS TO BE ADDED TO THE PROFIT COMPUTED U/S 80HHC(3). THE CHANDIGARH BENCH OF T HE TRIBUNAL IN CASE OF M/S GATEWAY PVT. LTD.(SUPRA), HAS ALSO ALLOWED THE CLAIM OF THE ASSESSEE IN RELATION T O PREMIUM ON SALE OF EXPORT QUOTA WHILE COMPUTING DEDUCTION U/S 80HHC. IN VIEW OF THE FOREGOING DISCUSSION, WE ARE OF T HE VIEW THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF INCR EASE TO THE PROFIT AS PROVIDED IN THE PROVISO TO SECTION 80HHC(3) IN RELATION TO PREMIUM ON SALE OF EXPORT QUOTA ON SALE OF EXPORT QUOTA ON THE FACTS OF THE CASE. ACCORDINGLY, WE SET A SIDE THE ORDER OF CIT(APPEALS) AND ALLOW THE CLAIM OF THE ASSESSE E. ITA NO. 4484(DEL)/2010 3 2.1 THE TWO BENCHES OF THE TRIBUNAL HAVE HELD THAT THE EXPORT QUOTA PREMIUM IS THE SUM REFERRED TO IN SECTION 28(IIIA) OF THE ACT. THEREFORE, IN TERMS OF PROVISO TO SECTION 80HHC(3), 90% OF THE SUM HAS TO BE CONSIDERED AS PROVIDED THEREUNDER FOR THE PURPOSE OF COMPUTATION OF PROFIT ELIGIBLE FOR THE DEDUCTION. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD. CIT(APPEALS). 3. IN THE RESULT, THE APPEAL IS DISMISSED. SD/- SD/- (RAJPAL YADAV) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- NAGESH KNITWEARS PVT. LTD., NEW DELHI. DCIT, CIRCLE 13(1), NEW DELHI. CIT(A) CIT THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.