ITO, Ward - 8(4), Kolkata, Kolkata V. M/s. Smitabh Intercon Limited, Kolkata

ITA 455/KOL/2012

• Counselvise Citation: 45523514 RSA 2012
• Duration Of Justice: 2 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2002-2003
• Appeal Filed On: 26-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: USMANI
• Assessee Lawyers: SWATI BAID
• Section: 10B

Judgement Text

I.T.A. NO. 455/KOL./2012 ASSESSMENT YEAR: 2002-2003 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 455/KOL. / 2012 ASSESSMENT YEAR : 2002-2003 INCOME TAX OFFICER,.................. ...APPELLANT WARD-8(4), KOLKATA, AAYAKAR DAKSHIN, 4 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 -VS.- M/S. SMITABH INTERCON LIMITED,................... .......RESPONDENT VARDAAN, SUITE NO. 406, 4 TH FLOOR, 25A, CAMAC STREET, KOLKATA-700 016 [PAN : AADCS 6543 C] APPEARANCES BY: SHRI S.H. USMANI, JCIT, SR. D.R., FOR THE DEPARTMENT SMT. SWATI BAID, C.A., FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JUNE 24, 2014 DATE OF PRONOUNCING THE ORDER : JUNE 25, 2014 O R D E R PER GEORGE MATHAN: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXII, KOLKATA IN APPEAL NO. 29/CIT(A)-XXXII/11-12/R&T/8(4)/KOL. DATED 29.12.201 1 FOR THE ASSESSMENT YEAR 2002-03. 2. SHRI S.H. USMANI, JCIT, SR. D.R. REPRESENTED ON BEHALF OF THE REVENUE AND SMT. SWATI BAID, C.A., REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IN REVENUES APPEAL, REVENUE HAS RAISED THE FOLL OWING GROUND:- I.T.A. NO. 455/KOL./2012 ASSESSMENT YEAR: 2002-2003 PAGE 2 OF 3 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF EXEMP TION OF RS.35,53,873/- U/S 10B OF THE I.T. ACT, 1961. 4. IT WAS SUBMITTED BY THE LD. SR. D.R. THAT IN THE COURSE OF ASSESSMENT IT WAS NOTICED THAT THE ASSESSEE HAD CLAIMED DEDUCT ION UNDER SECTION 10B TO AN EXTENT OF RS.35,53,873/-, BUT IT WAS ALSO NOT ICED THAT THE ASSESSEE HAD MADE DOMESTIC SALES TO THE TUNE OF RS.88,99,337 /-. IT WAS THE SUBMISSION THAT CONSEQUENTLY THE ASSESSING OFFICER HAD HELD THAT THE ASSESSEE WAS NOT ENTITLED TO GET THE BENEFIT OF EXE MPTION UNDER SECTION 10B OF THE ACT. IT WAS THE SUBMISSION THAT ON APPEA L LD. CIT(APPEALS) HAD DELETED THE DISALLOWANCE AND HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 10B AS CLAIMED. IT WAS THE SUBMISSION THAT THE ORDER OF LD. CIT(APPEALS) WAS LIABLE TO BE REVERSED . LD. SR. D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFF ICER. 5. IN REPLY, LD. A.R. SUBMITTED THAT AS PER THE PRO VISIONS OF SECTION 10B(4), THE DEDUCTION UNDER SECTION 10B WAS TO BE C OMPUTED ON PRO-RATA BASIS OF THE EXPORT TURNOVER AND THE LOCAL TURNOVER . IT WAS THE FURTHER SUBMISSION THAT THE LD. CIT(APPEALS) HAD TAKEN INTO CONSIDERATION THE FORM NO. 56G WHEREIN THE COMPUTATION OF THE DEDUCTI ON UNDER SECTION 10B WAS PROVIDED. LD. A.R. DREW OUR ATTENTION TO PA GES 2-5 OF THE PAPER BOOK WHICH SHOWED THE FORM 56G ALONGWITH THE COMPUT ATION OF THE DEDUCTION UNDER SECTION 10B. IT WAS THE FURTHER SUB MISSION THAT AS PER CRITERIA PRESCRIBED 100% EXPORT ORIENTED UNIT (EOU) IS ELIGIBLE TO SELL UPTO 50% OF THE FOB VALUE OF THEIR EXPORTS IN THE D OMESTIC TARIFF AREA IN ACCORDANCE WITH THE EXPORT IMPORT POLICY OF THE GOV ERNMENT OF INDIA. IT WAS THE SUBMISSION THAT THE TOTAL TURNOVER OF THE A SSESSEE WAS ONLY RS.11,63,43,912/- AND THE EXPORT TURNOVER WAS RS.10 ,74,44,575/- AND THE DOMESTIC TARIFF AREA (DTA) SALES WAS ONLY RS.88,99, 337/-. IT WAS THE SUBMISSION THAT CONSEQUENTLY LD. CIT(APPEALS) HAD R IGHTLY ALLOWED THE ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 10B OF THE ACT. I.T.A. NO. 455/KOL./2012 ASSESSMENT YEAR: 2002-2003 PAGE 3 OF 3 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ORDER OF THE LD. CIT(APPEALS) CLEARLY SHOWS THAT THE LD. CIT (APPEALS) HAD TAKEN INTO CONSIDERATION THE FACT THAT UNDER THE EXPORT I MPORT POLICY OF THE GOVERNMENT OF INDIA, AN ASSESSEE WHO IS AN 100% EOU IS ENTITLED TO SELL 50% OF THE FOB VALUE OF THEIR EXPORTS IN THE DOMEST IC TARIFF AREA. FURTHER THE COMPUTATION OF THE DEDUCTION UNDER SECTION 10B AS PROVIDED IN SUB- SECTION 4 OF SECTION 10B CLEARLY SHOWS THAT THE SAI D PROVISION DOES RECOGNIZE THE SALE IN THE DOMESTIC TARIFF AREA IN S O FAR AS THE DEDUCTION UNDER SECTION 10B IS ON A PROPORTIONATE BASIS. THES E FINDINGS OF THE LD. CIT(APPEALS) HAVE NOT BEEN REBUTTED BY THE REVENUE. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE FINDING OF THE LD. CIT(APPEALS) IS ON RIGHT FOOTING AND DOES NOT CALL FOR ANY INTER FERENCE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JUNE, 2014. SD/- SD/- SHAMIM YAHYA GEORGE MATHAN (ACCOUNTANT MEMBER) (JU DICIAL MEMBER) KOLKATA, THE 25 TH DAY OF JUNE, 2014 COPIES TO : (1) INCOME TAX OFFICER, WARD-8(4), KOLKATA, AAYAKAR DAKSHIN, 4 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (2) M/S. SMITABH INTERCON LIMITED, VARDAAN, SUITE NO. 406, 4 TH FLOOR, 25A, CAMAC STREET, KOLKATA-700 016 (3) COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.