DCIT, Alappuzha V. M/s N.C.John & Sons P.Ltd, Alappuzha

ITA 465/COCH/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4582 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2011
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 05-04-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 10-08-2009
• Court: TRIBUNAL
• Department Lawyers: S C SONKAR
• Assessee Lawyers: S MAHADEVAN CAAR
• Section: 234B; 10B

Judgement Text

IN THE INCOME TAX APPELLAT E TRIBUNAL COCHIN BEN CH, COCHIN BEFORE S/SHRI N.VIJAYAKUMARAN, JM AND SANJAY AR ORA, AM I.T.A NOS. 438 & 465/COCH/2009 ASSESSMENT YEAR: 2006-07 N.C. JOHN & SONS (P.) LTD., W-16/329, P.O. BOX 17, ALAPPUZHA - 688 001 [PAN: AABCN 0264H] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, ALLEPPEY. (ASSESSEE-APPELLANT) (REVENUE-RESPONDENT) (AND VICE VERSA) ASSESSEE BY SHRI S. MAHADEVAN, CA-AR REVENUE BY SHRI S.C.SONKAR, CIT-DR O R D E R PER SANJAY ARORA, AM: THIS IS A SET OF CROSS-APPEALS, I.E., BY THE ASSESS EE AND THE REVENUE, ARISING OUT OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV, KOCHI DATE D 22.5.2009 FOR THE ASSESSMENT YEAR (A.Y.) 2006-07. THE SAME RAISING COMMON ISSUES ; THE APPEALS WERE HEARD TOGETHER, AND ARE BEING DISPOSED OF VIDE A COMMON, CONSOLIDAT ED ORDER. 2. WE SHALL TAKE UP THE ASSESSEES APPEAL, BEING SENIOR, FIRST. THE SAME RAISES THREE GROUNDS, OF WHICH THE FIRST IS GENERAL IN NATURE, W ARRANTING NO ADJUDICATION. THE PRINCIPAL GROUND IS GROUND NO. 2 (I), WHICH CHALLENGES THE AP PORTIONMENT OF THE COMMON EXPENSES BETWEEN THE ASSESSEES EOU AND NON-EOU DEPARTMENTS ON THE BASIS OF TURNOVER, I.E., TOWARDS DETERMINING THE CHARGEABLE PROFITS OF THE A SSESSEES UNITS ELIGIBLE FOR CLAIM U/S. 10B OF THE INCOME-TAX ACT, 1961 ('THE ACT', HEREINA FTER). OPENING THE ARGUMENTS ON BEHALF OF THE ASSESSEE, THE LD. AR, ITS COUNSEL, VE RY FAIRLY CONCEDED TO THE ISSUE HAVING BEEN DECIDED BY THE TRIBUNAL AGAINST THE ASSESSEE F OR THE EARLIER THREE YEARS, I.E., A.Y. 2003-04 TO 2005-06, ADVERTING TO ORDERS IN ITS CASE FOR THE RELEVANT YEARS, FILED AS ANNEXURE VI & VII OF ITS PAPER-BOOK (PB). ITA.NOS.438 & 465 /COCH/2009 2 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MA TERIAL ON RECORD. THE ISSUE STANDS EXAMINED IN DETAIL BY THE TRIBUNAL IN THE ASSESSEE S CASE FOR THE EARLIER YEARS, I.E., VIDE PARA 2 TO 4 OF ITS ORDER FOR A.Y. 2003-04 AND 2004- 05 ( DATED 12.10.2009) AND PARA 3.1 TO 3.6 FOR A.Y. 2005-06 (DATED 15.9.2010), DISCUSSING THE ISSUE IN ALL ITS RESPECTS (COPIES ON RECORD). RESPECTFULLY FOLLOWING THE SAME, WE DECID E LIKEWISE FOR THE CURRENT YEAR AS WELL, AND THE ASSESSING OFFICER (AO) IS DIRECTED TO FOLLO W THE DIRECTIONS ISSUED BY THE TRIBUNAL IN ITS APPEAL FOR A.Y. 2005-06 (SUPRA). WE DECIDE ACCORDINGLY. 4. GROUND NO. 2(II), WHICH IS AN ALTERNATIVE GROUND TO GD. 2(I), WAS NOT PRESSED BY THE LD. AR AT THE TIME OF HEARING, AND IS, THUS, DI SMISSED AS NOT PRESSED. 5. GROUND NO. 3 CHALLENGES THE LEVY OF INTEREST U/S . 234B AND 234C OF THE ACT ON THE BASIS THAT THE ADDITION TO THE RETURNED INCOME HAS ARISEN DUE TO THE REDUCTION IN DEDUCTION U/S. 10B, WHICH WAS NOT ANTICIPATED WHILE FILING TH E RETURN OF INCOME. EVEN AS CONCEDED TO BY THE LD. AR DURING THE HEARING, THIS ISSUE HAS BEEN THE SUBJECT MATTER OF ADJUDICATION BY THE TRIBUNAL IN ITS OWN CASE FOR A.Y. 2005-06 (I N I.T.A. NO. 950/COCH/2008 DATED 15.9.2010), AND, AS SUCH, IS TO BE DECIDED AGAINST IT; THERE BEING NO CHANGE IN THE FACTS OR THE LAW IN THE MATTER WITH REFERENCE TO THE IMMEDIA TELY PRECEDING YEAR. AS REGARDS THE INTEREST U/S. 234C, AS ALSO OBSERVED DURING THE HEA RING, THE SAME IS NOT MAINTAINABLE IN- AS-MUCH AS THE INTEREST UNDER THE SAID SECTION IS O NLY ON THE BASIS OF THE RETURNED INCOME AND IS NOT DEPENDENT ON THE ASSESSED INCOME. WE DE CIDE ACCORDINGLY, DISMISSING THE SAID GROUND. 6. THE REVENUES APPEAL (ITA NO. 465/COCH/2009) AGI TATES THE DIRECTION BY THE LD. CIT(A) TO DEDUCT THE DIRECT EXPENSES IN COMPUTING T HE COMMON OVERHEAD EXPENSES FOR APPORTIONMENT (ON THE BASIS OF TURNOVER), IN VIEW O F SECTION 10B (4). THE SAID MATTER STANDS ALSO EXAMINED BY THE TRIBUNAL IN THE ASSESSE ES OWN CASE FOR A.Y. 2005-06 (IN I.T.A. NO. 1000/COCH./2008 DATED 15.9.2010), WHILE DECIDING THE REVENUES APPEAL ON AN IDENTICAL GROUND BY THE REVENUE FOR THAT YEAR. SEC TION 10B IS A SEPARATE CODE IN ITSELF, AND IT IS ONLY THE INCOME DERIVED FROM ELIGIBLE UNI T THAT IS EXIGIBLE TO DEDUCTION U/S. 10B(I). REFERENCE IN THIS REGARD MAY BE DRAWN TO P ARA 3 OF THE TRIBUNAL ORDER FOR A.Y. ITA.NOS.438 & 465 /COCH/2009 3 2005-06, WITH PARTICULAR REFERENCE TO SUB-PARAS 3.5 AND 3.6. THERE BEING NO CHANGE IN THE FACTS OR THE LAW IN THE MATTER, WE, THEREFORE, FOLL OWING THE SAME, DECIDE LIKEWISE FOR THE CURRENT YEAR AS WELL. WE DECIDE ACCORDINGLY. 7. IN THE RESULT, BOTH THE ASSESSEES APPEAL AND TH E REVENUES APPEAL ARE DISMISSED. . SD/- SD/ - (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 27TH APRIL, 2011 GJ COPY TO: 1. N.C. JOHN & SONS (P.) LTD., W-16/329, P.O. BOX 1 7, ALAPPUZHA 688 001 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, ALLEPPEY. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV, KOC HI. 4. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) ITA.NOS.438 & 465 /COCH/2009 4