ACIT, Karnal V. M/s. Liberty Enterprises, Karnal

ITA 4760/DEL/2009

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69311 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-10-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 16-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Keywords: Opportunity of being heard; Retrospective amendment
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.4760/DEL./2009 (ASSESSMENT YEAR : 2003-04) ACIT, KARNAL CIRCLE, VS. M/S. LIBERTY ENTERPRISE, KARNAL. RAILWAY ROAD, KARNAL. (PAN : AAAFL7275E) CO NO.30/DEL/2010 (IN ITA NO.4760/DEL./2009) (ASSESSMENT YEAR : 2003-04) M/S. LIBERTY ENTERPRISE, VS. ACIT, KARNAL CIRCLE, RAILWAY ROAD, KARNAL. KARNAL. (PAN : AAAFL7275E) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI D.K. MISHRA, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : IN THIS CASE, THE ITA NO.4760/DEL/2009 AND CO NO.3 0/DEL/2010 WAS DECIDED BY THE ITAT. THE RELEVANT PORTION OF TH E ORDER DATED 16 TH FEBRUARY, 2010 IS REPRODUCED AS UNDER :- ITA NO.4760/DEL/2009 CO NO.30/DEL/2010 2 4. HAVING REGARD TO THE ISSUES INVOLVED IN THIS CA SE AND IDENTICAL ISSUE HAS BEEN DECIDED IN SOME OTHER CASE S, WE ARE NOT INCLINED TO GRANT ANY ADJOURNMENT TO THE ASSESS EE AS PRAYED FOR. 5. IN ANOTHER CASE OF SAME GROUP I.E. IN THE CASE OF M/S. LIBERTY SHOES LTD. ITA NO. 1066/DEL/2009, WE, VIDE OUR ORDER DATED 11.02.2010, AFTER HEARING BOTH THE PART IES, HAVE PASSED THE ORDER ON THE IDENTICAL ISSUE AS UNDER:- '2. IN THE COURSE OF HEARING OF THIS APPEAL, THE LD . COUNSEL FOR THE ASSESSEE RAISED ONLY ONE ISSUE ABOUT THE AS SESSEE'S CLAIM OF DEDUCTION U/S. 80HHC WITH REFERENCE TO DEP B RECEIPT/DUTY DRAWBACK AND PREMIUM ON IMPORT LICENSE S, AND IN THIS RESPECT, HE PLACED RELIANCE UPON THE DECISI ON OF INCOME TAX APPELLATE TRIBUNAL, SPECIAL BENCH, MUMBA I, IN THE CASE OF TOPMAN EXPORTS VS. ITO REPORTED IN (200 9) 125 TTJ (MUMBAI)(SB) 289, 3. THE LD. DR WAS HEARD IN THE LIGHT OF THE SUBMISS IONS MADE BY THE ASSESSEE. 4. AFTER CONSIDERING THE ASSESSEE'S SUBMISSIONS, WE FIND IT FIT TO RESTORE THE MATTER BACK TO THE FILE OF TH E AO FOR HIS FRESH DECISION IN THE LIGHT OF THE VIEW TAKEN BY TH E SPECIAL BENCH OF INCOME TAX APPELLATE TRIBUNAL IN THE CASE OF TOPMAN EXPORTS VS. ITO (SUPRA). THE LD COUNSEL FOR THE ASSESSEE HAS ALSO AGREED TO RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR HIS FRESH ADJUDICATION IN THE LIGHT O F THE DECISION OF SPECIAL BENCH OF INCOME TAX APPELLATE T RIBUNAL IN THE CASE OF TOPMAN EXPORTS VS. ITO (SUPRA). WE O RDER ACCORDINGLY. NEEDLESS TO MENTION THAT AO SHALL PROV IDE REASONABLE OPPORTUNITIES OF BEING HEARD TO THE ASSE SSEE WHILE DECIDING THE MATTER AFRESH. 5. IN THE RESULT, THE ASSESSEE'S APPEAL IS PARTLY A LLOWED FOR A STATISTICAL PURPOSE.' 6. RESPECTFULLY FOLLOWING OUR AFORESAID ORDER, WE R ESTORE THE ISSUE BACK TO THE FILE OF THE AO FOR HIS FRESH ADJUDICATION AFTER PROVIDING OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE. THE ISSUE WITH REGARD TO THE VALIDITY OF REASSESSME NT PROCEEDING SHALL ALSO BE DECIDED BY THE AO IN THE C OURSE OF ITA NO.4760/DEL/2009 CO NO.30/DEL/2010 3 FRESH ASSESSMENT PROCEEDINGS IN THE LIGHT OF THE DE CISION OF HON'BLE SUPREME COURT IN THE CASE OF G.K.N. DRIVESH AFT (INDIA) LTD. VS. ITO (2003) 259 ITR 19 (SC), AFTER CONSIDERING THE OBJECTIONS OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE A S WELL AS CROSS OBJECTIONS FILED BY THE ASSESSEE ARE TREATED TO BE ALLOWED FOR STATISTICAL PURPOSE. THUS, ON THE ISSUE OF DEDUCTION U/S 80HHC WITH REFE RENCE TO DEPB, THE ITAT RESTORED THE ISSUE BACK TO THE FILE OF THE ASS ESSING OFFICER TO BE DECIDED IN VIEW OF THE DECISION OF ITAT, SPECIAL BE NCH IN THE CASE OF TOPMAN EXPORTS VS. ITO (CITED SUPRA) AFTER PROVIDIN G AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AGAINST THIS ORDER, TH E DEPARTMENT WENT IN APPEAL TO THE HON'BLE JURISDICTIONAL PUNJAB & HARYA NA HIGH COURT WHEREIN WHILE DECIDING THE ITA NO.864 OF 2010 VIDE ORDER DATED 14.03.2011 HON'BLE HIGH COURT HAS DECIDED THE APPEA L OF THE REVENUE BY HOLDING AS UNDER :- 1. THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE U NDER SECTION 260-A OF THE INCOME TAX ACT, 1961 (FOR SHOR T, 'THE ACT') AGAINST THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI DATED 16.2.2010 IN I.T.A. NO.4760/DEL/2009 PROPOSING FOLLOWING SUBSTANTIAL QUESTIONS OF LAW:- 'I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. ITAT WAS JUSTIFIED IN ALLOWING DEDUCTION U/S 80HHC ON THE FACE VALUE OF DEPB IN THE CASE WHERE TURNOVER EXCEEDS RS.10 CRORES IN VIE W OF PROVISO (II), (III) AND (IV) INSERTED BY THE TAX ATION LAW (AMENDMENT) ACT, 2005 WITH RETROSPECTIVE EFFECT FROM 01.04.1998? ITA NO.4760/DEL/2009 CO NO.30/DEL/2010 4 II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON'BLE ITAT WAS JUSTIFIED IN ALLOWING DEDUCTION U/S 80 HHC IN RESPECT OF ENTIRE DEPB AMOUNT BY INCORPORATING THE SAME IN THE COMPUTATION OF BUSINESS PROFIT U/S 28(IIIB)? III) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. ITAT WAS JUSTIFIED IN PLACING RELIANC E UPON THE DECISION OF INCOME-TAX APPELLATE TRIBUNAL, SPECIAL BENCH, MUMBAI IN THE CASE OF M/S TOPMAN EXPORTS VS. ITO (209)-TOIL-531-ITAT DATED 11.08.2009 DESPITE THE FACT THAT THE DECISION OF TH E MUMBAI ITAT SPECIAL BENCH IN THE CASE OF TOPMAN EXPORT, SUPRA HAS BEEN REVERSED BY THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. KALPATARU COLOURS AND CHEMICALS-TIOL-482-HC MUM.?' 2. LEARNED COUNSEL FOR THE APPELLANT STATES THAT T HE MATTER IS COVERED IN FAVOUR OF THE REVENUE BY ORDER S OF THIS COURT DATED 16.8.2010 IN I.T.A. NO.301 OF 2010 CIT V. M/S VICTOR FORGINGS AND I.T.A. NO.299 OF 2010 CIT V. F. C. SONDHI, WHEREIN AFTER NOTICING THE JUDGMENT OF THE BOMBAY HIGH COURT IN CIT V. KALPATARU COLOURS & CHEMICALS 2010 (42) DTR 193, THE MATTER WAS REMANDED TO THE TRIBUN AL FOR FRESH DECISION IN ACCORDANCE WITH LAW. 3. SINCE WE FIND THAT THE MATTER IS COVERED BY EAR LIER ORDERS OF THIS COURT, WE DISPOSE OF THIS APPEAL IN SAME TERMS. FOR THIS PURPOSE, WE HAVE NOT CONSIDERED IT NECESSA RY TO ISSUE NOTICE TO THE RESPONDENT, BUT WE GIVE LIBERTY TO THE RESPONDENT TO MOVE THIS COURT IF THEY HAVE ANY GRIE VANCE AGAINST THIS ORDER. FOR GIVING THE EFFECT OF THE HON'BLE HIGH COURT DEC ISION, THE CASE WAS FIXED FOR HEARING TODAY WHEN THE LD. DR SUBMITTED T HAT THIS ISSUE HAS BEEN DECIDED BY HON'BLE SUPREME COURT IN THE CASE OF LIB ERTY INDIA VS. CIT ITA NO.4760/DEL/2009 CO NO.30/DEL/2010 5 REPORTED IN 317 ITR 218 AND HE PLEADED THAT THE MAT TER MAY BE RESTORED BACK TO THE ASSESSING OFFICER TO BE DECIDED AS PER LAW. 2. WE HAVE GONE THROUGH THE EARLIER ORDER OF ITAT A ND THE ORDER OF THE HON'BLE JURISDICTIONAL HIGH COURT. ACCORDINGLY, WE RESTORE THE ISSUE RAISED IN THE APPEAL OF REVENUE TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AS PER LAW AND IN EARLIER ORDER OF ITAT, TH E ITAT HAS ALSO RESTORED THE ISSUE RAISED IN THE CROSS OBJECTION TO THE ASSESSING OFFICER, THEREFORE, THIS CROSS OBJECTION ALSO STANDS TO BE A LLOWED FOR STATISTICAL PURPOSES. 3. IN THE RESULT, THE APPEAL AS WELL AS THE CROSS O BJECTION ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 9 TH DAY OF OCTOBER, 2013. SD/- SD/- (U.B.S BEDI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 9 TH DAY OF OCTOBER, 2013 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), KARNAL 5.CIT(ITAT), NEW DELHI. AR/ITAT NEW DELHI ITA NO.4760/DEL/2009 CO NO.30/DEL/2010 6