ACIT, Cochin V. Anchor Treads P.Ltd, Kottayam

ITA 479/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64739 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 10-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VENI RAJ
• Section: 80HHC; 80IB

Judgement Text

1 ITA NO.479/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.T.A NO. 479/COCH/2010 (ASSESSMENT YEAR 2006-07) THE A.C.I.T., CIR.1 VS M/S ANCHOR TREADS (P) LT D KOTTAYAM P JOHN ZACHARIAH BLDGS KOTTAYAM PAN : AABCA7865K (APPELLANT) (RESPONDENT) APPELLANT BY : MS VENI RAJ RESPONDENT BY : SHRI MATHEW JOSEPH DATE OF HEARING : 06-08-2012 DATE OF PRONOUNCEMENT : 10-08-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-IV, KOCHI DATED 19-05-2010 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DEDUC TION U/S 80IB OF THE ACT. 2. MS. VENI RAJ, THE LD.DR SUBMITTED THAT THE ASSES SEE CLAIMED DEDUCTION U/S 80IB IN RESPECT OF INCOME RECEIVED FROM MOULDING. THE COMMISSIONER OF INCOME- TAX(A) BY PLACING RELIANCE ON THE ORDER OF THIS TRI BUNAL FOR THE ASSESSMENT YEAR 2004-05 ALLOWED THE CLAIM OF THE ASSESSEE. ACCORDIN G TO THE LD.DR MOULDING 2 ITA NO.479/COCH/2010 CHARGES ARE SIMILAR TO PROCESSING CHARGES. THE PRO CESSING CHARGES WAS CONSIDERED BY THE APEX COURT IN THE CASE OF COMMISS IONER OF INCOME-TAX VS K RAVINDRAN NAIR 295 ITR 228 (SC) AND IT WAS HELD THA T PROCESSING CHARGES ARE NOT ELIGIBLE FOR DEDUCTION U/S 80HHC OF THE ACT. THERE FORE, ACCORDING TO THE LD.DR, THE ORDER OF THIS TRIBUNAL FOR THE ASSESSMENT YEAR 2004-05 MAY NOT BE APPLICABLE FOR MOULDING CHARGES. 3. ON THE CONTRARY, SHRI MATHEW JOSEPH, THE LD.REPR ESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 IN ITA NO.197/COCH/2007 DATED 21-04-2009 CONSIDERED THIS ISSUE AND FOUND THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTI ON U/S 80-IB IN RESPECT OF MOULDING CHARGES. THIS ORDER OF THE TRIBUNAL IS AL SO FOLLOWED FOR THE ASSESSMENT YEAR 2005-06 IN ITA NO.180/COCH/2009 ORDER DATED 08-0 4-2011. REFERRING TO THE JUDGMENT OF THE APEX COURT IN THE CASE OF K RAVINDRA N NAIR (SUPRA) THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT T HE ISSUE BEFORE THE APEX COURT WAS IN RESPECT OF DEDUCTION U/ 80HHC OF THE ACT. T HEREFORE, THE JUDGMENT OF THE APEX COURT IN THE CASE OF K RAVINDRAN NAIR (SUPRA) MAY NOT BE APPLICABLE TO THE FACTS OF THE CASE. 4. WE HAVE CONSIDERED THE SUBMISSIONS ON EITHER SID E AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THIS TRIBUNAL, AFTER CONSIDERING THE FACTS OF THE CASE FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 FOUND T HAT THE MOULDING CHARGES ARE ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT. TH E ONLY CONTENTION OF THE LD.DR IS THAT IN VIEW OF THE JUDGMENT OF THE APEX COURT IN T HE CASE OF K RAVINDRAN NAIR (SUPRA) THE ORDERS OF THIS TRIBUNAL FOR THE ASSESS MENT YEARS 2004-05 AND 2005-06 MAY NOT BE APPLICABLE. 3 ITA NO.479/COCH/2010 5. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF T HE APEX COURT IN THE CASE OF K RAVINDRAN NAIR (SUPRA). THE APEX COURT AF TER CONSIDERING CLAUSE (BAA) OF THE EXPLANATION TO SECTION 80HHC FOUND THAT PROCESS ING CHARGES WHICH ARE PART OF THE GROSS TOTAL INCOME WAS AN INDEPENDENT INCOME LIKE RENT, COMMISSION, BROKERAGE, ETC. AND THEREFORE, 90% OF THE SAID SUM H AS TO BE REDUCED FROM THE GROSS TOTAL INCOME TO ARRIVE AT THE BUSINESS PROFIT . IN THE CASE ON OUR HAND IT IS NOT THE DEDUCTION U/S 80HHC. THERE IS NO PROVISION IN SECTION 80IB AS IT IS IN CLAUSE (BAA) OF EXPLANATION TO SECTION 80HHC OF THE ACT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE JUDGMENT OF T HE APEX COURT IN THE CASE OF K RAVINDRAN NAIR (SUPRA) MAY NOT BE APPLICABLE TO THE FACTS OF THE CASE. SINCE TWO CO-ORDINATE BENCHES OF THIS TRIBUNAL FOR THE ASSESSM ENT YEARS 2004-05 AND 2005- 06 HAVE CONSIDERED THIS ISSUE IN THE ASSESSEES OWN CASE AND FOUND THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT, WE ARE OF THE CONSIDERED OPINION THAT THE DECISION OF THE CO-ORDINATE BENCH O F THIS TRIBUNAL FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 IS EQUALLY APPLI CABLE FOR THE YEAR UNDER CONSIDERATION ALSO. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY FOLLOWED THE ORDERS OF THIS TRIBUNAL FOR THE ASSESS MENT YEAR 2004-05. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF THE LOWER AUTHORITY. THE ORDER OF COMMISSIONER OF INCOME-TAX(A) IS CONFIRMED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF AUGUST, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 10 TH AUGUST, 2012 PK/- 4 ITA NO.479/COCH/2010 `COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH