M/s. TECHNOCRAFT INDUSTRIES (INDIA) LTD., MUMBAI V. DCIT Rg. - 8(3), MUMBAI

ITA 4792/MUM/2006

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9424 (ITAT-MUMBAI)
• Duration Of Justice: 8 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-08-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 01-09-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDER
• Assessee Lawyers: SHRI
• Section: 80HHC

Judgement Text

, , , , , ,, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI . . , ! '# , $ BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.5689/MUM/2006 ASSESSMENT YEAR: 2003-04 ACIT/DCIT , RANGE-8(3), ROOM NO.204, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. M/S TECHNOCRAFT INDUSTRIES (I) LTD. A-25, MIDC, MAROL INDUSTRIAL AREA, ROAD NO.3, ANDHERI(E) MUMBAI - 400093 ( '# / REVENUE) ( ()* /ASSESSEE) P.A. NO.AAACT2724P ITA NO.4792/MUM/2006 ASSESSMENT YEAR: 2003-04 M/S TECHNOCRAFT INDUSTRIES (I) LTD. A-25, MIDC, MAROL INDUSTRIAL AREA,ROAD NO.3, ANDHERI(E) MUMBAI-400093 / VS. ACIT/DCIT, RANGE-8(3), ROOM NO.204, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ( ()* /ASSESSEE) ( '# / REVENUE) P.A. NO.AAACT2724P '# + , + , + , + , / REVENUE BY SMT. PARMINDER, CIT - DR ()* + , + , + , + , / // / ASSESSEE BY): SHRI PANKAJ TOPRANI + *-! / / / / DATE OF HEARING : 20/01/2015 ./0 + *-! / DATE OF PRONOUNCEMENT : 20/01/2015 '1 '1 '1 '1 + *-! / DATE OF ORDER : 02/02/2015 M/S TECHNOCRAFT INDUSTRIES (I) LTD. 2 '1 '1 '1 '1 / / / / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) : THE REVENUE AS WELL AS THE ASSESSEE ARE AGGRIEVED B Y THE IMPUGNED ORDER DATED 20/08/2006 OF THE LD. FIRST AP PELLATE AUTHORITY, MUMBAI . 2. AT THE TIME OF HEARING, THE LD. CIT-DR, SMT. PARMINDER, DEFENDED THE CONCLUSION ARRIVED AT IN TH E ASSESSMENT ORDER. ON THE OTHER HAND, THE LD. COUNS EL FOR THE ASSESSEE, SHRI PANKAJ TOPRANI, ARGUED/AGITA TED ONLY GROUND I.E. GROUND NO.10 WHICH READS AS UNDER: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER NOT TO EXCLUDE THE SCRAP SALE AMOUNT OF RS.3,61,33,388/- FROM THE PROFITS OF BUSINESS BUT TO INCLUDE THE SAME IN THE TOTAL TURNOVER WHILE CALCULATING DEDUCTION U/S 80HHC OF THE ACT WITHOUT APPRECIATING THE FACTS OF THE CASE. 2.1. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THA T THE IMPUGNED ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION FROM HONBLE APEX COURT IN CIT VS PUNJ AB STAINLESS STEEL INDUSTRIES (2014) 103 DTR (SC) 49. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT ITA NO.5689 & 4792/MUM/2006 WERE DISPOSED OFF BY M/S TECHNOCRAFT INDUSTRIES (I) LTD. 3 THE TRIBUNAL VIDE ORDER DATED 29 TH OCTOBER 2010 (COPY AVAILABLE ON RECORD). THE ASSESSEE FILED MISCELLAN EOUS APPLICATION (MA NO.326/MUM/2013) (ARISING OUT OF IT A NO.5689/MUM/2006). IT IS ALSO NOTED THAT IN THE APP EAL OF THE ASSESSEE AS PER GROUND NO.4(D), THE INCLUSIO N OF SCRAP SALES IN THE TOTAL TURNOVER WHILE COMPUTING DEDUCTION U/S 80HHC WHICH WAS DECIDED BY THE TRIBUNAL AGAINST THE ASSESSEE BY FOLLOWING THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2001-02 (ITA NO.2477/MUM /2004), CONFIRMING THE DIRECTION BY THE CIT(A) IN INCLUDING THE SCRAP SALE IN TOTAL TURNOVE R (VIDE PARAS 23 TO 25) AND VIDE GROUND NO.10, THE REVENUE HAS ALSO IMPUGNED THE SIMULTANEOUS DIRECTION BY THE CIT(A) TO EXCLUDE THE SCRAP SALES FROM THE PROFIT O F BUSINESS HAS BEEN CHALLENGED. HOWEVER, THE BENCH WHILE DISPOSING OFF THE MISCELLANEOUS APPLICATION, VIDE ORDER DATED 12/02/2014, RECTIFIED THE ORDER WITH RESPECT TO GROUNDS NO. 4(D) (APPEAL OF THE ASSESSEE ) AND GROUND NO.10 (APPEAL OF THE REVENUE) IN RESPECT OF TREATMENT OF SCRAP SALES FOR THE PURPOSE OF COMPUTA TION OF DEDUCTION U/S 80HHC OF THE ACT. THE BENCH DIRECT ED TO DECIDE BOTH THESE GROUNDS AFRESH AFTER HEARING T HE PARTIES. THUS, GROUND NO.4(D) (APPEAL OF THE ASSESS EE) IS ALSO REPRODUCED HEREUNDER:- THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING/GIVING DIRECTION TO INCLUDE SCRAP SALE AMOUNT OF RS.3,61,33,338/- IN THE TOTAL TURNOVER WITHOUT APPRECIATING THE FACT THAT THE APPELLANT HAD REDUCED THE SCRAP SALE AMOUNT FROM THE COST OF RAW MATERIAL CONSUMED SINCE M/S TECHNOCRAFT INDUSTRIES (I) LTD. 4 SCRAP IS NOT A BY PRODUCT IGNORING THE DECISION IN FAVOUR OF THE ASSESSEE FOR ASSESSMENT YEAR 1993- 94 ONWARDS TILL ASSESSMENT YEAR 1998-99. 2.3. IN VIEW OF THE ABOVE, WE ADJUDICATE THE GROUND S OF BOTH APPEALS WITH RESPECT TO EXCLUSION/INCLUSION OF SCRAP SALE FOR CALCULATION OF DEDUCTION U/S 80HHC O F THE ACT. WITHOUT GOING INTO MUCH DELIBERATION, WE F IND THAT THE ISSUE HAS BEEN SETTLED BY THE HONBLE APEX COURT, VIDE ORDER DATED 5 TH MAY, 2014, IN THE CASE OF CIT VS PUNJAB STAINLESS STEEL INDUSTRIES (SUPRA). THE HONBLE COURT HELD THAT THE WORD TURNOVER WOULD MEAN ONLY THE AMOUNT OF SALE PROCEEDS RECEIVED IN RESPECT OF GOODS IN WHICH AN ASSESSEE IS DEALING AN D THEREOF, THE PROCEEDS GENERATED FROM THE SALE OF SC RAP COULD NOT BE INCLUDED IN THE TOTAL TURNOVER OF MANUFACTURER FOR THE PURPOSE OF COMPUTING DEDUCTION U/S 80HHC OF THE ACT. THE HONBLE COURT WHILE COMI NG TO THIS CONCLUSION ALSO CONSIDERED THE DECISION IN CIT VS K. RAVINDRANATHAN NAIR (2007) 213 CTR (SC) 227 AND AFFIRMED THE DECISION OF HONBLE HIGH COURT DATED 19/01/2007 IN THE CASE OF PUNJAB STAINLESS STEEL INDUSTRIES (IT APPEAL NO.520/2006). RESPECTFULLY FOLLOWING THE DECISION FROM HONBLE APEX COURT BOTH THESE GROUNDS OF ASSESSEE AS WELL AS OF REVENUE ARE DISPOSED OFF IN TERMS OF THE AFORESAID DECISION. T HE ASSESSING OFFICER IS DIRECTED TO FOLLOW THE AFORESA ID DECISION FROM HONBLE APEX COURT. FINALLY, BOTH THESE APPEALS/IMPUGNED GROUNDS ARE DISPOSED OFF IN TERMS INDICATED HEREINABOVE. M/S TECHNOCRAFT INDUSTRIES (I) LTD. 5 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 20/01/2015. SD/- (N.K.BILLAIYA) SD/- (JOGINDER SINGH) ! '# ! '# ! '# ! '# / ACCOUNTANT MEMBER '# '# '# '# / JUDICIAL MEMBER MUMBAI; 2' DATED : 02/02/201 5 F{X~{T? P.S/. .. '1 + 3* 40* '1 + 3* 40* '1 + 3* 40* '1 + 3* 40*/ COPY OF THE ORDER FORWARDED TO : 1. 56 / THE APPELLANT 2. 3756 / THE RESPONDENT. 3. 8 ( ) / THE CIT, MUMBAI. 4. 8 / CIT(A)- , MUMBAI 5. :; 3* , , / DR, ITAT, MUMBAI 6. ;<( = / GUARD FILE. '1 '1 '1 '1 / BY ORDER, 7* 3* //TRUE COPY// > >> >/ // /? ' ? ' ? 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