M/s. Mehra Brothers., Kanpur V. Income Tax Officer-2(2), Kanpur

ITA 508/LKW/2012

• Counselvise Citation: 50823714 RSA 2012
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 24-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 10B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.508/LKW/2012 ASSESSMENT YEAR:2008 - 09 INCOME TAX OFFICER - 2(2), KANPUR. VS M/S MEHRA BROTHERS, 117/H - I/249 PANDU NAGAR, KANPUR. PAN:AAEFM9151E (RESPONDENT) (APPELLANT) SHRI ROHIT BHALLA, C.A. APPELLANT BY SHRI AMIT NIGAM, D. R. RESPONDENT BY 16/09/2014 DATE OF HEARING 28 /11/2014 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, KANPUR DATED 22/06/2012 FOR THE ASSESSMENT YEAR 2008 - 2009. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. BECAUSE LD. LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE IN DETERMINING THE TOTAL INCOME OF THE APPELLANT AT RS.36,63,379/ - AS AGAINST THE RETURNED INCOME OF RS.3,334/ - BY ARBITRARILY NOT ALLOWING THE DEDUCTION U/S 10B OF THE INCOME TAX ACT, AS CLAIMED BY THE APPELLANT AND MAKING ITS COMPUTATION AT RS. 587, - 6,603/ - AS AGAINST T HE ALLOWABLE CLAIM OF RS.623,69,979/ - . 2. THA T T HE L D. LOWER AUTHORITIES HAVE ERRED IN LAW & O N F AC T S OF THE CASE IN EXCLUDING EXPENSES INCURRED ON FREIGHT, TELECOMMUNICATION, CHARGES, INSURANCE ETC. INCURRED N OT IN CONVERTIBLE FOREIGN EXCHANGE FOR THE PURPOSE OF WORKING 2 OUT 'EXPORT T URNOVER & HENCE ORDER O F THE LD LOWER AUTHORITIES IS UNTENABLE IN LAW. 3. THAT THE L D. LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN DEDUCTI NG THE AMOUNT OF RS.107, 55,826/ - CONSISTING OF RS.91,89,13 8 / - FOR FREIGHT, RS.1,07 ,548/ - F OR INSURANCE AND RS.1 4,59,140/ - ON ACCOUNT O F FOREIGN EXPENSES FROM THE EXPORT TURNOVER AND COMPUTING THE EXPORT TURNOVER AT RS.17,23,65,057/ - AS THE UNDISPUTED FACT THAT THE APPELLANT ASSESSE E IS A HUNDRED PERCENT EXPORT ORIENTED UNDERTAKING AND I F THESE EXPENSES ARE EXCLUDED FOR THE PURPOSE OF 'EXP ORT TURNOVER' THEN ON THE SAME ASSUMPTION, REASON AND ANALOGY, IT SHOULD ALSO BE EXCLUDED FROM 'TOTAL TURNOVER' ( RS.18,31,20,883/ - ). REFERENCE CAN HE TAKEN IN THE CASE OF BEEKAY ENGG. & CASTINGS L T D. VS. JT. CIT ( 2005) 146 TAXMAN 9 (DELHI) MAG.), CIT VS. HM EXPORTS LTD. [2005] 144 TAXMAN 557 AND PATNI TELECOM (P) LTD. VS. INCOME TAX OFFICER [2008] 22 SOT 38 (HYD.). 3. LEARNED A.R. OF THE ASSESSEE PLACED RELIANCE ON A JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS. TATA ELXSI LT D. [2012] 17 TAXMANN.COM 100 (KAR). HE ALSO SUBMITTED THAT THE COPY OF THE ORDER IS AVAILABLE FROM PAGES 66 TO 75 OF THE PAPER BOOK. IT WAS ALSO SUBMITTED THAT IN THIS CASE , IT WAS HELD THAT IF EXPORT TURNOVER IN NUMERATOR IS TO BE ARRIVED AT AFTER EXCLU DING CERTAIN EXPENSES, SAID EXPENSES SHOULD ALSO BE EXCLUDED IN COMPUTING EXPORT TURNOVER AS A COMPONENT OF TOTAL TURNOVER IN DENOMINATOR. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT WHILE COMPUTING THE DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 10B OF THE ACT, THE ASSESSING OFFICER HAS REDUCED AN AMOUNT OF RS.1,07,55,826/ - FROM EXPORT TURNOVER BUT NO SUCH REDUCTION WAS MADE FROM TO TAL TURNOVER. AS PER THIS JUDGMENT OF HON'BLE KARNATAKA HIGH COURT CITED BY LEARNED A.R. OF THE ASSESSEE, IT WAS HELD BY HON'BLE HIGH COURT THAT IF EXPORT TURNOVER IS REDUCED 3 ON ACCOUNT OF EXCLUSION OF CERTAIN EXPENSES THEN TOTAL TURNOVER SHOULD ALSO BE R EDUCED BECAUSE TOTAL TURNOVER IS NOTHING BUT SUM TOTAL OF EXPORT TURNOVER + DOMESTIC TURNOVER. ACCORDINGLY, BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BLE KARNATAKA HIGH COURT, WE DIRECT THE ASSESSING OFFICER TO RECALCULATE THE AMOUNT OF DEDUCTION ALL OWABLE TO THE ASSESSEE U/S 10B OF THE ACT BY ADJUSTING THE TOTAL TURNOVER ALSO AS HAS BEEN HELD BY HON'BLE KARNATAKA HIGH COURT IN THE CASE CITED BEFORE US. NEEDLESS TO SAY, THE ASSESSING OFFICER SHOULD PASS NECESSARY ORDER AS PER LAW AFTER PROVIDING REAS ONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 /11/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR