M/S. SETRON EXPORTS, MUMBAI V. THE ACIT CIR 14(1), MUMBAI

ITA 5152/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1138 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 16-06-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 27-07-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: I P RATHI
• Keywords: Business income; Set aside
• Section: 80HHC; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J BEFORE SHRI N.V. VASUDEVAN (JM) & SHRI B. RAMAKOTAI AH (AM) I.T.A.NO. 5152/MUM/2007 (ASSESSMENT YEAR : 2002-0 3) SETRON EXPORTS 599, JSS ROAD 4 TH FLOOR, KAPADIA CHAMBERS CHIRA BAZAR MUMBAI-400 002 VS. ACIT CIRCLE 14(1) EARNEST HOUSE MUMBAI-400 021. APPELLANT RESPONDENT PAN/GIR NO. : AABFS1150Q ASSESSEE BY : SHRI I.P. RATHI DEPARTMENT BY : SHRI ABANI KANTA NAYAK ORDER PER N.V. VASUDEVAN, JM :- THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 17.5.2007 OF LEARNED CIT(A)-XIV, MUMBAI RELATING TO A.Y. 2002-03. 2. GROUND NO. 1 WAS NOT PRESSED, THE SAME IS DISMIS SED AS NOT PRESSED. 3. GROUND NO. 2&3 RAISED BY THE ASSESSEE READ AS FO LLOWS :- 2) THAT THE LEARNED CIT(A) HAS FURTHER ERRED IN CON SIDERING THE TOTAL SALE PROCEEDS OF DEPB RS. 12,40,641/- AS ANY PROFIT ON TRANSFER OF DEPB. U/S. 28(IIID), AS AGAINST A CTUAL PROFIT ON TRANSFER OF DEPB RS. 85,450/- ON SALE OF DEPB ENTITLEMENTS OF RS. 11,55,191/-. 3) WITHOUT PREJUDICE TO THE ABOVE, IF THE SUM OF RS . 12,40,641/- BEING DETERMINED AS COVERED U/S. 28(III D), SHOULD BE REDUCED FROM THE TAXABLE INCOME OF THE AP PELLANT AS THE SUM COVERED U/S. 28(IIID) THOUGH CLASSIFIED AS DEEMED BUSINESS INCOME, BUT THE SAME HAS NOT BEEN INCLUDED IN THE DEFINITION OF INCOME U/S. 2(24). SETRON EXPORTS 2 4. THE ISSUE RAISED IN THE ABOVE GROUNDS IS WITH RE GARD TO COMPUTATION OF DEDUCTION U/S.80HHC VIS--VIS DEPB. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. BOTH THE SI DES ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES OF THIS APPEAL ARE MUTATIS MUTANDIS SIMILAR TO THOSE DECIDED BY THE SPECIAL BE NCH OF THE TRIBUNAL IN THE CASE OF TOPMAN EXPORTS, 318 ITR (AT) 87 (MUM )(SB). THE SPECIAL BENCH VIDE ITS ORDER DATED 11.08.2009 HAS RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERING THE FACE V ALUE OF DEPB AS COVERED UNDER SECTION 28 (IIIB) AND THE PROFIT ON TRANSFER OF DEPB I.E., EXCESS OF SALE PRICE OVER THE FACE VALUE OF DEPB AS FALLING U NDER SECTION 28 (IIID). IT HAS FURTHER BEEN HELD THAT THERE IS NO SCOPE FOR AL LOWING SEPARATE DEDUCTION FOR INDIVIDUAL EXPENSES CONNECTED WITH TH E SALE OF DEPB DUE TO THE SCHEME OF SECTION 80HHC. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER ON THIS ISSUE AND DIRECT THE ASSESSING OFFICE R TO RECOMPUTE THE DEDUCTION UNDER SECTION 80HHC IN ACCORDANCE WITH TH E VIEW TAKEN BY THE SPECIAL BENCH IN THE AFORE NOTED CASE. NEEDLE SS TO SAY THE ASSESSEE WILL BE ALLOWED A REASONABLE OPPORTUNITY OF BEING H EARD BY THE AO IN THE FRESH PROCEEDINGS. 4. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER HAS BEEN PRONOUNCED ON 9 TH DAY OF JULY, 2010. SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER SD/- (N.V. VASUDEVAN) JUDICIAL MEMBER DATED : 9 TH JULY, 2010 COPY TO : 1. THE ASSESSEE 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT, CONCERNED. 5. THE DR CONCERNED, MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI PS