PRANESH S. VORA, MUMBAI V. ITO WD 18(1)(2), MUMBAI

ITA 5189/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3722 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 19-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M SALMAN KHAN
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.5189/M/2013 ASSESSMENT YEAR: 2005-06 M/S. PRANESH S. VORA, PROP. GALLOP IMPEX, 85/95A, EDENWALA BLDG., J.B. MARG, ELPHINSTON ROAD, MUMBAI 400 025 PAN: ABQPV 7884A VS. ITO WARD 18(1)(2), PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400012 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI M. SALMAN KHAN, D.R. DATE OF HEARING : 07.03.2016 DATE OF PRONOUNCEMENT : 11.03.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 06.05.2013 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2005-06. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.17,46 ,662/- BEING DUTY DRAW BACK AS EXPORT INCENTIVE CLAIMED U/S. 80IB(4). II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) ERRED IN RELYING THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF LIBERTY INDIA REPORTED IN 317 ITR PG. 218 IGNORING THE JUDG MENT OF THE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS REPORTED IN 342 ITR PG. 49. III) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D OR DELETE ANY GROUND(S) OF APPEAL EITHER BEFORE OR DURING THE COURSE OF HEARIN G OF THE APPEAL. 3. THE CASE WAS CALLED SEVERAL TIMES BUT NONE HAS A PPEARED ON BEHALF OF THE ASSESSEE. IT IS OBSERVED FROM THE ORDER SHEET OF T HIS FILE THAT EARLIER NOTICE WAS ITA NO.5189/M/2013 M/S. PRANESH S. VORA 2 SERVED UPON THE ASSESSEE TO APPEAR ON 17.02.15 VIDE ORDER DATED 18.11.14, HOWEVER, 17.02.15 WAS DECLARED CLOSED HOLIDAY ON AC COUNT OF MAHASHIVRATRI AND THE CASE WAS ADJOURNED TO 25.05.15. ON 25.05.1 5, NO ONE APPEARED ON BEHALF OF THE ASSESSEE AND A RPAD NOTICE WAS SERVED ON THE ASSESSEE TO APPEAR ON 18.08.15. AGAIN ON 18.08.15 NONE APPEARED ON BE HALF OF THE ASSESSEE AND A NOTICE BY RPAD WAS ORDERED TO BE SERVED AGAIN FOR 0 7.12.15. AGAIN NO ONE APPEARED ON BEHALF OF THE ASSESSEE AND ANOTHER RPAD NOTICE WAS ISSUED VIDE ORDER DATED 17.12.15 FOR HEARING FOR TODAY I.E. 07. 03.16. BUT TODAY AGAIN NO ONE HAS APPEARED ON BEHALF OF THE ASSESSEE. HENCE, THE ABOVE NARRATED FACTS REVEAL THAT THE ASSESSEE IS NOT INTERESTED IN PROSE CUTING HIS APPEAL. HENCE, WE PROCEED TO DECIDE THE APPEAL ON MERITS AFTER HEARIN G THE LD. D.R. 4. THE LD. D.R. HAS SUBMITTED THAT THE ISSUE INVOLV ED IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF M/S. LIBERTY INDIA VS. CIT CIVIL APPEAL NO.5271 O F 07 AND OTHERS VIDE ORDER DATED 31.08.09. 5. WE HAVE PERUSED THE ORDER OF THE HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA (SUPRA). WE FIND ON THE IDENTICAL ISSUE RELATING TO INCENTIVES RECEIVED BY WAY OF DUTY DRAW BACK/DEPB, WHETHER ELI GIBLE FOR DEDUCTION UNDER SECTION 80IB; THE HONBLE SUPREME COURT HAS H ELD THAT DUTY DRAW BACK/DEPB BENEFITS, REBATES ETC. CANNOT BE CREDITED AGAINST THE COST OF MANUFACTURE OF GOODS DEBITED IN THE P&L ACCOUNT FOR THE PURPOSE OF SECTION 80IA/80IB. SUCH REMISSIONS WOULD CONSTITUTE INDEPE NDENT SOURCE OF INCOME BEYOND THE FIRST DEGREE NEXUS BETWEEN PROFIT AND TH E INDUSTRIAL UNDERTAKING. THE HONBLE SUPREME COURT HAS OBSERVED THAT DEPB/DU TY DRAW BACK ARE INCENTIVES WHICH FLOW FROM THE SCHEMES FRAMED BY CE NTRAL GOVERNMENT OR FROM SECTION 75 OF CUSTOMS ACT, 1962, HENCE, SUCH I NCENTIVES/PROFITS ARE NOT PROFITS DERIVED FROM THE ELIGIBLE BUSINESS UNDER SE CTION 80IB. THEY BELONG TO THE CATEGORY OF ANCILLARY PROFIT OF SUCH UNDERTAKIN GS AND AS SUCH DO NOT FORM PART OF THE NET PROFITS OF ELIGIBLE INDUSTRIAL UNDE RTAKING FOR THE PURPOSE OF ITA NO.5189/M/2013 M/S. PRANESH S. VORA 3 SECTION 80IA/80IB. THE ISSUE BEFORE US IS DIRECTLY COVERED BY THE ABOVE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F LIBERTY INDIA (SUPRA). THEREFORE, THERE IS NO MERIT IN THE APPEAL OF THE A SSESSEE AND THE SAME IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.03.2016. SD/- SD/- (RAJESH KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 11.03.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.