VALIANT GLASS WORKS P.LTD, MUMBAI V. ITO 4(3)(3), MUMBAI

ITA 521/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75266 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 27-08-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 24-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJIT C SHAH; SWETHA SAVLA
• Keywords: Rectification of order; Opportunity of being heard

Judgement Text

F IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI . . , . , BEFORE SHRI I.P. BANSAL, JM AND SHRI KARUNAKARA RAO, AM ./I.T.A. NO. 521/M/2012 ( / ASSESSMENT YEAR: 2002 - 2003 ) VALIANT GLASS WORKS P. LTD., 384, M. DABHOLKAR WADI, 5 TH FLOOR, KALBADEVI ROAD, MUMBAI 400 002. / VS. ITO - 4(3)(3), 6 TH FLOOR, 637, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AAACV 1224 E ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI AJIT C SHAH AND SWETHA SAVLA / RESPONDENT BY : SHRI RAVI PRAKASH, DR / DATE OF HEARING : 2.1.2014 / DATE OF PRONOUNCEMENT : 8. 1.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 24.01.2012 IS AGAINST THE ORDER OF THE CIT (A) - 9, MUMBAI DATED 8.11.2011 FOR THE ASSESSMENT YEAR 2002 - 2003. 2. AT THE OUTSET, SHRI ADJIT C SHAH, LD COUNSEL FOR THE ASSESSEE REFERRED TO THE GROUND NO.1.1 AND MENTIONED THAT THE SAME IS NOT PRESSED. AFTER HEARING THE LD DR, WE DISMISS THE SAID GROUND NO.1.1 AS NOT PRESSED. 3. THE ONLY GROUND TO BE ADJUDICATED BY US IS GROUND NO.1.2 AND THE SAME READS AS UNDER: 1.2. UPHOLDING THE STAND OF THE AO IN THE RECTIFIED ORDER THAT 90% OF THE DEPB BENEFITS OF RS. 2,90,47,989/ - HAD TO BE REDUCED FROM THE BUSINESS PROFITS FOR COMPUTING THE DEDUCTION U/S 80 - HHC OF THE INCOME TAX ACT, 1961. 2 4. REFERRING TO THE ABOVE MENTIONED GROUND, LD COUNSEL BROUGHT OUR ATTENTION TO THE PARA 4.4 OF THE IMPUGNED ORDER AND STATED THAT THE CIT (A ) ERRED IN FOLLOWING THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF KALPATARU COLOURS AND CHEMICALS REPORTED IN 192 TAXMAN 435 (BOM). FURTHER, LD COUNSEL MENTIONED THAT THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF M/S. TOPMAN EXP ORTS VS. CIT [2012] 342 ITR 49 (SC) , WHEREIN APEX COURT HAS SET ASIDE THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT JUDGMENT IN THE CASE OF CIT VS. KALPATARU COLOURS & CHEMICALS (SUPRA). FOLLOWING THE SAID JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS (SUPRA), THE DECISION OF THE CIT (A) IS REQUIRED TO REVISIT THE FILES OF THE AO FOR RECALCULATION OF THE ALLOWABLE DEDUCTION IN THE LIGHT OF THE SAID JUDGMENT AND ALSO IN THE CASE OF M/S. LIBERTY INDIA VS. CIT [2009] 317 ITR 218 (SC) , WHI CH IS RELEVANT FOR THE PROPOSITION THAT THE BENEFIT IN THE FORM OF DEPB LICENSES ARE NOT ENTITLED FOR DEDUCTION U/S 80 - IB OF THE ACT. 5. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED JUDGMENTS. ON HEARING BOTH THE PARTIES, WE ARE OF THE OPINION THAT THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF TOPMAN EXPORTS (SUPRA) WAS NOT AVAILABLE AT THE RELEVANT POINT OF TIME AS SUCH, THE JUDGMENT IN THE CASE OF KALPATARU COLOURS & CHEMICALS (SUPRA) WAS REVERSED BY THE CITED APEX COURT JUDGMENT. THEREFORE, WE ARE OF THE OPINION THAT THE ARGUMENTS OF THE LD COUNSEL SHOULD BE UPHELD. CONSIDERING THE SAME, WE SET ASIDE THE MATTER TO THE FILES OF THE AO TO ADJUDICATE THE ISSUE AFRESH. WE DIRECT THE AO TO EXAMINE THE ISSUE AND THE CALCULATIONS, IF ANY, TO BE FILED BY THE ASSESSEE DURING THE SET ASIDE PROCEEDINGS AFTER PROVIDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACC ORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRON OUNCED IN THE OPEN COURT ON 8 T H JANUARY, 2014. S D / - S D / - (I.P. BANSAL) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 0 8 /01/2014 3 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI